2 Understand customer behavior: How do people buy?

We have already understood one factor that affects customer purchasing behavior: why customers buy, and we know the reasons behind customer behavior, that is, the ultimate goal of the behavior.

But from the goal to the final completion of the purchase, it involves the customer's purchase decision-making process, that is, how the customer purchases. This factor, together with the customer's reasons for purchasing, affects the customer's final behavior.

So to fully understand customer behavior and better conduct strategic marketing analysis, we need to continue to discuss another factor that affects customer purchasing behavior: How do people buy?

What do you do every day? We have to make various purchasing decisions, ranging from helping companies purchase machinery and equipment to eating and drinking water. What have you done to choose the product you like?

You can imagine people's purchasing as a decision-making process. Taken together, this decision-making process has five stages: Question Confirmation, information search, evaluation of alternatives, decision phase and evaluation phase.

Give an example to help you understand this decision-making process.

First of all, problem recognition is when consumers realize their needs. For example, it is 11 o'clock in the evening and you feel a little hungry. This means that you realize that you need to eat something. This is the problem confirmation stage.

Next you enter the information search stage. In order to meet the needs, consumers search for products from various sources that can meet their needs.

You look around to see what is edible. You find a cake in the refrigerator, a box of chocolates in the drawer, and an apple in the kitchen that you took a bite of at lunch.

Next, we enter the evaluation stage of alternatives. After collecting so much product information, consumers will compare these products, form criteria for product selection based on this information, and form purchase intentions.

Your requirement for food is freshness. You think the apples have been kept for too long, so you are going to choose from cakes and chocolates.

Enter the decision-making stage, where consumers make decisions. Finally you decide to eat chocolate.

After eating the chocolate, you find that you are still very hungry. You enter the post-purchase evaluation stage and feel regretful. You would have been better off eating cake.

By understanding the customer purchasing process, marketers can find and capture opportunities in all aspects of decision-making, and formulate corresponding marketing strategies to make customers more likely to purchase their products.

If you are not a marketer, understanding this decision-making process can help you as a consumer reduce the chance of making the wrong purchase.

In this lesson, I will take you through the five stages of the customer purchase decision-making process: problem identification, information search, alternative solution evaluation, decision-making stage and evaluation stage, so as to find out the marketing What actions can people take in the customer's decision-making process to promote the customer's decision-making.

The first stage is called problem identification. That is, when a customer finds that there is a gap between the current state and his ideal state, "problems" will arise. At this time, customers will look for products to solve problems and meet their needs.

For marketers, how to seize marketing opportunities at this stage? Marketers can do three things:

For example, it is easy to identify whether one person is hungry and the other is thirsty. , but we don’t really know when he will be hungry or thirsty. Scenario mining is related to how marketing can occur at the right time and remind people of their desire for the product.

This picture is a marketing campaign that Colgate once conducted in some Southeast Asian countries. This little girl was eating an ice cream cone made by Luxue. After eating, she found that the ice cream stick in her hand slowly revealed its complete shape. , a bit like a toothbrush, with Colgate written on it and a sentence: Don't forget Colgate. This means that when you finish eating the ice cream, Colgate can help you solve the problem of oral hygiene and health!

First of all, Colgate keenly captures the oral problems that people may have after eating ice cream, and understands the problems and responds accordingly People's needs for cleanliness and health arise, so the scene where this problem often occurs is when people have just finished eating ice cream and have not done the next thing.

So Colgate presented itself at the right time, took control of this opportunity, and told people right away that you have encountered a problem, and don’t forget that I am your solution.

Then when people confirm the problem, they will consider understanding the value of the product they may want to buy, that is, whether it can meet their needs, or even meet their needs beyond expectations, so as to help themselves Make a decision - is it worth buying this product.

Entering the information search stage, where do customers go to find information? And after customers find the information, how do they perceive the value and judge which products meet their expectations?

First of all, we The sources of information to understand customers usually come from commercial information, personal information, experience information and public information, and according to research, personal information has the greatest influence on people.

So how do customers perceive the information and value conveyed by the product? In fact, people’s value perception of the product will continue to increase over time, that is, the value perception after purchase and use will be greater than Pre-purchase value perception.

Here we divide product attributes into search attributes, experience attributes and confidence attributes based on the time nodes when people perceive information.

At this stage, marketers must continuously improve customers’ perception of the value of their products in the collected information, and try to improve their perception of the value of the product before purchasing, relying more on product searches. attributes, thereby increasing the likelihood that customers will choose your product.

Then I will give you a detailed understanding of the cognitive characteristics of customers at this stage and the actions that marketers can take from the two aspects of customers' information sources and value perceptions.

We can divide the information that customers can collect into the following four categories: business information; personal information; experience information and public information.

The first type of public information is called third-party reviews, which are evaluations of products and services provided by objective and impartial professional organizations or professionals. For example, the American Consumer Reports magazine reviews various products in every issue. Conduct evaluations, such as testing the cleanliness of washing machines, testing the safety of cars, etc.

Another type of public information is called consumer reviews. For example, Dianping.com and the American Yelp website provide reviews of restaurants and other service facilities, and the reviews come from ordinary consumers.

You can think about it, which information source do you trust more when consuming and collecting information? You may be affected differently by different information sources for different products.

For example, if you buy a car, a product that is complex, expensive, and low-frequency that you don’t understand, you may trust professional reviews, that is, third-party reviews in public information; while eating a meal is relatively cheap. For high-frequency products, you may be more willing to accept recommendations from friends, which is personal information.

You might say that everyone is different, and that’s right.

Here is a statistic from the United States, showing which information sources American consumers use before making a purchase from 2004 to 2016. The length of the bars in the figure represents the overall influence of various information sources on people's purchases.

The most influential thing is personal information, and the second most influential thing is consumer comments in public information. The third and subsequent ones are all kinds of business information.

Then customers have searched for information. If marketers can make customers perceive from the obtained information that the final value gained from the product is greater than or equal to the price they will pay, the possibility of people purchasing the product will be greatly increased.

Now that you know people’s main sources of search information, how can you enhance customers’ perception of product value?

In fact, people’s perception of product value is not completed all at once; It will happen at different time points. For example, you don’t know the value of a course outside your circle before you understand it. At this time, the value perception is 0; later, you learn about outside the circle through articles and introductions from friends. Regarding the structure and system of the course, you begin to understand the value of the course. At this time, your value perception increases, and as you purchase the course and complete the course, the value perception the course brings to you will further increase.

We can use a simple model to show the dynamic change process of people's value perception. The horizontal axis represents time, and the intersection of the time axis and the dotted line represents the moment when we purchase the product.

The length of the line below represents the price we paid to buy this product. The triangle represents the change in people's value perception at different times, which has undergone a complete change from left to right.

At the moment of purchase, the value people can perceive is still not much, so in many cases the value people perceive is not as high as the value they pay. This is a huge challenge faced by many marketers. Because only when people have experience using the product after purchasing it, can they fully perceive the value of a product.

In order to increase customers' value perception as much as possible, marketers need to adopt different strategies at different points in time; on the other hand, they need to advance the point of customer perception so that customers can believe it when they purchase. The value of the product is greater than the price paid.

Because the reason why people buy a product is because they believe that the final value they get from the product will be greater than or equal to the price paid.

The last red line segment represents the value that customers will ultimately perceive from the product, and the red line segment must be greater than or equal to the purple line segment before people will buy this product.

So how can we make customers believe that the product will bring greater value when purchasing? Then we must understand what value users perceive before and after purchase.

Therefore, based on the time when customers perceive product value, before use, after use and for a period of time after use, we can divide product attributes into three categories, namely search attributes, experience attributes and confidence attributes.

Distinguishing the search attributes, experience attributes and confidence attributes of a product is based on when each product attribute is perceived by people as its value.

Once you understand the different attributes of a product, you can design a marketing strategy based on the characteristics of the product. If most of a company's value is created by search attributes, then marketing is easy because people can confirm the value of the product before they buy it.

But if a large part of the value of your product is created by experience attributes and confidence attributes, it will bring great challenges to customer perception, so you need to use some strategies and designs. Speed ??up people's perception of product value as much as possible and promote sales. Let’s take a closer look at various properties.

For example, the brand name, course topics, number of courses, and study duration of courses outside the circle are all values ??that you can confirm before purchasing.

So what can companies do to present their products to potential customers as completely as possible in advance and increase customers’ perception of the value of their products?

Companies can use advertising and publicity that customers are willing to contact. Channels can vividly display information that is conducive to increasing customer value perception to customers. For example, slogans in front of many stores and eye-catching banners in stores all play this role.

#######The second type of attributes is experience attributes, that is, customers must be in the process of using it to fully perceive the value.

Then the attribute of experience outside the circle is obviously the quality of teaching. Only after taking the class can you feel whether the teaching quality is good or not.

How can companies make people believe in the value brought by experience attributes before purchasing? In fact, the course provides free repair opportunities similar to the warranty system, the return and recall system of automobile companies, and online courses can also be launched for trial listening. Services, etc. can allow customers to increase their perception of value before purchasing.

The value that can be perceived later will be perceived earlier, making customers more willing to pay for the value.

The attribute of confidence outside the circle is that you believe that this course will help you do better in your future career development. This part of the value you really want must be the value you still cannot confirm after experiencing the course.

As for the confidence attribute, how can we make people confirm that this value can be realized? The first thing depends on the reputation of the brand. If the reputation of the brand outside the circle is getting stronger and stronger, even if people have not confirmed the value of the course , the reputation of this brand is enough for you to believe.

You can also find some students who have graduated to communicate with students who will study the course, and use their experiences to prove the value of the course.

For the three different types of attributes, companies can try to move the value experience of different attributes as far forward as possible, thereby increasing customers' value perception before purchasing and making them more willing to pay for the product.

At the end of the information search phase, customers have selected multiple products for their evaluation and selection based on perceived value and product price.

After that, people entered the alternative evaluation stage. Value has always been emphasized in marketing, so people are choosing the best value among different alternative products. Given the product quality I can get, give Determine the price I have to pay, and in the end people will definitely choose the product with the highest value.

In traditional economics, value is a physical quantity that can be measured, just like your height and weight. However, from a marketing perspective, there is a "relativity theory" of value perception, that is, the value of each product does not exist in isolation and cannot be measured. The perceived value of a product in a specific scenario depends on our comparison between products. Therefore, in order to better highlight the value of the product, marketers often need to set up a comparison scenario to help customers make choices.

Here I want to introduce you to a decoy effect model. There are two products AB in the picture on the left. We present them through two dimensions, namely attribute one: quality and attribute two: price. Good deal.

So what kind of products have advantages? Obviously in the quadrant, products with higher quality and more cost-effective prices have more advantages, so the products in the upper right corner are always better than the products in the lower left corner, so a company To gain a competitive advantage, you must create more value for customers. You must strive to move your products from the lower left corner to the upper right corner.

Product A is of good quality, but the price is not cost-effective; option B is of poor quality, but the price is cost-effective. In Figure 1, if you are asked to choose between A and B, you may want to think about it.

Let’s look at the picture on the right again. A and B remain unchanged, but an -A appears in the lower left corner of A. You know that A is definitely better than -A, and comparison becomes easier at this time, so -A is very useful. It is precisely because of its existence that people will find that A has a comparative advantage in the comparison of A, B, and -A. In the end, more people will choose A. This is also decoy effect.

Not only do people tend to compare products, they also tend to focus on products that are easy to compare. Many times when you ask people to independently evaluate a product, it is difficult for them to do so. Therefore, marketers must be good at designing baits and placing a product in a specific scenario. People have the opportunity to compare the relative advantages of the product and then they can tell what they want. Which product. As a customer, you can also find out whether there is a bait in the choice. Is your final choice the one you want most or is it influenced by the bait?

In its annual magazine subscription form, there are Two options: One option is an electronic version subscription for $59 a year, and the second option is a paper version plus electronic version for $125 a year.

These are the choices of low quality and low price and high quality and high price. Obviously the magazine expects people to choose the second option that makes the company more profitable. So if you were a consumer, which one would you choose to subscribe to?

Let’s look at the subscription form below. There is a second option (the middle option), which is to subscribe to the print version for US$125. Now think about which one you will choose to subscribe to?

Let’s take a look at a practical experiment. A professor selected two groups of one hundred MBAs from the MIT Sloan School of Management. Students participate in experiments.

Under the two experimental conditions, 68% of the people in the first subscription order chose the 59 yuan electronic version; and when the subscription order became three options, the 68% of people who chose the 59 yuan electronic version became The number of those who choose electronic version plus printed version rose to 84.

Obviously the bait of $125 for the printed version helped everyone make a value judgment faster and make a choice.

You can further think about if you want to promote the sales of 59 yuan electronic version, how do you achieve this goal?

If you want to make your product more competitive in sales , you can do two things. First of all, you need to understand the real needs of customers, design your products well, and create real value. This is your basic skill.

Even if your product has a strong value advantage, you still have to do the second thing, create an environment for the product, in which your product has a relative advantage, that is, create an -A .

After people compare various alternative products, they will enter the fourth stage - decision-making. This is also the last step of the purchase. The customer has already evaluated the value of the product, and the next step is to determine the purchase step.

Once an enterprise understands people’s decision-making characteristics during the decision-making stage, it can design in a more targeted manner to promote people’s decision-making.

However, in many cases when consumers make purchases or companies make purchases, the decision-making is not just made by a single person, but by many departments or individuals, each playing different roles.*** Complete a purchase decision at the same time.

Here I share with you a conceptual model: the decision-making unit DMU.

There are five typical characters. Initiators, influencers, deciders, actual buyers and users.

In fact, in addition to life, many roles also play a role in organizational purchases, such as a company buying a set of financial management software.

In addition to the common five roles, there is also a gatekeeper role. That is, if the character does not agree to the purchase, the purchase action cannot be implemented.

For example, if the company’s compliance department disagrees with the purchase, the purchase cannot proceed; in daily life, a boy wants to marry a girl, and the mother-in-law says that if you don’t have a house, then I won’t let my daughter get married. You, so at this time the mother-in-law becomes the gatekeeper.

Faced with different products, the five roles are often played by different people and involve different needs. Marketers need to sort out what DMUs there are and find out who they are and what they are. We also need to understand the core issues and most urgent needs that each of them is concerned about, and the channels through which each of them searches for information. In this way, we will design the channels for obtaining information based on the issues that he cares about. Marketing strategy.

From another perspective, in many cases the decision-making units DMU are interconnected, which will also create some new marketing opportunities for us.

Mogujie is a fashion e-commerce platform. More than 90% of its users are young women born in the 1995 generation.

Another brand is Heilan Home, which is a men's clothing retail brand based on physical stores.

The target customers of Mogujie and Heilan Home are completely different, but in recent years Heilan Home and Mogujie have done a lot of cooperation. An example here is that Heilan House uses Mogujie to establish clever connections between men's clothing users and buyers, influencers, girlfriends or wives to promote the sales of men's clothing.

Mogujie has a live broadcast channel and will invite some female anchors known as "Queens of Product Delivery" to broadcast products that women care about on Mogujie. In this cooperation, Mogujie asked the anchors to invite male friends to show how they look after wearing Heilan House clothes, and quickly diverted traffic to Heilan House. During one of the anchoring sessions, a flagship T-shirt from Heilan House received more than 3,000 orders in less than two hours.

At the same time, the Mogujie store exploration team will match the suits at Hailan House, try them on in real photos, and then teach other little girls how to dress up their boyfriends through live broadcasts.

They also chose some specific industries for cooperation, such as chauffeured drivers. They are all young men and will wear uniform formal clothes when working. However, if they are transformed into the ones on the right, their image and personal characteristics will be greatly improved. . For the amateur transformation part of the event, they started with the drivers on the Cao Cao Private Car APP and completed the transformation through this Mogu Street clothing expert, completely overturning our stereotype of private car drivers. The slogan of this event is there are no ugly husbands, only lazy girlfriends. Now you will know what all these activities have to do with DMU.

These boys are users of men's clothing, but their wives and girlfriends can play important roles in DMU, ??such as initiators, influencers, decision-makers or buyers.

Therefore, Heilan House uses this approach to leverage different roles in DMU, ??connect male users and female DMU roles, and promote sales.

For another example, taxi-hailing apps such as Didi Taxi are very commonly used in our lives, but the elderly also need to go out. What if they don’t know how to use this app?

The senior-friendly version of Didi Taxi allows parents to request a ride with just one click. As you can see in the picture on the right, children can help their parents take a taxi through operations. Parents are the actual users, and these young children help their parents complete the purchase, and they become decision-makers, buyers or influencers. This method is very similar to the example just now, and it also further expands our market and growth. our business.

The last stage is often overlooked by us, which is called post-purchase evaluation. Many companies believe that products are sold out. What impact do customers’ feelings and evaluations have?

But there is a phenomenon that often occurs after purchase, called cognitive dissonance. Customers will be worried about the shortcomings of the chosen brand, and they will also be upset about not getting the benefits of the brand they did not buy.

In the post-purchase evaluation stage, consumers will compare their expectations with their actual post-purchase experience to determine their level of satisfaction with the product and post-purchase activities.

This level of satisfaction will not only affect consumers' attitude towards this product and provide information for whether they will repeat purchases in the future, but will also affect other consumers' attitudes towards this product.

Therefore, companies need to work hard to help customers justify their purchases, help customers resolve cognitive dissonance before purchasing, understand their customers better and dispel their doubts and confusions.

For example, if you buy a new mobile phone, you will also check the current price of the mobile phone you bought before. How would you feel if you found that the price of this phone dropped by 10% every week?

You would feel that you were at a loss and it was not cost-effective to buy this phone. This is what we're saying, you're experiencing a cognitive dissonance.

If a customer experiences cognitive dissonance and finds that the price of the mobile phone he just bought dropped rapidly, do you think he will buy this brand next time he buys a mobile phone?

Contrary To put it bluntly, if a person does not experience cognitive dissonance when purchasing a mobile phone, and the price of the mobile phone continues to rise after buying it, then he is likely to buy the same mobile phone next time. Therefore, many companies must consider how to deal with the possible post-purchase cognitive dissonance of customers.

For those functional and practical purchases and consumption, customers are less likely to experience cognitive dissonance, while for consumption that emphasizes enjoyment, people are more likely to experience cognitive dissonance.

Therefore, one thing that companies have to do is to help customers justify their purchases, making them think that their purchases are right, there will be no problems, and they will definitely not make them regret.

A classic case is De Beers, the largest diamond dealer in the world. Diamonds are so expensive. How can we prevent customers from regretting, guilt and disorder after buying diamonds?

So De Beers has been shouting a slogan for decades: Diamonds are forever, and a diamond lasts forever.

In this case, although a person has spent a lot of money, he can justify his purchase by saying, "Don't look at such a small stone, it can be passed down forever. I bought it for something that will be passed down forever." Isn’t it legitimate?

This company also has a slogan: You can buy an eternal thing with only two months’ salary. Isn’t this just a small price to pay?

So before you go to buy this diamond, De Beers has already helped you resolve the cognitive dissonance, so people will happily buy it, and then it can further attract more people through word-of-mouth. Buy.

In the era of digital marketing, companies can often resolve the cognitive dissonance that people may have in advance. Through media publicity, we can legitimate our choices during the information search stage.

For example, in the case of medical cosmetology, due to social public opinion and high prices, many people are prone to mental disorders and find it difficult to convince themselves to make such purchases. Therefore, if they are engaged in medical beauty services, they have to think about how to resolve people's cognitive dissonance and justify people's purchases in advance.

For example, it emphasizes the cost-effective price of a single time and the high benefits brought by its long-lasting effect, thereby making it easier for people to accept it.

After understanding the two major factors of customer behavior, why to buy and how to buy, I would like to sum it up in two sentences: The first sentence comes from Peter Drucker, he is talking about what customers really buy. It is never what you think you are selling. So this sentence tells us to understand why customers buy and what exactly they want to buy.

The second sentence is that if you want to be successful and grow your business and revenue, you must combine the way you market your products with your potential customers' understanding of and purchase of your products. Only if the two methods match up. What is reflected here is the most basic idea of ????how people buy.

1. In order to understand and analyze how customers purchase, we can conduct analysis through a process model. It includes the following main links: problem confirmation, information search, alternative evaluation, decision-making, and post-purchase evaluation.

2. By understanding "Why do customers buy?" and understanding the real problems that customers want to solve, we also need to identify the exact scenario where the problem occurs in the "Problem Confirmation" stage, thereby locking in actual marketing opportunities. .

3. In the information search stage, marketers must not only know the sources of information channels preferred by customers, but also design different marketing strategies based on the differences in value perception timing corresponding to search attributes, experience attributes, and confidence attributes in the product. Marketing communication strategy.

4. In the alternative evaluation stage, consumers evaluate alternative products based on the value of the product. Marketers must understand the "theory of relativity" in value evaluation and accordingly design a situation with a comparative advantage for their products.

5. In the decision-making stage, there may be a variety of DMU's with different roles and play their respective roles. Marketers need to identify these DMUS and explore possible marketing challenges and key business opportunities accordingly.

6. In the post-purchase evaluation stage of consumers, companies must foresee the possible cognitive dissonance and provide the information needed to help consumers achieve legitimacy, thereby ensuring that repeat purchases are in place. Base.

Through the previous class and this class, you may have experienced the many differences between consumers. An in-depth understanding of consumers will help us better formulate marketing strategies.

Next, we will introduce customer-based marketing strategic decisions and start the theme of STP marketing, that is, how to segment the market for different customers and select target market segments.

lt; lt; lt; Business study notes from outside the circle