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Digital Marketing Book - Chapter Four.pptx
- 1. 1 4 Chapter Digital customers This chapter looks inside the online customer’s mind. We explore customers’ issues, worries, fears and phobias as well as other motivators for going online – and how marketers can respond to these behaviours. We also look at on-site behaviour, the online buying process and the many influencing variables. We finish with a look to the future, your future, and how to keep an eye on the digital customer.
- 2. 2 4.1 Introduction to digital customers • Online customers are changing They are visually driven, multi-tasking butterflies with shrinking attention spans • Customers have been abused by businesses Surveys reveal that we have gotten worse at marketing over the last ten years • Customers will not tolerate bad service They will gladly accept offers from the competition if disappointed • Customers have unlocked ’control’ The impact of social media • Think global but not local Social networks can ultimately destroy business models that are company-centric (Gartner, 2009)
- 3. 3 4.1 Introduction to digital customers Consumers value privacy and trust • Time • Privacy New currencies Ideal customers are worth more than you think Engaged customers = Customer engagement
- 4. 4 4.2 Motivations Why do customers venture online? 1. Socializing 2. Browsing and buying products 3. Entertainment B2B customers have emotional motivations too Driven by cost-savings, speed and selling Magic Marketing formula Smith (2016) 1. Identify why people buy and what are their aspirations, motivations and expectations 2. Reflect on those findings to give them what they want 3. Deliver a reasonable product or service 6Cs of customer motivation Chaffey (2004) 1. Content 2. Customization/ Mass customization 3. Community 4. Convenience 5. Choice 6. Cost reduction
- 5. 5 4.3 Expectations • Online customers have raised expectations. • An increasing number of customers prefer to access online information via mobile only. • Some customers abandon emails and only use Facebook Simplify the world for your customers 3 stages of managing customers’ expectations 1.Understanding expectations 2.Setting and communicating the service promise 3.Delivering the service promise
- 6. 6 4.4 Fears and phobias Follow these guidelines to achieve reassurance, gain trust and build loyalty: 1. Provide clear and effective privacy statements 2. Follow privacy and consumer protection guidelines in all local markets 3. Make security of data a priority 4. Present independent site certification 5. Emphasize the excellence of service quality in all communications 6. Use content on the site to reassure the customer 7. Leading-edge design
- 7. 7 4.5 Online information processing In addition to shrinking attention spans, information is shifting towards being presented visually. Hofacker’s 5 stages on information processing 1. Exposure 2. Attention 3. Comprehension and perception 4. Yielding and acceptance 5. Retention
- 8. 8 4.6 The online buying process • Search marketing has compressed the cycle – the buying process often starts with a generic search. • Supplier search is now also compressed by a few visits to comparison sites which often feature well in search engines. • Recommendations from other customers through user-generated content has a significant impact on conversion rates. • Brand has become more important at later decision stages since it provides trust.
- 9. 9 4.6 The online buying process
- 10. 10 4.6 The online buying process
- 11. 11 4.6 The online buying process 3 types of online retail shopping behaviour have been identified E-consultancy (2004) Tracker Knows exactly which product they wish to buy and uses an online shopping site to track it down and check its price, availability, delivery time, delivery charges or after-sales support. Explorer Doesn’t have a specific product in mind but knows what type of product they are looking for and probably has one or more product features they are looking for. Uses online shopping site to find a range of suitable products, compare them and decide which one to buy. The hunter needs more help, support, and guidance to reach a purchasing decision. Hunter Doesn’t have a particular type of product in mind. They may have a well- defined shopping objective, a less-resolved shopping objective or no shopping objective at all.
- 12. 12 4.7 Online relationships and loyalty The Ladder of Loyalty Considine and Murray (1981) Move customers up from suspects to prospects to customers to clients to advocates who are totally loyal and are happy to spread the word about our products and services. 5 ‘primary determinants of loyalty’ Reicheld and Schefter (2000) 1. Quality customer support 2. On-time delivery 3. Compelling product presentations 4. Convenient and reasonably priced shipping and handling 5. Clear trustworthy privacy policies Delight the customer with… 1. Extra service and added value 2. Personalization 3. Community creation 4. Integration 5. Incentivization
- 13. 13 4.8 Communities and social networks 8 useful questions to ask when considering how to create a community for customers: 1. What interests, needs or passions do many of your customers have in common? 2. What topics or concerns might your customers like to share with each other? 3. What information is likely to appeal to your customers’ friends or colleagues? 4. What other types of business in your area appeal to buyers of your products and services? 5. How can you create packages or offers based on combining offers from two or more affinity partners? 6. What pride, delivery, financing, or incentives can you afford to offer to friends whom your current customers recommend? 7. What types of incentives or rewards can you afford to provide for customers who recommend friends? Who make a purchase? 8. How can you best track purchases resulting from word-of-mouth recommendations from friends? We add 9. What similar communities or groups already exist on social media platforms? What information or discussion topics generate more interest?
- 14. 14 4.9 Customer profiles We need to know the proportion of customers who • Have access to which channel or channels • Are influenced by using which channel or channels • Purchase using which channel or channels Profiling B2C customers 1. Access to channel 2. Influenced online 3. Purchased online Profiling B2B customers • Size of company • Industry sector and products • Organization type • Division • Country and region Organization characteristics • Name • Role and responsibility for job title, function and number of staff managed • Role in buying decision • Department • Product interest • Demographics Customer variables
- 15. 15 4.9 Customer profiles Decision-Making Unit (DMU) Purchaser – the person who orders the goods or services Adviser – someone who is knowledgeable in the field Gatekeeper – a secretary, receptionist or assistant who wants to protect his or her boss from being besieged by marketing messages End user – sometimes called ‘the customer’ Starter – the instigator or initiator
- 16. 16 4.10 Researching the online customer Building personas and scenario-based designs to increase the usability and customer centricity of a web site. + Benefits • Foster customer centricity • Identify detailed information needs and steps required by customers • Test, prototype and devise web sites • Compare and test the strength, clarity of communication of proposition of different web sites • Link to specific marketing outcomes required by site owners Figure 4.8 Dulux Source: www.dulux.co.uk
- 17. 17 4.10 Researching the online customer PAGES is a simple acronym that helps to build a marketing communications decision-making unit (DMU) checklist: Purchaser The person who orders the goods or services Adviser Someone who is knowledgeable in the field Gatekeeper A secretary, receptionist or assistant who wants to protect his or her boss from being besieged by marketing messages. End User Sometimes called ’the customer’ Starter The instigator or initiator
- 18. 18 4.10 Researching the online customer Guidelines for developing a persona 1. Build personal attributes into personas • Demographics • Psychographics • Webographics 3. Different scenarios can be developed for each persona • Design targets • Stereotypes • 3 or 4 usually suffice to improve general usability, but more are needed for specific behaviours • Choose one primary persona who, if satisfied, means others are likely to be satisfied 2. Personas are models of characteristics and environment • Information-seeking scenario • Purchase scenario – new customer • Purchase scenario – existing customer
- 19. 19 4.10 Researching the online customer
- 20. 20 4.10 Researching the online customer
- 21. 21 4.11 The post-literate customer The post-literate customer seeks relationships not from brands themselves Shift to • Databases that know, understand and seemingly care about them • Shops and vending machines • Relationships with people – real, quaint, touchy feely, physical people
- 22. 22 4.11 The post-literate customer
- 23. 23 Chapter summary • Consumers are motivated to venture online for socializing, shopping, entertainment. B2B customers are driven by cost savings, speed and selling. • We need to understand expectations for service delivery, making promises, and then delivering. • We need to support customers through each stage of the buying process. We need to account for mixed-method buying. • Understanding how customers process information through the stages of exposure, attention, comprehension, and perception, yielding and acceptance, and retention can help us design effective sites. • Marketers must support the buying process online (and offline). • Achieving online relationships and loyalty involved defining the ideal customers, understanding their needs and meeting them through the ‘primary determinants of loyalty’. • Online communities and social networks can be effective in delivering stickiness and understanding customer’s motivations and fears. • Profiling customers involves asking who they are, what they need, why, how and when they buy, and identifying segments. • Research involves answering profiling questions from online/offline, primary/secondary techniques. • The post-literate customer. Companies will need to respond to new technologies to offer new forms of customer relationships that meet customer needs.
Editor's Notes
- Learning outcomes: Understand online customers and their buying behaviour and how they differ from offline customers. ● Overcome the issues and concerns that online customers have. ● Begin to move Digital customers through their online mental stages.
- This chapter explores online customers – who they are, why they go online, their expectaions, their fears and their phobias. We examine their online buying process as well as their internal mental processes right through to forming relationships and building communities. The chapter finishes with a look at the future – the ‘post-literate customer’ – and shows you how to research the online customer.
- B2C customers are motivated to go online for a range of reasons – social, shopping, entertainment. B2B customers are driven by cost savings, speed and selling. enlightened companies realize there are other motivators such as enhanced customer relationships. In addition to delivering an excellent product or service, and what motivates your customers and then reflect it through your online and offline communications – a simple formula for success.
- Managing customers’ expectations is even more challenging in the online world because of raised expectations. We need to: 1 understand the customer’s expectations for service delivery and the gap with current delivery. 2 make clear service promises through privacy statements, promises and guarantees on security, delivery, price and customer-service response times. 3 deliver the service promise through a fast, easy-to-use site (including a mobile-opti- mized site), with competitive pricing backed up by excellent customer service and perfect fulfilment.
- the typical online customer has many anxieties and Fuds. Companies that succeed in reassuring customers by clearly addressing these, by communicating their security, privacy and ease of use, backed up by real quality of service, will reap the rewards through customer loyalty.
- understanding how customers process information through the stages of exposure, attention, comprehension and perception, yielding and acceptance, and retention can help us design sites – sites that really help us get our message across and deliver memorable messages and superior customer service.
- We have to support customers through each stage of the buying process: problem identification, information search, evaluation, decision, action and post sales. We need to think about how we can combine online and offline communications to support the customer through each stage of the buying process and also support mixed-mode buying at each stage. We also need to be self-critical about how we profile customers. What are the underlying variables that might influence the customer’s product purchase and usage patterns and can we track these patterns? techniques to achieve this are described in section 4.10 on researching the online customer. Finally, some customers want to search, compare and buy online. Others just want to browse. does your web site accommodate all stages of the buying process?
- To summarize, we need to keep ‘ideal’ customers for life by building strong emotional and rational bonds. Constantly listen to them and find out more about their needs, serve them and then plant seeds and relevant incentives to keep them coming back again and again.
- Well-run communities strengthen relationships, trust and loyalty as well as maintaining brand awareness in the minds of the community members. Communities also allow a unique opportunity to stay close to customers, their concerns, their worries and their desires. despite these benefits, building an active community can be time-consuming, expensive and difficult. Careful moderation and seeding of topics from a subject expert may be required. an alternative approach is to hook up to an established community that has greater independence. either way, communities are part of the dynamic dialogue and the dynamic opportunities that today’s marketer enjoys.
- User profiles change as online penetration changes. Marketers can now target very precisely exactly which profile variables represent the ideal customer – as long as the marketers know the profile of their ideal customer segments.
- Today’s marketers have the most fantastic opportunity to research customers. We can track customers online, we can ask them questions online and we can have group discussions online. We can observe behaviour in reaction to new stimuli (new offers and/or new landing pages). We can gain a closer understanding of online customers. metrics combine new research techniques such as digital body language and traditional techniques such as focus groups and questionnaires. Disciplined marketers will take the opportunity and improve their customer research by mixing online and offline research techniques.
- As moore’s law (the observation made in 1965 by Gordon Moore, co-founder of intel, that the number of transistors per square inch on integrated circuits had doubled every year since the integrated circuit was invented) continues to hold true, the time-compressed, information-fatigued, disloyal, post-literate customer seeks relationships not from brands themselves, but from databases that know, understand and seemingly care about them (witness the virtual girlfriend relationships in Japan), relationships with shops and vending machines. oh, and relationships with people – real, quaint, touchy feely, physical people.