Archive for Buying Behavior

26 Feb 2010
Buying Behavior

The Three Minute Rule

Harvard Business Review recently posted an article by Anthony Tjan, CEO, Managing Partner and Founder of the venture capital firm Cue Ball.

He suggested that one way to know and understand customers better is by studying the broader context in which your customers use your product or service. To do this, ask what your customer is doing three minutes immediately before and three minutes after he uses your product or service.

The examples included Thomson, a media and information provider, asking the questions about products provided to investment analysts with financial earnings data. Immediately after getting the data, a large number of analysts were painstakingly importing it into Excel and reformatting it. This observation led to developing a more seamless Excel plug-in feature. The result was an almost immediate and very significant uplift in sales.

In a study of female drug store shoppers, a significant number of women picked up a disposable camera after putting newborn diapers into their shopping carts. Follow-up interviews confirmed that snap-happy moms were often new moms. Placing disposable diapers close to inexpensive disposable cameras furthered this purchase pattern and would not have otherwise been an intuitive merchandising or cross-selling strategy.

In the book, Why We Buy, author Paco Underhill describes how shoppers who do not have a shopping basket or shopping cart go quickly to the checkout when their arms get full. A casual observer says that is obvious. A savvier approach might be to interview people in a checkout line with an armful of goods to ask where they were three minutes earlier and if they would have considered buying anything else if it hadn’t been so difficult to carry so many items. Underhill concludes that more establishments should consider putting shopping baskets in the middle of the store to keep customers in shopping mode longer (since research showed that few would go back to the front of the store to get a cart once engaged with shopping).

These situations illustrate how easy it is to fall prey to narrow thinking. In the Thomson example, they thought of themselves as a data provider, though they were really part of a broader workflow solution. In the cross-selling and shopping-basket examples, the three-minute rule reminds us that rearranging the context of a shopping experience to better meet customer patterns can be extremely effective. Customers seek solutions, but it is likely that your offering is only part of one. The three-minute rule is a mechanism to see the bigger picture and adjacent opportunities.

Are you thinking of what your customers are doing? Is there a way we can help you provide a more complete solution?

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25 Feb 2010
Buying Behavior • Marketing Strategy

Pay It Forward

Trendwatching.com posted an extract from The Globe and Mail discussing the trend of helping consumers “feel good”.

“Paying it forward” is an old idea with new life lately. Many different major brands have launched promotional campaigns that blur the line between business and philanthropy.

Benjamin Franklin pioneered the idea more than 200 years ago when he lent a colleague some money on the condition that it be repaid not to Franklin but to someone else in need. Franklin wrote at the time: “This is a trick of mine for doing a deal of good with a little money.”

Maybe the idea caught fire because news of Feel Good Ripples spread due to what Wharton School professor Jonah Berger calls “social contagion,” a mechanism by which consumers and media decide what to pass along. “People like to talk about what is surprising, remarkable and unexpected,” Berger says. “They also like to talk about what makes them look good. Self-interest is a big driver.”

For more hedonistic brands, the experience has been mixed. Starbucks received some positive feedback in the mainstream press, but bloggers sniffed that the whole thing felt contrived. Starbucks customers reported feeling good about themselves when in 2006, news of a pay-it-forward phenomenon at Starbucks drive-throughs began to make the rounds. Customers pulled up to the window only to be told the driver ahead had already paid for their coffee. The cashier then asked if they would like to pay for the customer behind them. These chains of benevolent coffee purchases reportedly carried on unbroken for hours at a stretch (and still do, by some accounts). And that may be the real dividend from initiatives of this type. Berger’s assertion that acts of generosity are driven by self-interest may not be so cynical after all. In other words, if your company can make customers feel good–even in such an oblique fashion as facilitating their philanthropy–the customers are likely to transfer some of that goodwill back to your brand. That’s a “trick” of which Benjamin Franklin might have approved.

Here is a random act of kindness: Dean’s Mailing is offering a free marketing consultation to your favorite charity. This is valued at over $250.00 and will help save money and increase response.

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18 Feb 2010
Buying Behavior • Saving Money

Back to Basics

According to an article extracted from McKinsey Quarterly by Harvard Business Publishing, purchasers of consumer electronics have greater interest in products offering core benefits at attractive prices than in products with unused bells and whistles.

Consumer Attitudes Toward Products

Consumer Electronics Get Back to Basics

Part of marketing is product design, but I wonder do we need to embrace these trends in other areas too?

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11 Feb 2010
Advertising • Buying Behavior

Life Changing Opportunities

In December 2009, Deliver Magazine did a summary of statistics about new parents that they extracted from TheBump.com.

  • 69% of new and expecting moms use the samples received in pregnancy and parenting gift packs
  • $3,342.00 is the average amount spent during the first year of pregnancy
  • 85% of new parents set up a college savings plan
  • 82% of new parents create a will/living trust/estate plan
  • 67% of new parents book a vacation
  • 51% of new parents purchase or lease a new or pre-owned car
  • 32% of new parents purchase a home for primary residence.

These facts remind us that life changing events prompt changes in buying behavior. Other life changing moments:

  • Getting a driver’s license
  • Going to college
  • Entering the work force
  • Getting married
  • Empty nest
  • Retirement

I think you get the idea. I know that my friends are looking forward to children going away to college so they can finally fix up their houses. Can we help you reach a key group as they go through new experiences that lead to new needs and wants? Using a well defined list helps you speak directly to people who need and want what you have to offer.

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09 Feb 2010
Buying Behavior • Design • Direct Mail

The Power of Touch

Real Simple Magazine printed an extract of research results from The University of Wisconsin-Madison that found that 30 seconds is all you need to feel attached to an item after touching it. Research says you are 39 percent more likely to buy an item you touch as opposed to one you never handle.

Retailers, is there anything you can do to encourage your customers to touch things?

What about mail? Can you get a sample or a representation into the hands of your next customers?

University of Wisconsin-Madison Associate Professor of Marketing Joann Peck and Jennifer Wiggins of Kent State University found that the simple addition of a fuzzy dot glued to the cover of a mailing piece encouraged readers to spend more time with the mailer and increased response.

Talk to us about other ways to include something to touch with your direct mail.

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26 Jan 2010
Advertising • Buying Behavior

2010 Consumer Trends

Trendwatching.com published a list of key trends that they see for consumers in 2010. You may be interested as you think forward. We are  sharing a summary email that they sent out in November.

1. BUSINESS AS UNUSUAL The societal changes that will dominate 2010 were set in motion way before we temporarily stared into the abyss.

2. URBANY Urban culture is the culture. Extreme urbanization, in 2010, 2011, 2012 and far beyond will lead to more sophisticated and demanding consumers around the world.

3. REAL-TIME REVIEWS Whatever it is you’re selling or launching in 2010, it will be reviewed ‘en masse’, live, 24/7.

4. (F)LUXURY Closely tied to what constitutes status, which itself is becoming more fragmented, luxury will be whatever consumers want it to be over the next 12 months.

5. MASS MINGLING Online lifestyles are fueling ‘real world’ meet-ups like there’s no tomorrow, shattering all predictions about a desk-bound, virtual, isolated future.

6. ECO-EASY To really reach some meaningful sustainability goals in 2010, corporations and governments will have to forcefully make it ‘easy’ for consumers to be more green, by restricting the alternatives.

7. TRACKING & ALERTING Tracking and alerting are the new search, and 2010 will see countless new INFOLUST (consumers lusting after relevant information) services that will help consumers expand their web of control.

8. EMBEDDED GENEROSITY This year, generosity as a trend will adapt to the zeitgeist, leading to more pragmatic and collaborative donation services for consumers.

9. PROFILE MYNING (as in data and profile mining by its rightful owners, i.e. consumers) With hundreds of millions of consumers now nurturing some sort of online profile, 2010 will be a good year to help them make the most of it (financially), from intention-based models to digital afterlife services.

10. MATURIALISM 2010 will be even more opinionated, risque, outspoken, if not ‘raw’ than 2009; you can thank the anything-goes online world for that.

Some of these trends apply to you. How can we help you craft your marketing message to respond to what is happening now?

The trend for Mass Mingling also applies to marketing. Even though people are getting more and more information electronically, they are still responding to traditional communication channels. Mail can help cut through some of the electronic information competition and truly complement a multichannel communication strategy.

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19 Jan 2010
Buying Behavior • Direct Mail

The Mail Moment

Many businesses are re-evaluating any and all business decisions, including marketing decisions, during this economic cycle. They are looking at response rates to their marketing efforts and the costs to get those responses.

The US Postal Service published a study called “The Mail Moment”. This study was conducted a few years ago after most Americans had adopted new habits for shopping and gathering purchasing information using the Internet.

“The Mail Moment defines the highly interactive daily ritual that consumers devote to bringing in their Mail and discovering what it offers.”

“Right now – in a market you want to reach – your ideal prospect is just waiting for the moment. She’s eager to invite you in to see what your message can bring to her life. She’s even willing to set aside time to focus solely on what you have to say.”

“The study also found that Mail is placed where it’s seen and used and that it moves from room to room, allowing consumers to read it at their convenience. Mail may be the easiest way to reach household and financial decision makers.”

Mail is welcomed into people’s days and plays a unique and personal role in their lives. Mail offers you the opportunity to create an emotional connection with your customers.

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18 Jan 2010
Buying Behavior • Marketing Strategy • Tough Times Marketing

Thrive in Turbulence

Deliver Magazine (the marketing magazine published by the US Postal Service) interviewed Philip Kotler, Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University, and here are some highlights. He was talking about his book, Chaotics: The Business of Managing and Marketing in The Age of Turbulence. I remember reading Kotler’s books in college, it is great that his new ideas are still so relevant.

Eight ways to flourish despite widespread uncertainty and upheaval

1. Secure your market share from core customer segments. Your first priority is to get your core customer segments firmly secured. This is no time to get too greedy. Be prepared to ward off attacks from competitors attempting to take away your most loyal and profitable customers.

2. Push aggressively for greater market share. All companies fight for market share and, in chaotic times, many have been weakened. Slashing marketing budgets and sales travel budgets are sure signs that a competitor is buckling under pressure. Add to your core customer segments at the expense of your weakened competitors.

3. Research customers now more than ever. Everyone is under pressure during times of turbulence and chaos, which means all customers are changing their habits — even those in your core segments whom you know so well. Stay close to them. You don’t want to find yourself relying on old marketing messages that no longer resonate.

4. Seek to increase — or at least maintain — your marketing budget. This is the worst time to think about cutting anything in your marketing budget that targets your core customer segments. In fact, you need to add to this budget, or take money away from those forays you were planning to go after totally new customer segments. It’s time to secure the home front.

5. Focus on all that’s safe. When turbulence is scaring everyone in the market, there is a massive flight to safety by most consumers. They need to feel the safety and security of your company and its products and services. Do everything possible to communicate that continuing to do business with you is safe. Spend whatever it takes to do it.

6. Quickly drop programs that aren’t working. If you’re not watching your spending, rest assured that someone else is — including your peers whose budgets couldn’t be protected from the ax. Cut out ineffective programs before someone else calls attention to them.

7. Don’t discount your best brands. When you do this, you instantly tell the market two things: Your prices were too high before, and your brands won’t be worth the price in the future once the discount is gone. Instead, consider creating a new, distinct product or service offering under a new brand with lower prices. This gives value-conscious customers the ability to stay close to you while not alienating those still willing to pay for your higher-priced brands. Once the turbulence subsides, you may consider discontinuing your newly introduced branded value product line — or not.

8. Save the strong; lose the weak. In a turbulent economy, you need to make your strongest brands and products even stronger. There’s no time or money to be wasted on marginal brands or overly fragile products that aren’t supported by strong value propositions and a solid customer base.

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14 Jan 2010
Buying Behavior • Direct Mail

New Statistics About Mail

In a recent article in Target Marketing Magazine titled To Mail or Not to Mail author Pat Friesen cited some surprising statistics.

“Fifty-six percent of Americans surveyed by InnoMedia say receiving mail is a pleasure.”

“Sixty-seven percent of Americans feel traditional mail is more personal than Internet communications, according to research from the U.S. Postal Service.”

“Among Gen Yers (born 1977-1994) and Gen Xers (born 1965-1976), more than 70 percent sort their mail immediately reports the USPS.”

Young consumers invest time with their direct mail knowing it is advertising. They are motivated to receive information to help make buying decisions.

“Studies show direct mail is favorably received by young consumers because it’s tangible-they keep and browse through catalogs; it’s private-there’s an advantage to NOT being able to forward it to everyone in someone else’s address book; and it’s secure-58 percent still prefer receiving and paying bills by mail.”

“There are people who are more comfortable receiving and responding to direct mail than e-mail, even when they have e-mail addresses. For example, marketers of products and services for older seniors (75+), continue to use direct mail to generate leads and sales. These seniors are motivated readers that open and keep direct mail. NOTE: Don’t assume that because you have e-mail addresses for any age group, e-mail is the preferred medium for hearing from you.”

“Mail is more private than e-mail according to 66 percent of those participating in a recent U.S. Postal Service study. They said the Internet is not a substitute for mail. Sixty-eight percent also said mail is more secure.”

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08 Jan 2010
Buying Behavior • Marketing Strategy • Tough Times Marketing

Doing More with Less

These days we are all doing more with less:

  • Squeezing the very last bit of toothpaste from the tube
  • Cooking more at home, using leftovers
  • Giving your time as Christmas gift
  • Finding joy in shopping bargains

Direct mail has always been the advertising method that offers measurable results. Mail is scalable, you can send as many cards or letters as you can afford and have the resources to fulfill. In this economic climate, this is still true and more important than ever.

We recently attended a seminar that talked about marketing. They spent a lot of time talking about websites, social networking, search optimization… Yes they are all important, yes they are more important now than ever before. However, they are not the only way you can and should interact with your customers and your potential customers. Do you have a valid email address from everyone who has purchased from you before? Does every one of your customers want your marketing messages in their email inbox? We know that different types of people respond to different types of messages from many sources.

You need to be able to be found in the moment of purchase, that means when someone searches for you on the Internet, you are there. But what about being on the short list of possible vendors? Maintaining relationships with customers who have purchased from you before is less expensive than investing resources to capture and create a bond with a new client.

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