Book: Principles of Marketing, 13th edition. Author: Charles W. Lamb The consum

Book: Principles of Marketing, 13th edition.
Author: Charles W. Lamb
The consumer decision journey begins when an advertisement or other stimulus causes a consumer to research a number of products or services to meet his or her needs. Even at this early stage, the consumer may drop a number of items from the potential purchase set. The second phase of the journey begins when the consumer evaluates the alternatives, using input from peers, reviewers, retailers, the brand itself, and competitors. At this stage, new brands may be added and options from the initial set may be dropped as the selection criteria shift. The consumer then buys (or doesn’t buy) the product and, if he or she enjoys the purchase, may advocate and bond with the brand. This feedback loop of ratings, rankings, and referrals pressures brands to deliver a superior experience on an ongoing basis. Researchers have found that 60 percent of consumers of facial skin care products conduct an online search after a purchase is made. This is part of developing a deeper bond with the skin care product while eliminating cognitive dissonance.
Progressive firms armed with new technologies are actively working to exert greater influence over the decision-making journey. In order to minimize (or in some cases eliminate) the “consider and evaluate” phases of the consumer journey, a company must have four distinct but interconnected capabilities:
Automation streamlines journey steps. One example is letting people take a picture of a check and deposit it through an app rather than depositing it in person. While process automation is highly technical, it should always be done with simple, useful, and increasingly engaging consumer-side experiences in mind.
Proactive personalization uses information—either based on past interactions or collected through external sources—to instantaneously customize the customer experience. This capability ranges from a website remembering a customer’s log-in preferences to an airline automatically adding a frequent traveler to its upgrade list.
Contextual interaction uses knowledge about where a customer is in the journey to deliver them to the next set of interactions. Consider, for example, a retail website displaying the status of a recent order on its home page. Some hotels are pushing the boundaries of contextual interaction by configuring their apps to operate like keys when guests approach their rooms.
Journey innovation extends customer interactions to new sources of value, such as related products or partnered businesses. Many companies mine their data to figure out what adjacent goods or services a shopper might be interested in, then they put those products in front of the shopper in the middle of his or her journey. The best companies conduct open-ended testing and constantly prototype new services and features to best meet customer needs in the ever-changing, digitally connected market. For example, Delta Airline’s app integrates with ride-sharing service Uber so that travelers can book cars to pick them up when they arrive at their destinations.
To understand how a company can influence the consumer decision journey, let’s examine California-based solar panel provider Sungevity. This company’s “product” is a seamless, personalized customer journey built on innovative data management about the solar potential of each home. Consider the following Sungevity experience:
One of the creators of “The Consumer Decision Journey” model (David) experienced the Sungevity journey firsthand. The process began when he received a mailing with the message “Open this to find out how much the Edelman family can save on energy costs with solar panels.” The letter within contained a unique URL that led to a Google Earth image of David’s house with solar panels superimposed on the roof. The next click led to a page with custom calculations of energy savings, developed from Sungevity’s estimates of the family’s energy use, the roof angle, the presence of nearby trees, and the energy-generation potential of the 23 panels the company expected the roof to hold.
Another click connected David through his desktop to a live sales rep looking at the same pages David was. The rep expertly answered his questions and instantly sent him links to videos that explained the installation process and the economics of leasing versus buying. Two days later, Sungevity emailed David with the names and numbers of nearby homeowners who used its system and had agreed to serve as references. After checking these references, David returned to Sungevity’s site, where a single click connected him to a rep who knew precisely where he was on the journey and had a tailored lease ready for him. The rep emailed it and walked David through it, and then David e-signed. When he next visited the website, the landing page had changed to track the progress of the permitting and installation, with fresh alerts arriving as the process proceeded. Now, as a Sungevity customer, David receives regular reports on his panels’ energy generation and the resulting savings, along with tips on ways to conserve energy, based on his household’s characteristics.
Starting with its initial outreach and continuing to the installation and ongoing management of David’s panels, Sungevity customized and automated each step of the journey, making it so simple—and so compelling—for him to move from one step to the next that he never actively considered alternative providers. In essence, the company reconfigured the classic model of the consumer decision journey, immediately paring the consideration set to one brand, streamlining the evaluation phase and delivering David directly into the “loyalty loop.”
Another way firms are keeping customers in the loyalty loop is by using automated reordering. Express Scripts, the largest pharmacy benefit management organization in the United States, can automatically reorder customer prescriiptions when it is time to refill. Customers also receive reminders that they can save money if they transfer their prescriiptions to Express Scripts when they fill prescriiptions at local pharmacies. Similarly, when a customer orders an e-book on Amazon, the company uses finely tuned algorithms to suggest other books that he or she might want to read. Amazon offers automatic order scheduling on thousands of items from diapers to soft drinks. Customers can customize which items are sent, what day of the month they are sent, and how frequently they are sent. Some coffee makers, printers, and washing machines can even use wi-fi and special sensors to automatically place orders when supplies run low.
While automation can play a key role in keeping a consumer in the loyalty loop, if used incorrectly, it can cause customer loss. For example, when a problem arises and you call customer service you go through a long series of automated prompts. Receiving an automated answer that doesn’t fully answer the question can cause customer loyalty to decline quickly. A study of 2000 Swiss and German health-insurance customers found that customers would pay higher premiums when offered more options to interact with the health insurance companies. Clients said that they would pay $16 to $24 more a month to easily be able to speak to an identifiable professional at a service center rather than, for example, receiving only an anonymous response to an online query. A specific advisor for repeated contacts was most preferred. Customers not only want personal interactions by phone or chat but also some automated functions as well. They were happy to do a simple address change, for example, through a digital-only interaction.
Researchers have found two loyalty levels among customers: the satisfied and the committed. The satisfied are those who buy regularly, often out of habit, because they are satisfied with the brand’s performance over a long period. With consistently good experiences, they perceive the brand to be familiar, easy to buy, and dependable. The brand has become a comfortable habit, and there is no reason to change. For some low-involvement products, the satisfied are the core loyalty group.
The committed have a more intense and involved relationship with the brand. They are more likely to have an emotional attachment, to receive self-expressive benefits, and to have a use experience that goes beyond the functional. They are also more likely to be brand supporters, even telling others about the brand and its use experience.
The satisfied group can be represented by the phrase “one of my favorite brands,” which reflects satisfaction and a lack of motivation to change to another brand. The “committed” group can be represented by the phrase “I can’t imagine living without,” which suggests that there is a functional or emotional attachment that is so intense that the absence of the brand would be upsetting.
Researchers also identified specific brands that were mentioned most frequently among both the satisfied and the committed. Top brands among the satisfied group include Betty Crocker, Band-Aid, Clorox, KitchenAid, and Folgers. Top among the committed group include Apple, Microsoft, Netflix, and Chick-fil-A.
The objective of companies is to maintain lifetime customers, whether they are satisfied or committed loyal customers. Yet in some industries heavy competition and perhaps customer dissatisfaction results in people switching companies and/or brands. When there is a significant number of customers switching firms or products, it is called churning . In the wireless industry, carriers such as T-Mobile and Verizon offer a reimbursement of up to $650 per line to cover early termination fees to customers who are willing to make a switch from another service provider. In 2018, Sprint began a promotion campaign claiming “first to 5G,” attempting to entice customers who have slower download speeds. All of this creates churn and destroys loyalty.
Yet, firms have begun to realize that lost customers may not be “dead opportunities.” Sometimes exceptional promotional offers can win them back. Sirius, for example, offers “free listening” for a period of time to lost customers in an attempt to regain their business. Once a person has returned, companies should create a proactive strategy of reaching out to these customers to ensure their satisfaction with the product or service. For example, an email stating “we are glad you’re back!” followed by a short questionnaire covering reasons for the initial departure and current return and what can be done to improve their satisfaction will provide retention strategies.