The Connected Consumer and the New Decision-Making Cycle

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1 Enterprise Marketing Management The Connected Consumer and the New Decision-Making Cycle by Brian Solis

2 Gen C will challenge your entire approach to customer engagement today Gen C weaves an interesting web and the dynamic customer journey Customers get buy with a little help from their friends C change in consumerism: A new bi-directional approach The connected marketer 2

3 Gen C With every day that passes, it seems that we re introduced to yet another mobile device or new social network or must-have mobile app. Welcome to the digital lifestyle. Your price of admission, though, isn t inexpensive. You re connected, always on, and that s OK. As part of, you re a connected consumer, and one of the benefits of membership is that you re not only connected but also incredibly informed and empowered. ers are among the most important customers to the future of business, and they will challenge your entire approach to customer engagement today. Unlike previous generations, is not a group bound by age, but instead by connectedness. Gen Cers can be likened to digital exhibitionists: everything they do, think and experience is shared through multiple networks. Online connections and shared experiences factor in to the decision-making process. Gen Cers place value not on friends and family but on strangers and authorities in their social networks who share similar interests. They see the world differently and share all experiences, whether it s in the real world or online through their social and mobile networks. Gen C is building an efficient human network where information and experiences serve as the ties that bind relationships. Therefore, it seems only fitting that a human touch is applied in marketing. Gen C is building an efficient human network where information and experiences serve as the ties that bind relationships. Therefore, it seems only fitting that a human touch is applied in marketing. and the 3

4 Meet Mary. She s Hispanic, age 35 44, with an annual income of $80,000 $100,000. She is married, has 2.3 kids, and has attended some college. While informative, this is not enough to engage real people in human networks. In July 2012, I attended the Social Media Marketing Commerce Summit in Amsterdam, hosted by MicroStrategy. Chief analyst of Business Intelligence Group Peter Gentsch took the stage to demonstrate a poignant example of how demographics often fall short for designing effective social media strategies. First he showed a slide with the following demographic data: Born in 1948 and grew up in England Married twice Two children Successful in business Wealthy Winter holidays spent in the Alps Likes dogs Peter then asked the audience if anyone cared to guess who it is. Someone yelled out, Prince Charles. He was right. To prove his point, Peter then showed another slide to introduce another customer: Born in 1948 and grew up in England Married twice Two children Successful in business Wealthy Winter holidays spent in the Alps Likes dogs Yes, it s the same data. He then asked the audience if anyone could guess who he was referring to this time. Guesses were abundant, but none were correct. Demographic data only gets us so far. In a human network, where Gen Cers rule their egosystems, personal insight and interests will reign supreme in your work going forward. His next slide revealed a picture of Ozzy Osbourne. Demographic data only gets us so far. In a human network, where Gen Cers rule their egosystems, personal insight and interests will reign supreme in your work going forward. and the 4

5 In your quest to become a connected marketer, studying demographics and psychographics is crucial. Let s take one more step back to see for what it really is: a connected group of customers who friend and follow others with similar interests. A move toward is a move toward what I refer to as interest graphs rather than the widely accepted notion of engaging social graphs. These terms might sound like social media buzzwords, but they do have distinct and important meanings. Social graphs One easy way to look at the differences between social graphs and interest graphs is to compare them to the notion of demographics (social graph) and psychographics (interest graph). It s the difference between finding and reaching people based on gender, age, income, education, and geography and connecting with people because of the interests, behavior, and resulting relationships they share. Interest graphs As you start to explore, you ll learn that it is by uncovering common interests, people, and patterns that you will form your strategies beyond typical demographic data. In 2011, I set out to demonstrate the scope and promise of interest graphs by studying Starbucks top 1 million followers on Twitter. Naturally I could assume that one common interest that these followers shared was an affinity for the Starbucks brand. I could also organize the data by demographics. But instead, I worked with PeopleBrowsr and its ReSearch.ly team to visualize what else captivated the people following Starbucks and how they connected with one another outside of the Starbucks relationship. The results were enlightening, to say the least. Demographics Gender, age, income, education and geography vs Psychographics Interests, behavior and resulting relationships they share and the 5

6 Research indicated that people who follow Starbucks......tend to describe themselves with expressive words. Top words included: Love L i fe Music Friends World...describe what is important to them on Twitter. Top of mind: Family People Mom W i fe Husband...(top users) are tweeting from: California New York Texas Florida Washington The interest graph is defined by connections, but it is brought to life through self-expression....have commonalities in Twitter bios. We found that: 42 percent express strong ties to family, religion and love 29 percent boast special interests, which is further discernible 22 percent are professionals who state their current place of employment and position 7 percent are students...are fascinated by and do the following: Identify themselves as enthusiasts, geeks, addicts, junkies and creatives Define their most popular areas of interest as music, food, coffee and fashion Potentially favor dogs over cats (2:1, as per their mentions) Work in either social media or marketing (note: if we were to change the scale of followers, we would open up the sample to a much broader set of professions) Are still in school. Despite accounting for 7 percent of stated occupation or focus, students account for more than any single professional field and the 6

7 The interest graph is defined by connections, but it is brought to life through self-expression. When we combine brand-centric relationships and conversations, the interest graph essentially becomes a brand graph a set of strong ties or direct relationships where the shared interest is the brand itself. Within each brand-related graph is a group of highly connected individuals that serve as a company s network of influence. The ReSearch.ly team extracted 50,000 of the most recent tweets that included a mention of Starbucks. We then analyzed the connections between people and identified the top 100 individuals and the number of their followers who also mentioned Starbucks within those 50,000 mentions. Doing so revealed Starbucks followers who could be viewed as leading the interest/brand graph and the conversations about Starbucks itself. When we combine brand-centric relationships and conversations, the interest graph essentially becomes a brand graph a set of strong ties or direct relationships where the shared interest is the brand itself. and the 7

8 Setting out to discover the balance of Generation C compared to your traditional and digital customers is only the first step. What we re talking about here goes beyond social media listening as well. This isn t about how many times your brand is mentioned in social networks, how it compares to your competitors, or whether or not your sentiment is mostly positive. This is about intelligence. It s about learning how to engage Gen Cers based on what and who is important to them and how they connect with each other and your business (or how they don t connect with your business) as a result. What you learn could be the difference between meaningful engagement and everyday marketing. Gen C isn t as elusive as we might think. Social and mobile media offer the gift of data, and data requires study and interpretation. To become a connected marketer and ultimately a connected business requires a new methodology for how this data is gathered, packaged, and made actionable in the right parts of the organization. In this case, we learned what s important to Starbucks customers as it relates to brand identity and visualized segmented networks, or nicheworks, around each topic. But this experiment only scratches the surface of what s possible. By studying interests, businesses no longer have to guess which campaigns or ideas will have relevance to their audiences. They can now study conversations and connections to inform global, national, and hyper-local campaigns and initiatives that resonate uniquely with desired segments and with the audience as a whole. Reveal customer sentiment using research Include customer feedback in product development Use insight to improve cross-channel marketing Humanize customer data to improve engagement and the 8

9 and the The gold mine of insight that can be tapped by studying Gen C will expedite your transformation from a great marketer to a great connected marketer. This is a tremendous coup for your business as it will benefit from relevant and compelling marketing, promotional, and advertising strategies. Further, your customers will take delight in the refreshing and humanized approach your business will exude. These newly relevant strategies will further optimize what many sales, marketing, and service strategies and processes are already designed to optimize: the customer funnel. There are many different versions of this funnel, but among the most basic and widely accepted is attention, interest, desire, and action (AIDA). This model describes the likely steps a customer may take in making a decision. Attention Interest Desire Action This spiral path documents the importance of earning customers attention early in the decisionmaking process to benefit from that awareness when customers are ready to think seriously about buying. Naturally, websites, representatives, marketing materials, and the like contribute to the shepherding of customers as they travel down the funnel toward action hopefully in your favor. From there, depending on their experience, customers will then move toward a state of loyalty and, ultimately, advocacy. In many ways, marketing, sales, and service are designed to act as sherpas through customer engagement, guiding people along this delicate path, because, at any moment, consumers could fall off the path to a purchase with your company without direction or support. and the 9

10 In an era of connected consumerism, one in which Gen Cers are empowered to guide themselves through the decision-making cycle, new strategies are required to engage and inform. At any moment, customers can ask questions in social networks, compare prices through mobile apps, read real-time reviews by trusted sources, and watch videos with product information and customer experiences. In theory, they could decide to buy from you without ever visiting your website or speaking to a company representative. In Capitalizing on the Smarter Consumer, which studied new customer expectations, IBM learned that smarter consumers want to feel empowered and are therefore empowering themselves with access to information and people. According to the report, They want to use mobile technologies to make the shopping process easier and more pleasurable. And they want to take possession of the purchases they make in the ways they choose. Connected consumers dwell in their own egosystems; therefore, earning attention becomes paramount. Without awareness there can be no consideration. Hence, businesses today invest to varying degrees and effectiveness in marketing, advertising and communications strategies. These are the traditional ways businesses have reached out, and are not new today. They want to use mobile technologies to make the shopping process easier and more pleasurable. And they want to take possession of the purchases they make in the ways they choose. Capitalizing on the Smarter Consumer and the 10

11 Earning customer attention isn t toggling a switch on and off through traditional marketing campaigns; it is perpetually engaging them. The blaring noise that customers continually experience has forced them to adapt how they spend their attention. Second nature acts as a defense mechanism to tune out the constant barrage of marketing messages and clever campaigns. Awareness at the top of the funnel is more elusive but critical. For the sake of this discussion, let s assume that everyone understands the value of the funnel to attract customers and invest in long-term relationships. What happens if businesses are investing their time and resources in the wrong places? What if where we think we can impress upon customers or get them to notice us is not at all where their attention is actually focused? What happens if businesses are investing their time and resources in the wrong places? What if where we think we can impress upon customers or get them to notice us is not at all where their attention is actually focused? and the 11

12 These are important and timely questions to answer, as they will reveal a new funnel of sorts one that more accurately reflects the connected customer journey. The truth is that what we know and what we need to know are separated by an unfolding reality that requires immediate intervention. Your market has already been disrupted. Through an unforgiving series of technology revolutions paired with an era of individual empowerment, not only are your customers more informed, but their expectations have matured as well. Spiraling steps have evolved into something much more dynamic. The sea change in consumerism has ushered in a genre of connected consumers. As a result, your customers are learning about you or your competitors differently. How they make decisions does not follow a linear path at all. How they are influenced and, in turn, how they influence others are profound in their reach and effect. What was once a simple process is now a complex customer journey that is much more dynamic and connected. Engagement is as much art as it is science. But to better understand the behavior of takes practice with the social sciences, including digital anthropology, psychology, sociology and ethnography. When we understand behavior, we discover patterns in consumer activity that in themselves reveal new touch points. IBM also observed in Capitalizing on the Smarter Consumer that not only are connected customers smarter, but they also shop differently. According to one of the report s findings, They use technology to start and stop the shopping process and take days or even weeks to complete the various steps in the process, instead of shopping in a continuous linear flow. Through an unforgiving series of technology revolutions paired with an era of individual empowerment, not only are your customers more informed, but their expectations have matured as well. and the 12

13 Marketers must research how customers form and make decisions and what inspires empathy and creativity. This research will specifically point to what Altimeter Group refers to as the dynamic customer journey (DCJ). What you ll learn following your research is everything. Most notably, your business will now clarify how and where to focus efforts on shaping decisions and experiences before, during and after the purchase. Additionally, you ll learn the specific factors, people, technologies, communities and resources that affect every stage of your customer s journey. The results of studying the DCJ will contribute to a far more accurate point of view that tailors marketing, sales, service and loyalty strategies to be more effective and engaging. But it won t stop there. Inspired by McKinsey & Company s work and my own research during the writing of The End of Business as Usual, Altimeter Group reimagined the traditional funnel into a constant and very public elliptical path that often repeats itself. Source: Altimeter Group, 2012 and the 13

14 As customers begin their journey, your marketing and service strategy must align with the various steps Gen C takes to make a decision. Additionally, your channels and the messages within them must also align with expectations and search and consumption patterns. Developing your strategy requires a channel approach that considers and impacts the following stages: 1. Awareness 2. Consideration 3. Evaluation 4. Purchase 5. Experience 6. Loyalty 7. Advocacy The steps in the DCJ are familiar, reflecting methodologies in the traditional funnel. However, each step has unique contributing factors for how consumers discover, analyze, choose and share. The screens they use to search and purchase, the people who influence them, the content that informs them, the social networks they rely on, the collective experiences of others, and the real-time conversations that shape impressions introduce guidance, doubt and validation that works for or against you. For example, IBM offers a suite of Enterprise Marketing Management solutions that helps you engage customers in highly relevant, interactive dialogues across digital, social and traditional marketing channels. Gen C is obviously not the only customer group that s important to your business today. When developing a cross-channel management strategy, expect your marketing mix to account for the various behaviors of your customers as they go through the decisionmaking journey their way. and the 14

15 To simplify the approach, think about dividing the journey based on these four key pillars: Cross-channel campaign management Marketing performance optimization Digital marketing optimization Web analytics Engage customers in their preferred channels with dialogue that speaks to their preferences and behavior. Create a mini journey of your own by studying and managing performance and introducing efficiencies in real time to optimize initiatives and engagement in each stage of the customer journey. Understand who your customers are (traditional, digital and connected), how they click, and where they click to develop and deploy engaging ads, search campaigns, s, and recommendations through online, social, and mobile channels. Study how customers interact with your digital presences and convert insights into personalized and optimized actions and experiences. In its report exploring the evolution of digital consumerism, IBM found that without research and understanding, smarter customers are much more difficult to reach than their traditional or digital counterparts. Smarter consumers are harder to read than their predecessors, according to the report. They are also more cautious about spending their money and more resistant to marketing because they have other ways to get the information they require. The most important revelation in the DCJ is how every step feeds into a discoverable online repository of shared experiences that influence all those who embark on a similar journey. This journey rotates around a powerful influence loop. This information loop represents the social and mobile networks, conversations, reviews, videos, infographics, Pinterest boards, check-ins, and so on, as well as the questions and shared experiences that unite Gen C and power informed decision making and relationship building. Studying the influence loop will reveal what people are asking and how those questions are answered. You ll learn where they go for information, what they find when they get there, and what next steps they take. Most notably, you ll learn what is working for or against you. At a minimum, it will force and inform revisions to your overall digital marketing strategy, from content to campaigns to networks to direct engagement. Without positive influence, there is no hope for preference. And without positive experiences, there can be no chance for loyalty or advocacy. It is only by traveling in your customers digital footsteps that you can uncover a new landscape for engagement and a new reality for your business. Embracing your connected customers will help them embrace you in return. At a minimum, the gifts you receive by embarking on this journey and investing in engagement, education, and meaningful experiences are empathy, relevance, and ultimately reciprocity all of which are measurable by traditional business metrics. and the 15

16 Everything you re learning today helps set you apart from other marketers. Your journey to becoming a connected marketer is beneficial to both your career and the business that employs you. By studying Gen Cers and learning how to engage them, you are investing in an invaluable strategy of relevance that helps your business matter to influential, connected customers. You are competing for the future right now. As consumerism evolves, so do sales and marketing. And as sales and marketing evolve, so does spending. You are becoming a connected marketer, and by default you are on the right side of the budget. Those who continue to support traditional marketing efforts will find their work on the side with an evershrinking budget. To lead the requires much more than a technology, social or mobile strategy. As a connected marketer, your efforts must be those of an enabler of business objectives and business transformation. Gen C is not a trend. For the next several years, you will be pursuing a new breed of consumer in addition to your traditional and digital customers. Your work will have a sweeping impact on the organization, one that will inject meaning, substance and relevance not just to your connected customer but to all customers. Lead the way. Customers will follow. To find success in an era of connected consumerism requires focus, genuine intentions, and resolve. Everything begins with asking the right questions, starting with What are we trying to solve for? and Why? and the 16

17 Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY Produced in the United States of America February 2013 IBM, the IBM logo, and ibm.com are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at Copyright and trademark information at This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. THE INFORMATION IN THIS DOCUMENT IS PROVIDED AS IS WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. Please Recycle ZZU12352-USEN-01 and the 17

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