The Value in Understanding the Customer Journey

The “Customer Journey” definition: A description of modern multi-channel buyer behaviour as consumers use different media to select suppliers, make purchases and gain customer support.

“Since new customers are harder to come by in an economic downturn, firms need to pay even more attention to building loyalty with their most important customers,” wrote Bruce Temkin, author of Customer Experience Correlates to Loyalty. “If firms lose pace with competitors’ customer experience, they may end up attenuating the negative impact of the economic downturn.”

This is why understanding the customer journey is so important. It enables companies to monitor the customer experience of their own brands as well as those of their competitors. Then produce a better value experience.

1. Focus on Value

Competition is increasing both locally and globally due mainly to the universality of the Internet. The developments of search combined with the speed of local search, thanks to mobile devices, means that identifying customer movements and satisfying their needs has never been more important.

However, to monitor customers in an effective way it is important to have a clear idea of what you wish your customers’ experience to be. In 2008 the Yankee Group carried out a global study of 150 plus service providers in the wireless, wireline, cable and satellite markets of the USA, UK, France, and Germany. The research found that just under 50% did not have a clear definition of what the customer experience should be.Many companies still think that price is the overriding factor. This is a myth. Price is just one factor in the value chain.

The 2010 Harris Interactive Customer Experience Impact Report looks at how much consumers are willing to spend to ensure a superior customer experience and the overall influence customer experience has on a company’s top and bottom line. In terms of the benefits of providing an exceptional experience, the report found that:

  • 85% of respondents stated they would be willing to pay up to
  • 25% more to ensure a superior customer experience.
  • 55% became a customer of a company because of their reputation for great customer service. 55% are willing to recommend a company due to outstanding service, more so than product or price.
  • 66% of respondents cited customer service as the biggest driver for encouraging greater spending.

(survey conducted online within the United States between June 30-July 2, 2010 among 2,217 adults (aged 18 and over) by Harris Interactive)

As for the other side of the coin – the effect of bad service – 79% of consumers that had a negative experience with a company told others about it.

In a blog by Matthew Moore February 2011, he highlights that it makes sense to try and give both existing and new customers the best possible experience and supports his argument with calculations from Satmetrix/Bain&Co who have stated that acquiring a customer can cost up to 5 times more than retaining a current one, and a 2% increase in customer retention can have the same effect on profits as cutting costs by 10%.

2. Finding the Value

Increasingly, big brands are using attribution modelling to discover which channels contribute what value, through the customer purchasing journey. It is not a simple process.

Most companies use the “last click wins” concept to attribute transactions. This rewards the last place the consumer visited before purchase. In a complex internet environment this is not an accurate means of measuring value. The problem is that it ignores the influence exerted in the purchasing cycle from such media as display, social media, and mobile.

“Last click wins” can attribute comparison sites with greater effect than they have because of the volume of traffic that goes through them. The desire to find a more effective way of following the customer journey is being sought therefore, seeking to discover which online and offline channels the customer has interacted with before purchase. Price comparison sites usually are the big winners in the “last click wins” system. This ignores the influence of brand building in conventional media and in the other increasingly important internet channels such as display, search and social media through computers and mobile applications.

When speaking with Marketing Week in January of this year, Alex Tait, head of digital marketing at the Post Office and chair of ISBA’s Digital Action Group in the UK says that the reliance on a “last click” perhaps jeopardises other effective forms of online marketing.

“Imagine a marketing manager looking at a media plan: they’re looking at different media alongside each other, like affiliate, search, behavioural targeting and display,” says Tait. “They might look down that plan and see one as being more expensive – such as display – and so remove it in favour of what they see as driving that conversion without really understanding how it all fits together. “But if you remove the display, you’re actually going to be impacting the overall performance, and the overall cost-per-sale. You’re not understanding how media works,” he says.

To try to understand the consumer journey better, techniques such as Tagging,track all a brand’s online marketing activity from one piece of code. This enables identification of the sites that are providing the most value. Google and Microsoft also have developed techniques and tools to identify value attached to each stage of the consumer journey.

Google’s research looks at the duration and type of journeys consumers make within certain sectors such as Finance, Gambling, and Travel. The results show that consumers who spend more time researching across multiple sites and search multiple times are of more value to brands.

3. Integrating Value

Many companies are missing this point. In research done by Forbes in 2011, they found that while nearly two thirds of respondents said that they segment and target customers based on an integrated view of customer behaviour, that view is not necessarily complete. Just 30% of respondents had a view of mobile behaviour and just 34% look at social media behaviour. In other words, the vast majority do not monitor or understand the customer journey within two of the most important and fastest growing segments within the media landscape. These segments are growing rapidly because this is where consumers can have a dialogue with each other and with brand companies. They are the antithesis of the outdated marketing model that pushes the product and pulls in the consumer.

All the current evidence indicates that brand value is created by understanding the consumer through a dialogue with them. Tracking their complete media journey, dialogue, and brand experience through the key periods of awareness, favourability, consideration, intent to purchase, conversion, and post sale service, will provide a more integrated view of how value is created and how it needs to be improved. This is because, done well, it provides information and guidance on what customers feel they want but more importantly initiates the process of anticipating customer needs, both tangible and intangible, that will provide a richer experience for them long term.

Intelligent Positioning offering consumer value

At Intelligent Positioning we gather, distill, and blend both qualitative and quantative data through our proprietory tools, social media engagement, the IP Research Centre, and our global marketing experience. These tools, processes and attributes help us to provide insights into the consumer journey empowering companies to better engage with their customers with speed, depth, and dialogue. In doing so, the customer journey creates staging posts for a brand’s lifetime value.