Marketers seem perplexed. Customers are changing, and so are their purchase patterns. A multinational seed company headquartered in Hyderabad could not understand why customers ditched it for almost an unknown brand when it was the top seller until the previous year. The company has been in business for many years and has been the market leader in the given product category for the last couple of years. They were baffled that till a few weeks back, the new brand was a little-known new brand and was not in the reckoning at all. The company could not unravel the mystery of where they went wrong or what a new company did that the customers changed so swiftly.
Yes, they didn’t do any wrong, but their competitors did more rights. Competitors could sense the customers’ changing buying behaviour and tweaked their marketing strategy accordingly. Marketing today is not only reaching customers, but it is reaching them with apt messages at the moments, touch points in marketing parlance, which influence their decisions most. Marketers appreciate the importance of touch points where their brand comes in contact or under the review of the customers. Marketers have used the traditional metaphor of “funnel” to explain the customer’s journey process. Starting with the awareness stage, at which customers have more expansive choices of brands to decide on, the funnel narrows down with lesser and lesser brands under consideration as the customers move to evaluation to decision and finally to the action stage when the actual purchase takes place. Conventionally, marketers’ primary focus remained at both ends of the funnel. Marketers do everything to see that their respective products remain in their minds when customers decide to go for the product (and to be part of the initial consideration set). Similarly, at the moment of purchase, they provide all the information and incentives to ensure that the customers buy their products. Broadly, the strategies focus on “push the products vigorously” to “win over” the customers.
Unfortunately, researchers have shown that the “winning over” strategy by focusing on both ends of the funnel and considering the customer decision process linear does not always work. Increased media exposure by 24X7 omnipresent multiple communication channels has opened many windows for the customers to search, find and evaluate new products and their respective characteristics. Now customers can always broaden their option baskets. In fact, even if a product cannot make it to the “initial consideration set”, there are many windows available to the marketers to bring their brands into the competition as the customers move forward in their purchase journey and finally become the customer’s final choice.
With the shift from one-way communication from marketer to customers to two-way engagement and conversation, marketers need more always-ready strategies to meet customers’ demands. Today, customers have become active information seekers and not dependent only on the information thrown by marketers. Now customers can get information through various online sources, and most importantly, from their own credible sources. Word of mouth has become a potent tool for influencing customers. Customers are pulling information from their own sources and making their own decisions.
According to McKinsey research, the customer’s decision-making process is almost circular today. After the trigger, customers finalise their initial consideration set and then move to the active evaluation stage, where they evaluate their options and make purchases. After the purchase, they have a post-purchase experience which affects their subsequent purchases. The active evaluation stage varies in duration and the efforts customers put into evaluating options. Customers do not close their search and continue to look for new alternatives. So, not everything is lost for brands which couldn’t find a place in the initial consideration sets of the customers or were not among the TOM (top of the mind) products of the customers. Contrary to the funnel analogy, the number of brands under consideration may swell during the active evaluation phase. New brands “interrupt” the decision-making process and “disrupt” the marketing strategies of marketers who focus only on the ends of the funnel.
The ignorance of the changed customer decision process proved costlier for the incumbent Hyderabad-based seed company. The new company found its unique selling proposition and promoted it through word of mouth. Company representatives started discussing the same with dealers; dealers shared this with farmers. When the time for the actual purchase came, the product was available everywhere at a competitive price. Even retailers happily talked about and promoted the product. Amazon has developed ways and means of reaching and influencing their existing and potential customers at every stage of their decision-making. Based on the customers’ online search and purchase data, Amazon can suggest possible options to them. Their packaging, delivery, and ease of making online payments make customers happy, who, in turn, talk enthusiastically about the brand.
The stories of Amazon and the seed company have many lessons. Corporations need not lose heart if they have missed out on being in the initial consideration set of customers’ decision-making. There are many opportunities that customers will look for and would like to interact with the new brands during the journey before they reach the final moment of purchase. No brand should be complacent that it is among the top players, and can continue to overpower customers with its traditional marketing strategy. It will be in the interest of marketers to appreciate customers’ changing preferences and keep adjusting their business strategy.