Leveraging the modern purchasing funnel is one of the most powerful ways of maximising business ROI from your brand and marketing spend. Do you really know what the purchasing funnel is for your category, how you are performing against your competitors, where the holes are in your funnel, and how many customers you are really losing?

1. Leveraging the purchasing funnel for business performance: Achieving the highest ROI for your brand and marketing spend Copyright 2011 Longship Research & Consulting

3. Not always timed or targeted to influence key decision moments for consumers

4. Not always competitively aware

5. Often follows on from the previous year

6. Difficult to measure the business ROI

7. Performance often measured by brand and attribute factors rather than how it actually affects sales over the long-term and the business’ ROI2

9. Failure to take advantage of competitor weaknesses in terms of how people purchase products and services.

10. Brand and marketing spend on auto-pilot.

11. Difficult to prove the ROI for the business.

12. Difficult to justify marketing investment.

13. Only minor changes to business performance.3

15. Need awareness to be familiar, need to be familiar to give consideration, etc...

16. Awareness – do they know of your brand?

17. Familiarity – how familiar are they with your company and what you offer – advertising benefits, PR, online research?

18. Consideration – have they actively considered your brand – had a good look, have asked others about it, trialled it...?

19. Purchase - have they actually purchased your brand?

21. No generic funnels! Washing powder purchasing funnel Car purchasing funnel 6

22. Even differences by segment Super – blue collar Super – high income 7

24. Compounding effect

25. Comparison with competitors

26. Passive vs active loyalty

27. Channelling marketing resources8

28. The compounding effect 9

29. The compounding effect 10 A 5% improvement at each stage compounds...

30. The compounding effect 11 ...to a 20% improvement in purchase levels.

31. Customer loss 12 Find out where in the funnel you are losing customers.

32. Customer loss 13 Problem Problem

34. Understand why your consideration is so low. It could be:

35. Brand issues – reputational, brand relevance

36. Marketing issues – poor internet strategy and presence, wrong marketing messages, ineffective creative, poor VP, segmentation issues

37. Product issues – bad, not as good as competition

38. Service issues – poor service

39. ‘Competitor A’

40. Pricing issue?

41. Convenience issue?

43. Passive loyalty – inertia and are targets for switching

44. Interrupt the loyalty loop

45. Expand your active loyalist base

46. Requires a renewed focus on:

47. The purchase and post-purchase experience

48. Product and service quality

49. Customer satisfaction15

50. Active vs passive loyalty 16 Source: McKinsey consumer decision survey

51. Developing your purchasing funnel Define the category’s purchase process Identify conversion drivers by segment Evaluate your brand’s performance vs competitors Quantify the value of increasing conversion Develop strategies and programs to address gaps Link metrics to increased sales and market share 17

53. How do people really buy?

54. What is their decision-making process?

55. Are there any material differences by segment?18 Your category purchasing funnel

57. What drives conversion at each stage of the process?19 Door Openers Deal Makers Loyalty Drivers

59. Reasonable access to branch

62. Consistent service

64. Understand their strengths and weaknesses.21

67. Identify the priority segments 23 Revenue impact of closing the gap on the lead competitor of 10% Revenue impact = $M Revenue impact of closing the gap on the lead competitor of 10% Revenue impact = $M Revenue impact of closing the gap on the lead competitor of 10% Revenue impact = $M

69. Develop and implement business and marketing strategies and programs

70. Do by segment

71. Touch points – influence customer-driven touch points24

72. Focusing marketing and brand investment 25 * Actual strategy will be informed by the research completed

74. Track regularly to assess strategies and adjust26

76. Tracks your performance at each stage and with key conversion drivers

77. Identifies changes in buyer behaviour and buying process27

78. Impact of the internet 28 Automotive category Traditional funnel Sales incentives & in-dealer programs here Marketing spend here

79. Impact of the internet 29 Automotive category Interrupt by focussing here Get repeat business and positive WOM here Awareness is still an advantage, but lack of it can be overcome by interrupting the funnel and focussing efforts on touch points that have the greatest impact

81. Explosion of product choices – on the one hand, makes brand awareness more important

82. Consumers can enter the funnel at different stages – on the other hand, makes brand awareness less important

83. Consumers often expand the funnel (rather than narrow it as was done through the traditional purchasing funnel

84. Depends on the category30

85. Impact of the internet 31 Mortgage broker category Traditional funnel New funnel

86. A new perspective 32 Can be aware but with no intention to purchase. Must identify the purchase intent trigger Passive or active loyalty? Advocate or saboteur? Product performance is now critical. Alternatives Peer reviews User-generated content The extent of research depends entirely on the category and target market. Recommendations from friends Different marketing messages required for different stages Value proposition / brand must be strong, relevant and different

87. Changing consumer behaviour 33

89. Getting through to consumers is becoming increasingly difficult due to clutter and busy lives. Awareness is a good start, but when something triggers consumers to buy, they will more actively research options to expand their awareness set anyway.

90. The purchase decision is often made at the retail end – ‘they walk in the store not having decided which brand to purchase yet’.34

92. Using mobile web to research prices while shopping

93. SMSinga friend or checking with your social network online for an opinion prior to purchase

94. Packaging, presentation and service has gained in importance (all at the point of sale)

95. The brand must have a quickly communicated clear and compelling value proposition35

97. Cohesive

98. Surprise and delight

99. Substantial benefits:

100. Stronger brand

101. Positive social WOM

102. Active loyalty

103. Increased revenue36

105. Total and consistent alignment

106. Definite target market

107. Full understanding of how customers buy

108. Focus marketing and branding investment to address customer leakage in the purchasing funnel/s

109. Track your performance against competitors and business metrics37 The sweet spot

111. What are the conversion drivers?

112. Where you are losing customers?

113. Are you better or worse than the competition?

114. How do you focus your marketing spend to maximise ROI?

115. How loyal are your customers? Are they passive or active?

116. Is your brand experience consistent and superior?

117. Are you tracking the right things?

118. How much revenue is being left on the table?38

120. Channel marketing and brand expenditure to the right areas

121. Accounts for both customer and competitor shifts

122. More clearly ties brand and marketing spend into a real ROI for the business

124. Purchasing funnel development

125. Specialist market researchBruce Stafford Managing Director bstafford@longship.com.au +61 411 606701 www.longship.com.au Copyright 2011 Longship Research & Consulting