BU7723 Understanding the Digital Customer

Karl Sinnott – k.sinnott@chester.ac.uk

Day Two

Session 3 – Lecture

Online consumer behavior models

BU7723 Understanding the Digital Customer

 Sessions
1. Introduction and exploration of basic
Buyer Behaviour topics and • Day One
importance of UDC
1. Assignment overview
2. Buyer behaviour and CDM (traditional
approach)
3. Online buyer behaviour models • Day Two
4. Segmentation
5. Personas • Day Three
6. Customer Journey I
7. Customer Journey II • Day Four
8. Data sources for persona and CJ
9. Assignment workshop I
• Assessment workshop
10. Assignment workshop II
11. TII Checker/Q&As • TII checker and additional Q&As

BU7723 Understanding the Digital Customer 2

 Review of day One

Key messages?
Spend just a few minutes on this
Complete the quiz

BU7723 Understanding the Digital Customer

 What is Consumer (Buyer)
Behavior?
Consumer behavior: the
study of the
processes involved
when individuals or
groups select,
purchase, use, or
dispose of products,
services, ideas, or
experiences to satisfy
needs and desires.
Solomon et al (2019)
BU7723 Understanding the Digital Customer 1-4
 We’ll look at process
models later and
tomorrow

Solomon et al (2019)
BU7723 Understanding the Digital Customer
 Why’s it important?
• Link to the Customer Experience

BU7723 Understanding the Digital Customer

 What is Customer
Experience?
“Customer experience is the cumulative
impact – both emotional and practical – of
all the encounters and interactions that a
customer has with a company.”

• Soudagar et al, 2012

BU7723 Understanding the Digital Customer

Looks what happens if we get
it right?

BU7723 Understanding the Digital Customer

The Benefits of ‘Understanding the
Customer’

Satisfied Increased
Customers Loyalty

Cost Engaged
Efficiency Employees

Competitive
Advantage

BU7723 Understanding the Digital Customer

 Why’s it important?
• Link to the Customer Experience
• The Digital Customer is different from
the offline customer
• UDC helps drive Digital Strategy AND
tactical recommendations

BU7723 Understanding the Digital Customer

 The Sequential Process of Consumer Buying This is where
we got to

One
• They become aware of a problem or need

Two
• They search for information

Three
• They evaluate the alternatives

Four
• They make the decision to buy

Five
• They buy it

Six
• Their post purchase evaluation
Adapted from Solomon et al (2019)

BU7723 Understanding the Digital Customer

1
 Alternative models
• AIDA
• Sales funnel

BU7723 Understanding the Digital Customer

 AIDA (Kotler)

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 The Traditional Buyer Path to
Purchase

Buyers use a similar linear path to purchase

Google, cited in Heitzman, 2017

BU7723 Understanding the Digital Customer

 Sessions
1. Introduction and exploration of basic
Buyer Behaviour topics and • Day One
importance of UDC
1. Assignment overview
2. Buyer behaviour and CDM (traditional
approach)
3. Online buyer behaviour models • Day Two
4. Segmentation
5. Personas • Day Three
6. Customer Journey I
7. Customer Journey II • Day Four
8. Data sources for persona and CJ
9. Assignment workshop I
• Assessment workshop
10. Assignment workshop II
11. TII Checker/Q&As • TII checker and additional Q&As

BU7723 Understanding the Digital Customer 15

Link to the assignment….?

BU7723 Understanding the Digital Customer

 Assessment strategy
Assignment – detailed guidance

Using an organisation to illustrate your discussion, you are required to produce a portfolio of
4,000 words.

The portfolio needs to include the following:-

• A critical discussion of TWO consumer behaviour theories, one of which must be a theory
relating to digital/online customer behaviour.
• A data driven persona for an organisation of your choice. The persona must be supported by
clear evidence of the sources utilised to develop the persona. Evidence should be presented
via screenshots, reference to reports, data etc.
• A data driven customer journey for the persona mentioned above. The customer journey must
also be supported by evidence including via screenshots, reference to reports, data etc.

BU7723 Understanding the Digital Customer 17

So why look at new
consumer behaviour
models?!

What’s wrong with

these models?

BU7723 Understanding the Digital Customer

It’s a bit old school!

BU7723 Understanding the Digital Customer

Let’s remind ourselves what’s
changed….

BU7723 Understanding the Digital Customer

 What’s Driving (disrupting)
Organisation Change?

Technology

Ecosystems

Customers Innovation

BU7723
Adapted from i-Scoop (n.d..) Understanding the Digital Customer
 Three Factors Driving
Disruption
Intelligence

Customer
Technology
Expectations

Disruption

BU7723 Understanding the Digital Customer

Kollmorgen, 2017
 Consumers in The Age Of
Assistance
The curious The demanding The impatient
consumer consumer consumer
• People have • Users expect • People are making
become research- every digital decisions faster
obsessed. experience to be than ever
• Users are personalised – • Users expect to be
researching more even when they able to act on
than ever, so each provide few those decisions in
decision (big or details. the moment.
small) is an
informed one.

Think With Google, 2018

BU7723 Understanding the Digital Customer
Also links to Customer
Experience
…from yesterday

BU7723 Understanding the Digital Customer

 Importance of Digital
Customer Experience

Salesforce, 2017 Temkin (2016)

(cited in Gilliland, 2017)BU7723 Understanding the Digital Customer
New models to understand the
Digital Customer’s behaviour

BU7723 Understanding the Digital Customer

 McKinsey’s Consumer
Decision Journey

BU7723 Understanding the Digital Customer

McKinsey, 2009
 How do McKinsey critique
‘traditional’ BB/CDM models?
What are the main points about
their model?
How does it differ from Solomon?

BU7723 Understanding the Digital Customer

 McKinsey Loop

BU7723 Understanding the Digital Customer

 Traditional CDM

Overall CDM is very ‘linear’

Lots of
Brand choice narrows
brands here
over the journey

BU7723 Understanding the Digital Customer

 Very research driven
approach
• Qual and quant research used
• 20,000 people surveyed
• Across 3 major geographies
• 5 sectors

BU7723 Understanding the Digital Customer

Ongoing exposure to brands Trigger

BU7723 Understanding the Digital Customer

Initial consideration set Active evaluation – more research,
more brands considered, more open
to channel influences

BU7723 Understanding the Digital Customer

Closure - purchase Post purchase – loyalty loop

BU7723 Understanding the Digital Customer

Loyalty loop - active and passive loyalty

BU7723 Understanding the Digital Customer

 Outcomes for marketers
• Risks
– Wasting money by focusing on the wrong
part of the journey
– Alienating customers by communicating to
them at the wrong time using the wrong
channel

BU7723 Understanding the Digital Customer

 Five areas of focus
1. Setting priorities
– Initial consideration stage and post
purchase/loyalty stage seem most likely to
drive sales
2. Messaging
– Important to be active at initial consideration
stage
– Also need to be provide access at active
evaluation stage

BU7723 Understanding the Digital Customer

 Five areas of focus
3. Invest in consumer driven vehicles
– AR, freemiums, trials, social proofing
4. Winning in store
– Packing, merchandising
5. Seamless customer experience

BU7723 Understanding the Digital Customer

 Importance of touchpoints
Activity is consumer
driven

Activity is company
driven

BU7723 Understanding the Digital Customer

 Importance of touchpoints
Consumer driven Company driven
• Talking to friends • Online advertising still
• Searching the internet important at initial
• Seeing ads consideration stage
• Affiliate sites
• Blogs
• Social media etc.

BU7723 Understanding the Digital Customer

Alternative to McKinsey

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 The Changing Buyer
Behaviour: The Messy Middle

BU7723 Understanding the Digital Customer

Rennie et al, 2020
 Messy middle

BU7723 Understanding the Digital Customer

Acknowledges that things
have changed….

BU7723 Understanding the Digital Customer

 Messy middle reflects the
multitude of influences on the
CDM

BU7723 Understanding the Digital Customer

 Messy middle
“I think of it as knowing the cheat codes
in the game of sales”

Think with Google

BU7723 Understanding the Digital Customer

Let’s break it down….

BU7723 Understanding the Digital Customer

 The Changing Buyer
Behaviour: The Messy Middle

Ongoing
exposure to
brand, past
experience,
WOM,
advertising
etc.

BU7723 Understanding the Digital Customer

Rennie et al, 2020
BU7723 Understanding the Digital Customer
What happens between the
trigger and purchase?

BU7723 Understanding the Digital Customer

 But this might
send you back
into exploration… Evaluation is
about narrowing
down the
options…

BU7723 Understanding the Digital Customer

Model then goes on to put
forward ideas to kick
customers out of the loop

BU7723 Understanding the Digital Customer

Leans on traditional CDM….

…..which looks at rational v emotional

influences on CDM
NB: Ignores influence of brand and price!

BU7723 Understanding the Digital Customer

 Six Elements That Influence
Purchase Decisions
Element Explanation
Being present Brand presence.

Category heuristics Short descriptions of key product specifications can simplify

purchase decisions. Eg. Sustainable, organic,
Power of now The longer you have to wait for a product, the weaker the
proposition becomes. FOMO
Social proof Recommendations and reviews from others can be very
persuasive. Aka ‘Herd instinct’
Scarcity bias As stock or availability of a product decreases, the more
desirable it becomes.
Authority bias Being swayed by an expert or trusted source.
Power of free A free gift with a purchase, even if unrelated, can be a
BU7723powerful motivator.
Understanding the Digital Customer
Rennie and Pretheroe, 2020
What difference might it
make?

BU7723 Understanding the Digital Customer

So these are like the Wheel of
Behaviour from Solomon

BU7723 Understanding the Digital Customer

 Remember this
from yesterday

BU7723 Understanding the Digital Customer

Let’s look at the research
using an example

BU7723 Understanding the Digital Customer

Research example

BU7723 Understanding the Digital Customer

 Being present
Brand presence Organic
PPC

BU7723 Understanding the Digital Customer

 Category heuristics
Short descriptions
of key product
specifications can
simplify purchase
decisions. Eg.
Sustainable,
organic

BU7723 Understanding the Digital Customer

 Power of free
• A free gift with a
purchase, even if
unrelated, can be a
powerful motivator.

BU7723 Understanding the Digital Customer

 Authority of bias
• Being swayed by an
expert or trusted
source.

BU7723 Understanding the Digital Customer

 Power of now
• The longer you have
to wait for a product,
the weaker the
proposition
becomes.

BU7723 Understanding the Digital Customer

 Scarcity bias
As stock or availability of
a product decreases, the
more desirable it
becomes. FOMO

BU7723 Understanding the Digital Customer

 Social proofing
Recommendations and
reviews from others can
be very persuasive. Aka
‘Herd instinct’

BU7723 Understanding the Digital Customer

Results of research

BU7723 Understanding the Digital Customer

 Bibliography
• Heinze, A, Fletcher, G, Rashid, T and Cruz, A (2017) Digital and social media marketing: a
results driven approach, Routledge
• VWO (2021) The complete guide to conversion rate optimisation [Online]. Available at:
https://vwo.com/conversion-rate-optimization/ [Accessed 27 November 2021]
• Kaplan K, (2016), When and How to Create Customer Journey Maps, [Online] available at:
https://www.nngroup.com/articles/customer-journey-mapping/ [Accessed 27 November 2021]
• Dale, L (2018) Customer journey maps, key tool for driving engagement [Online]. Available
at:
https://yfsmagazine.com/2016/03/11/customer-journey-maps-key-tool-for-driving-engagemen
t/
[Accessed 27 November 2021]
• McKinsey, (2009), The Consumer Decision Journey, [Online] available at:
https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consume
r-decision-journey
[Accessed 27 November 2021]
• Alvarez, H (2015) The No-Nonsense Guide to Mapping the Customer Journey. Available at:
https://www.usertesting.com/blog/2015/04/02/customer-journey-mapping/ [Accessed 27
November 2021]
• Dibb et al, (2006), Marketing: Concepts and Strategies, 5th Edition, Houghton Mifflin.
BU7723 Understanding the Digital Customer