Online Customer Behavior

Online Customer Behavior

In this lesson, you’re expected to:
– understand the needs of consumers and how to improve the online experience
– learn about the online customer journey
– discover how to create personas to help your business

Buying behavior has become a lot more complex with the advent of the Internet. There are now many more influences on purchase, from search engines and social networks, media sites to personal blogs.

Understanding buyer behavior and the various factors that influence it can help make your marketing communications more effective.

Customer Analysis

It pays to always start with the customer when planning your approach whether it’s search, social, email or site design.   Understanding your customers online is the first step to improving your results from online channels.

It’s often easy to fail to find the time for analysis if you’re always executing. But with the pace of change of new digital technologies and marketing approaches, it’s important to keep it agile.

For digital marketing, strategic agility requires these characteristics and requirements for an organization to be successful in its strategy development:

1. Efficient collection, dissemination and evaluation of different information sources from the micro and macro-environment.
2. Efficient process for generating new strategies based on creating new value for customers.
3. Efficient research into potential customer value against the business value generated.
4. Efficient implementation of prototype of new functionality to deliver customer value
5. Efficient measurement and review of results from prototypes to revise further to improve proposition or to end trial.

Online Demand Analysis

If you’re moving into a current or new product/service area and would like to know if it’s worth investing in, then demand analysis is required.

You need to analyze the market to find out if there is a demand online, which usually translates into a demand offline. This marketing information puts you in the driving seat telling you if there is a market and where that market is growing or declining, so you can make a crucial decision before wasting a lot of money or resources.

Some key factors that you should be aware of in analyzing demand of your product or service:

– Current Demand: Ascertain the current online demand for your products & services & let you know whether a strong market exists.

– Keywords Used:
 Identify the most common targeted search terms for your products & services to use within your online & traditional marketing.

– Competition: Identify online rivals that target your products or services & find out how easy or difficult it is to compete online for each.

– Seasonal Trends: Identify patterns of high & low demand to predict & prepare peak seasons demands.

– Locations: Identify peak demand for your products & services nationally & internationally to help target your marketing online.

Online vs Offline Consumer Habits

Online vs. Offline

While there has definitely been a huge growth in online sales, it’s important to remember that 90% of consumer purchases are still made at a retail outlet. That doesn’t mean that online doesn’t have a huge influence – it does. Consumers still want the gratification of seeing and touching a product before paying for it.

Research Online, Purchase Offline (ROPO)

ROPO, also called ROBO (Research online, buy offline) or O2S (Online-to-store) is a consumer behavior where they utilize consumer-generated content like reviews, blog posts, and videos to assist in their purchase decision. Once decided, they do not purchase online but visit a retail outlet and make the purchase.

[Optional] A Short Guide to Online to Store
Watch this 2-minute video to learn more.

Link to the video:

Changing Online Consumer Habits

When it comes to shopping online for goods such as clothes, event tickets, books and toys, or reservations for hotels, people who browse online are just as likely to buy online, according to a new study by Nielsen.

This tendency to follow up online browsing with online buying, as opposed to heading to a brick-and mortar store, reflects the changing habits of the consumer, and brands and retailers would be wise to tailor the ecommerce experience to reflect this new reality, says John Burbank, president of strategic initiatives at Nielsen.

Stages of the Consumer Decision Process

The buyer decision process represents five stages that a consumer goes through before actually making the final purchase decision.

Stage 1: Recognition of Problem or Need
This process starts with the recognition of a particular problem or need that the buyer has that needs to be solved.

Stage 2: Search for Information
This is where buyers begin to search for information about the product or service.

Stage 3: Evaluation of Available Alternatives
The third stage involves the evaluation of the available alternatives whereby the buyer decides upon a set of criteria by which to assess each alternative.

Stage 4: Make Your Choice
The consumer buys or selects a product/service at this stage. Individuals or groups of buyers make the final choice of what to buy and from whom to buy it.

Stage 5: Post-Purchase Evaluation
The process continues even when the product or service is being consumed by the individual or business. So if it doesn’t meet your needs or solve your problem, you can take action to improve the product or service.

Now let’s look at the same process from an online consumer’s point of view.

Online Customer Behavior Process
In the search stage, a consumer might look for product reviews or customer comments. They will find out which brand or company offers them the best fit to their expectation.

During this stage, well-organized website structure and attractive design are important things to persuade consumers to be interested in buying a product or service.

Stage 1 
The most useful characteristic of the internet is that it supports the pre-purchase stage as it helps customers compare different options.

Stage 2 
During the purchasing stage, product assortment, sale services and information quality seem to be the most important point to help consumers decide what product they should select, or which seller they should buy from.

Stage 3 
Post-purchase behavior will become more important after their online purchase. Consumers sometimes have a concern about a product, or they might want to change or return the product that they have bought. Thus, return and exchange services become more important at this stage.

Online Customer Journey
Online Marketplace Map
Enlarged image:
Customer Journey to Online Purchase

The modern customer journey is complex. So it’s important to focus on the key moments that can help inspire people to buy your product or service.

The path to purchase, from start to finish, is rarely linear. Along the customer journey, one search can spark an entirely new idea or want and can make the difference between your brand and the competition.

Enlarged image:
Customer Journey
As you refine your understanding of the customer journey, consider the moments you want to capture at every step of the way. Think beyond the last click.

Enlarged image:

Search Path to Discovery
Here’s an example of someone who was actively looking for guidance and ultimately discovered another brand that also met her needs.

Enlarged image:

[Optional] Using Customer Journey Maps to Improve Customer Experience
Read this HBR article to learn more:
Understanding Customer Needs
Follow these steps to understand how to meet your customers’ needs:

1) Make a moments map
2) Understand customer needs in-the-moment
3) Use context to deliver the right experience
4) Optimize across the journey
5) Measure every moment that matters
1) Make a moments map

Identify a set of moments you want to capture your customers at. Examine all phases of the customer journey to map moments when people want to learn about your products or make a purchase.

2) Understand customers needs in-the-moment

Imagine yourself in the customer’s shoes. Ask yourself “What would make this easier or faster? What content or features would be most helpful?”

3) Use context to deliver the right experience

Leverage contextual signals like location and time of day to deliver experiences and messages that feel tailor-made for the moment. For example, let customers searching nearby your stores know when the products they’re looking for are in-stock or available for pickup in-store.

4) Optimize across the journey

People move seamlessly across screens and channels. Does your brand deliver seamlessly in return? Don’t let competing objectives stand in the way. To account for today’s complex, fractured journeys, anchor completely on the consumer and organize around their needs.
5) Measure every moment that matters

You cannot afford to under-serve your customers while you’re dealing with measurement gaps. While the return on investment for certain moments may not yet be directly measurable, ensure you use credible estimates.

[Optional] 12 Ways to Improve the Customer Experience for Online Shoppers
Defining Personas
What is a Persona?
A persona is a fictional character that is developed to characterize the key traits of a particular group of your target audience. This will include things like their motivations, needs, technical skills and other factors that will impact how they may interact with any of your digital marketing.

Why should you create Personas?
The objective of developing these personas is so that you can build your digital marketing strategy with these different groups in mind, and use the personas to help optimize the user journey at every stage. By asking the question “Does this work for persona X” at every stage of developing your digital marketing, you can create a user-focused development process.

Persona Creation Process

1) Research, analyze and survey
– gather intelligence, investigate your analytics and collect data through surveys

2) Data for personas
– find out likes/dislikes, values and needs

3) Name and define 
– using demographics, behavior, lifestyle, attitudes
– understand the key information about each of your personas and consider how this will impact their behavior

4) Product use scenarios
– consider the motivation of why your personas would use your product and how they would use it differently from other groups

Creating Personas based on Buying Behavior
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Benefits of Creating Personas

1) Helps website and experience meet customer needs
Both navigation and content can be made more customer-centred through use of personas. Focus on user needs and their top tasks.

2) Increases conversion
Whether conversion is actually increased will depend on the implementation. The focus on customer journeys and user task completion that the approach encourages should help with this as will creation of more engaging content which set the right tone to appeal to different types of purchasers.

3) Encourages site integration with other channels
If cross-channel personas can be adopted, this will help facilitate muliti-channel journeys.

4) Objective data
Improvements can be made based on clear data-led and research-led assumptions about priority users.

Today’s Customer Journey Has Gone Mobile

More and more, these moments across the customer journey are happening on mobile devices. Whether it’s performing a search, opening an app, visiting a website or watching a video, people turn to their mobile device to get answers or take action.

Google calls these Micro-Moments, and they are chances for brands to meet their customers at their moments of intent, when decisions are being made or preferences are being shaped. Consider four key moments that represent the full range of needs people have: I-Want-To-Know, I-Want-To-Go, I-Want-To-Buy and I-Want-To-Do Moments.

[Optional] Micro-Moments
Check out this link to see how mobile has affected online behavior:
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