BUILDING A LINE TO CONSUMERSSIX MYTHS

Consumers are more open to trying new brands and retailers than ever before. Fifty-four per cent of consumers globally say they are more likely to try new brands than they were five years ago, and 30-40% engage in recessionary behaviour (e.g., searching for deals and using coupons). These kinds of behaviour are being enabled by digital technologies, such as online price comparisons, mobile search and social buying, which give consumers easier

access to choice and information. To retain consumer attention despite all these distractions, many brands seek to engage consumers (via relationship building, frequent interactions and attention-grabbing ads, etc.). However, evidence on the impact of engagement strategies is mixed. Drawing on more

than 150 marketer interviews and over 7,000 consumer surveys (in the US, UK and Asia-Pacific), Corporate Executive Board (CEB) explored what brands can do to boost consumer “stickiness”: purchase intent for a brand, follow through on that intent, and repurchase/recommendation.

A Mint-CEB initiative on exploring management trends.

Consumers follow the ‘funnel’ purchase path, i.e., start with a large consideration set and progressively winnow down to one brand

The “funnel” purchase model no longer represents the typical purchase path. In today’s world of distractions, consumers are just as likely to use either a “spindle” model—that is, continue to add options throughout the purchase process—or a “tunnel” model—that is, opt out of research altogether and buy the first brand they think of.

CEB’s programme MLC* surveyed 4,361 consumers on their purchase behaviour—only 33% followed the “funnel” approach, 32%, “spindle”, and 35%, “tunnel”.

To encourage more “tunnel” purchases, marketers should a) help consumers find peer validation, b) drive urgency around the purchase, and c) make it easier to buy through whichever channels consumers prefer.

33%

Source: Consumer Stickiness Survey 2011, CEB

Illustrations by Shyamal Banerjee; graphics by Ahmed Raza Khan/Mint

The Six Myths series compiled by business advisory firm Corporate Executive Board Co. (www.exbd.co.in) challenges conventional wisdom on how to address critical management priorities. Send your comments to feedback@livemint.com

Reality

Facts

Action steps

MYTH6

Frequency of purchase paths

n = 4,361

*Marketing Leadership Council, or MLC, is Corporate Executive Board's flagship programme for heads of marketing.

n = 393

Percentage of consumers who like a brand and/or have a relationship

Source: Consumer Stickiness Survey 2011, CEB

Relationships can make brand-neutral consumers develop more affinity

Brand affinity is a prerequisite for a relationship. In the absence of any brand affinity, the consumer is unlikely to be receptive to any relationship-building activity.

Don’t actively like the brand and not open to a relationship

23%Like the brand and have a relationship

44%Like the brand but have no relationship

Of those surveyed, only consumers with very strong brand affinity reported a brand relationship.

Brand affinity is built by reaching the subconscious without seeking the consumers’ active attention through attention-grabbing ads. Some of the ways to do this are: a) embed your brand in untapped or switchable consumer routines, b) identify and attach to their passions, and c) identify/activate craving triggers.

MYTH 1

To simplify consumer decisions, consumer recommendations, consis-tent messaging and buying guides are good enough

For each of the tactics above, there is an option that consumers trust more. Those making recommendations only help build trust, whereas advisers simplify trust, research and comparison. Messages that are relevant to the decision stage the consumer is in help simplify learning. Buying guides that also speak about the “why” behind the recommendations further help in building trust.

Research suggests that consumers like to be in control and look for brand-specific information from trusted sources. Today’s consumers are aware and like to make an informed choice.

Brands must help consumers trust the information they receive, learn effectively without distraction, and weigh alternatives confidently. Typically, companies are good at one of the three elements. It is hard for them to be good at all three. However, all three are important for a brand to successfully help the consumer navigate through his/her purchase decision.

MYTH5

Likeli

hood

of s

tickin

g

Interactions have no impact on stickness

MYTH4

Agree with

what it stands for

Never Less than once a month

Monthly Weekly Daily Receive messages from them

Have spoken to store

staff

Have loyalty

card

Frequent interactions with consumers help build relationships and boost stickiness

Consumers form relationships with brands as a result of shared values, not frequent interactions. More interactions do not mean more stickiness. In fact, frequent interactions can actually annoy consumers. One recent study* even found that contacting consumers more than once a day actually lowers engagement on Facebook.

*Michael Scissons, “Four Things Mark Zuckerberg Should Tell Every CMO”, ‘Advertising Age’, 18 August.

Interaction frequency

64% of brand relationships are based on shared values, while just 13% are based on interactions. Frequent interactions with consumers (e.g., via Facebook, Twitter, newsletters) have no significant impact on stickiness.

Companies should focus on building relationships rather than increasing frequency of interactions with consumers. Relationships are built on shared values, not frequent interactions.

Impact of frequent interactions on stickiness

Why do you feel you have a relationship with a brand?

64%

13% 11% 11%

Likeli

hood

of s

tickin

g (p

erce

ntag

e inc

reas

e)

Decision simplicity

Engagement

Strength of drivers

Impact on stickiness of selected drivers

n = 1,200

n = 1,200

Engaging consumers inoculates them against distractions—for example, cheaper options

For today’s information-overloaded consumer, purchase decision simplicity has a bigger impact on driving stickiness than engagement.

The impact of decision simplicity on stickiness is almost four times stronger than that of engagement.

MYTH3

To boost stickiness, focus less on engagement and more on simplifying consumer purchase decisions. Consumer engagement is about increasing the time and attention that consumers give to a brand. These interactions typically focus on brand-specific information and do not necessarily convey “why” consumers should prefer that particular brand. Purchase decision simplicity is about simplifying the complex choice a consumer faces before making a purchase. To simplify decisions, leading brands help consumers learn about products, trust the information they receive, and weigh the options.

1 2 3 4 5

A 20% increase in decision simplicity

almost doubles consumer stickiness

(it causes a 96% increase), while a similar increase in engagement only boosts

stickiness by 23%

Purchase-path drivers of stickiness

n = 1,200

Long-term brand affinity

In-the-moment purchase path

Involvement in the purchase process

Enthusiasm for purchase Perceived importance/urgency Perceived relevance to identity

Ease of learning Ease of trusting information Ease of weighing options

Decision simplicity

Long-term brand affinity is the biggest driver of stickiness

A consumer’s most recent brand experience drives stickiness more than long-term brand affinity. Brand affinity is the second biggest driver of consumer stickiness.

In-the-moment purchase-path factors account for 66% of stickiness, while long-term brand affinity accounts for just 34%.

MYTH 2

Ensure shopper marketing (understanding and supporting purchase decision making) is not neglected in favour of consumer marketing (brand building). Work towards making the purchase simpler for consumers. Consumers are overloaded with Information and are confused about their purchase decisions. A marketer’s job is to help simplify this decision making and not merely boost brand affinity.

34%

66%

20%

46%

Decision simplicity is the most important

driver of stickiness

Funnels33% of purchases

I’m open to anything

I narrow things down

I buy it

I’m open to anything

I know what

I want

I find it

I buy it

I change my mind three or

four times

I add more options

I buy it

Spindles32% of purchases

Tunnels35% of purchases