Chapter 11
From the Window to the Counter: Getting Shoppers to Buy
In This Chapter
Getting shoppers to identify themselves
Understanding your customers’ decision to purchase
Identifying purchase barriers
Re-contacting shoppers and overcoming barriers
Chapter 10 discusses ways you can protect and grow your relationship with your current customers. But you also need to find new customers. You can’t grow your business — in fact, you can’t even keep your business from shrinking — without a steady stream of new customers.
Many of your company’s marketing and advertising efforts are directed at increasing awareness of your brand and interest in your products. This means there’s a group of potential customers out there who are ready to begin a relationship with you. Many have gone so far as to actively investigate your product offerings. These are your hottest leads.
In this chapter, I use the term shopper to mean anyone who has shown an interest in your product. I talk about some ways to identify these potential customers. I also address some basic strategies for moving them from interested consumers to customers.
Identifying Shoppers
To execute database marketing campaigns targeted at shoppers, you need to know who they are. At a bare minimum, you need to have some sort of contact information — an e-mail address, phone number, or physical address, for example. You may know in great detail what potential customers are looking at on your website, but until you get them to identify themselves, you can’t communicate with them.
In this section, I explain a few approaches for getting anonymous shoppers to “raise their hands” and provide you with their contact information. In some cases, you can get customers to give you a great deal more information than that.
The information you can get from your shoppers ranges from just a simple e-mail address to a detailed description of their needs and interests. All the approaches I mention here boil down to one simple strategy: quid pro quo. Something for something. You need to give your shoppers something in return for the information you seek. That something doesn’t need to be financial. In fact, frequently an exchange of information is sufficient.
But you should be aware that even if a customer isn’t registered and logged into your website, you can still re-contact them. In Chapter 13, I talk in much more detail about marketing on the web. In particular, I discuss the notion of cookies — small files placed on a user’s machine to enable customization and tracking.
A common marketing technique is to place a tracking cookie on a user’s machine when they visit your website. When you buy advertising on other websites, you can ask those websites to look for that cookie and use it to serve up advertising content based on what the user was looking at on your website. This technique is called display re-targeting.
Put me on your mailing list: Getting customers to raise their hands
Suppose you’re in charge of customer acquisition for a catalog retailer. You have a limited marketing budget, which means you can only send a limited number of catalogs to prospects. One of your options is to buy prospect lists that match your typical customer profile.
But what if you have a group of potential customers that have actually requested a catalog? Being the savvy marketer you are, you’d recognize these as hot prospects. They have proactively shown an interest in your products. You wouldn’t think of spending money on a prospect list until you knew you could fulfill every single one of the catalog requests.
Allowing people to request information about your products is a simple way of identifying shoppers. In order to receive the requested information, the potential customer must at least give you some sort of contact information. Whether you fulfill the request via e-mail or traditional mail, you need some sort of address. Getting that allows you to continue the conversation — with someone who you already know is interested. No matter what business you’re in, you can find creative ways to exchange information with your customers.
Newsletters
One option is to publish a free — but subscription-based — monthly (or more frequent) newsletter. You can sign both customers and prospects up to receive news about new products and special events. Note that prospects who request the newsletter have explicitly identified themselves as interested in you.
Newsletters have several features that make them a particularly attractive marketing option. First, they can be published via e-mail, making them extremely cost effective to produce. E-mail also makes it easy for people to sign up. As a general rule, people are more willing to share their e-mail addresses than their home addresses. E-mail is slightly less invasive. Plus it simply doesn’t take as long.
But even if you decide to put your newsletter on actual paper, there are advantages to publishing one. For one thing, the newsletter does double duty as a customer-acquisition tool and as a customer-retention tool.
Recall Chapter 10’s discussion about customer-retention strategies and ways of keeping customers engaged. A newsletter is an excellent way to do exactly that. A newsletter is, in and of itself, an ongoing conversation with the customer.
Product information guides
Another popular approach is to offer more elaborate introductions to your products via a pamphlet, video, or other physical medium. Because this medium needs to be mailed, it allows you to capture the address of the person raising their hand.
Frequently these campaigns utilize something called direct-response TV (DRTV) — the use of TV commercials that ask the viewer to call or go online to order a product. Often they’re used as lead-generation tools. The viewer is asked to order a free video, CD, or some other physical information packet.
You don’t need to use DRTV. You can offer these informational materials online. You can also use print or even radio to solicit requests. Virtually any marketing or advertising channel can be used to drive hand-raisers to identify themselves to you in order to learn more about your products.
DRTV campaigns are used quite frequently in the pharmaceutical and medical device industries. In these industries, consumer database marketing is particularly tricky due to legal restrictions on the use of medical record data in marketing. By getting potential customers to request information, you can develop high-quality prospect lists without running afoul of regulations related to consumer data.
The use of CDs and videos is also quite popular in the travel and entertainment sector. Many popular vacation destinations produce material showing the wide array of attractions available, from beaches to theme parks to restaurants. Sometimes these materials are produced by the local Chamber of Commerce or other group of businesses. But many resort businesses produce them on their own.
Encouraging shoppers to register on your website
If a customer is browsing your website, that’s a good indication that they’re interested, at some level, in your products. This is classic shopping behavior. The problem is that much of this shopping is done anonymously. You can’t follow up with these customers if you don’t know who they are.
One solution to this problem is to get them to register on your site. If they’re logged into your website while they’re shopping, then you know who they are and what they’re looking at.
But even if they don’t log in every time they shop on your site, you may still be able to recognize them. Websites leave cookies on each user’s computer. Cookies are small files that are used to keep track of user profile information. I talk more about cookies and their use in online marketing in Chapter 13.
You can drop a cookie on a user’s machine when they initially register on your site. Then when they come back to your site, even if they don’t log in, you can recognize them by the information in the cookie (assuming, of course, that the user hasn’t deleted the cookie). A significant number of users do delete cookies. Estimates run as high as 40 percent. These estimates are a little murky, though, due to some nuances related to cookies. I discuss this subject in more detail in Chapter 13.
Incenting registrations by offering content
Earlier I mentioned newsletters as a vehicle for collecting e-mail addresses. You can publish your newsletter online rather than mail it out. In fact, requiring readers to register on your website to view the newsletter can provide you with a steady stream of new prospects. One advantage of this approach is that it comes with a built-in opportunity to advertise your newsletter — and in turn, your brand — online. You can place links to the newsletter on various web pages. And you have some control over what web searches will return a link to your page. I talk in more detail about marketing online in Chapter 13.
The same approach works for other content that you may want to publish online. Some companies have blogs that are partly intended as lead-generation tools. Similar considerations apply to social media marketing. For a much more detailed discussion of this topic, check out Social Media Marketing For Dummies (Wiley, 2012).
Incenting registrations by providing enhanced website features
In Chapter 3, I describe an experience that my wife and I had when buying new furniture. We were shopping around online. One company’s website had a particularly slick application that allowed us to enter the dimensions of various rooms. We could then click on various pieces of furniture and move them around the room to get a feel for how we wanted to arrange things. We had to register on the website to use this feature, which we were happy to do.
Offering access to enhanced website features in exchange for registration can be a very effective way of identifying shoppers. People who register in order to use these features tend to be very good prospects. What’s more, in using these features, those prospects become even more engaged with you. The longer these potential customers spend using your website, the more likely they are to follow through with a purchase.
I’ve seen an interior decorating site that allows you to upload pictures of your house. You can then select different paint colors, curtains, light fixtures, and other options. The site then gives you a virtual view of how all those options would look in your house.
I noticed another campaign being run by a home improvement store. Customers were encouraged to register so that they could keep track of past purchases. The hook was that you buy some things — like water filters, for example — quite infrequently. If you’re like me, you never remember which one of the 50 filters available actually fits your refrigerator. By registering on the site, you make this information available in the store, either through your own mobile device or by having an employee look it up for you.
Restricting access to content is also an effective way to drive registrations. This gated content, as it’s called, is made available only online and only to registered users of the site.
I rarely register on websites for content. But I recently registered on a site called lockerpulse.com. By logging in, I get access to every news story about Michigan Wolverines sports that appears on the web. And I get it every day. This is more information than I could possibly keep track of, but it does appeal to my rabid college sports fanaticism. It also illustrates a point about content-driven registrations. The content had better be good if you’re going to get people to sign up for it.
Clearly, the features and content you choose to offer on your website in exchange for registration are highly dependent on your type of business. But given the flexibility of the web and a little creativity, the possibilities are endless.
Not a Snap Decision: Understanding Your Customer’s Mindset
Some businesses rely heavily on impulse buyers. The businesses who pay to have their products placed in the grocery store checkout lane, such as chewing gum and candy bars, fit this mold. I don’t think I’ve ever gone into the grocery store planning to buy a candy bar. But I occasionally give in to an impulse while I’m standing in line.
Other products tend to require a good deal more thought on the part of the customer. Very few people take out a mortgage impulsively. A mortgage is a complicated and expensive product. Different banks offer different rates and fees, and fixed and variable rate products are available. Shopping for a mortgage is frequently an arduous process for the consumer.
You need to understand how your customers go about deciding to buy your products. Knowing where they are in their planning or research process allows you to help them along with relevant information. You also need to understand how far ahead of their purchase your customers begin investigating and planning. This allows you to time communications and offers effectively.
The decision-making process
Marketers tend to divide the process of making a purchase into four distinct phases:
1. Awareness: The consumer recognizes that they need or want something.
2. Research: The consumer investigates what’s out there and compares different products or services that might meet their need.
3. Purchase: The customer makes the purchase.
4. Post-purchase: Because customer retention is so important, marketers also focus on a follow-up phase.
When it comes to getting hand-raisers or shoppers to complete a purchase, I’ve found it helpful to focus on two distinct customer decisions. First, the customer is deciding whether to buy something. Do I really need a new car? Once the customer is past that decision, they move on to deciding whether they should buy the product from you. The way in which you talk to your shoppers changes, depending on which of these decisions they’re trying to make.
If you’re like me, you’re put off by high-pressure sales pitches. One reason for this is that many high-pressure pitches gloss over the difference between the two different decisions I just mentioned. Once you decide to buy a new vehicle, for example, you want some time to do your homework. You want to get comfortable that you’re making the correct decision.
Understanding the timeline for purchase decisions
If someone goes to your website and starts shopping for shoes, they’re probably going to make a purchase pretty quickly. You don’t have a very wide window of opportunity to get them to buy from you. You need to get your offer in front of them quickly.
Your strategy in this case would be to serve up content or offers on your website related to what the customer is doing. For example, you may notice that a customer browses your site and then jumps to a different site. If the customer comes back to your site a few minutes later, it’s a good indication that they’re interested in your product. At this point, you might decide to sweeten the pot by serving up a discount or some other offer during their session.
Other products have a more involved or time-consuming purchase cycle. As I mentioned, almost no one takes out a mortgage without shopping around. People tend to be very focused on rates. And rates change daily.
In the case of mortgages that are being used to refinance as opposed to purchase a house, the purchase decision is all about the rate. A customer may shop around for mortgage rates and then wait weeks or even months until rates go down enough to justify the cost of refinancing.
This means a consumer who’s shopping your website for rates may not be ready to refinance at that time. This situation makes re-contacting the shopper at a later time a viable option. One approach you might take is to offer to send the shopper an e-mail alert when rates drop. You could even allow the customer to tell you what rate they’re looking for. This approach guarantees that the timing of your communication will fit the customer’s needs.
Another aspect of purchase decisions is related specifically to planning. You typically don’t reserve a hotel room at a vacation resort the day before you leave. Vacations are planned months in advance. Cruise lines and resort hotels know far in advance when they have potential occupancy problems.
This advance notice gives these businesses the opportunity to craft discounted offers to fill potential gaps in their reservation volume. Understanding the typical planning timeline of their customers also allows them to avoid discounting their product until they recognize that sales are soft.
So Why Didn’t They Buy? Overcoming Purchase Barriers
People consider a variety of factors when they shop for a product. What does it cost? How easy is it to buy? Is it high quality? If you’re trying to convince a shopper to go ahead and purchase your product, you need to understand what might prevent them from doing so. Your strategy for marketing to shoppers will be largely defined by the purchase barriers you’re trying to overcome.
Identifying purchase barriers
Some purchase barriers might be obvious to you. If you sell a high-end product, you probably know that price is an issue for many potential consumers. You may have a new product that hasn’t been sufficiently advertised, making consumer awareness an issue. The American auto industry suffered for years with a perception issue. Many people viewed American cars as being of inferior quality compared to their Japanese and European competitors.
Some barriers may not be immediately obvious to you. Your frontline sales staff is an excellent resource for helping you understand why customers shop but don’t purchase. Because they’re dealing directly with customers, they typically know where the sale breaks down.
Similarly you may be able to learn something about purchase barriers by analyzing the way customers use your website. For example, what was the last thing the customer looked at before they abandoned your website?
Survey research is a particularly effective tool for learning about purchase barriers. Small focus groups can also provide some insight because they allow the interviewer to dig deeply into consumer attitudes. Customers know why they didn’t buy. So ask them.
Types of barriers
I think about purchase barriers as being in one of three general categories:
Cost: Pretty much everyone checks the price before buying.
Perception: This relates to how the consumer views your product and how it fits in with their needs.
Convenience: This relates to how easy it is for the consumer to purchase the product.
In this section, I expand on various barriers. I also talk a little bit about strategies for overcoming these barriers.
Cost-related barriers
As I discuss in Chapter 7, some people are extremely price sensitive. They look for sales and discounts and rarely purchase anything without some financial incentive. You probably need to offer some sort of discount to incent price-sensitive shoppers to make a purchase.
Another group of consumers are more oriented toward quality or service levels. These consumers are willing to pay top dollar for premium benefits. Your approach to shoppers in this category should be to communicate those benefits. You want to show them what they’re getting for the money.
Frequently, you won’t have information on the price sensitivity of your shoppers. In these cases, a hybrid approach may be your best option. You could first contact your shopper with a message highlighting the value they’re getting for the price. If that doesn’t work, send a follow-up offer with a discount or some other promotional rate.
With shoppers, the first step is to get them to do business with you. Once you do, you can work on expanding your relationship with them. In Chapter 10, I talk about a variety of ways to upsell and cross-sell products to your customers to increase their profitability. Given the potential future revenue stream, using discounts to attract shoppers is effective and easily justifiable.
Introductory offers are sometimes quite effective at overcoming price-related barriers. Having recently moved, I’ve had to make decisions about choosing various service providers. My TV service provider, for example, sent me an offer to receive premium movie channels for free for several months if I bought their basic package. This type of approach doesn’t just help to get customers over the price hump. It also positions you to upsell the customer later. We got hooked on a couple of shows that were broadcast on the premium channels. So when the free offer expired, we went ahead and paid for the premium service.
Perception-related barriers
One type of perception-related barrier is actually a lack of perception. Consumers may not even be aware that you sell a certain type of product or service. For example, I had no idea that I could deposit money into my online trading account at a mail and shipping store until they sent me an e-mail.
Perception-related barriers often have to do with negative views of your product, such as the troubles of the auto industry related to quality concerns. Overcoming preconceptions about quality can be quite difficult, especially if the perception is rooted in fact.
When you address quality concerns, it is a good idea to let someone else do the talking. The credibility of your brand is what’s at issue. Customer testimonials are one way to do this. Another is to communicate positive results of customer satisfaction surveys. Still another is to play up awards that your products have received.
This approach played a large role in the resurgence of the American automotive industry. When the roots of their quality issues were addressed, these companies began to get some positive reviews. And they played them up for all they were worth. They’re still doing it, in fact. I can’t remember the last time I got a flyer from an auto dealer that didn’t contain customer satisfaction ratings or an image of a trophy or both.
Another dimension of perception barriers is people’s sensitivity to what’s “in.” There’s an expression I hear once in a while related to country music: “I was country when country wasn’t cool.” The country music industry has been incredibly successful at overcoming negative sentiment related to the genre.
Whether it’s the latest tech gadget, fashion craze, or book, people like to feel like they’re cool. One of my favorite authors, who has since been wildly successful, got his big break when one of his books was spotted in the president’s hand as he strolled across the White House lawn.
In positioning your product as socially relevant, images are very helpful. Use pictures of “cool” people using your products. Social media is also very useful.
The convenience barrier
Another type of barrier relates to convenience. The entire fast-food industry is based on our being in a hurry. Whether it’s short lines, streamlined applications, or easy checkout, you need to communicate these conveniences to your customers.
Many companies have lost business by not keeping up with the advances in e-commerce. Going into a bank to fill out a paper loan application is much less convenient than doing it online. For me, it’s doubly inconvenient because I invariably forget to bring some document or other critical piece of information.
A few months ago I was shopping for a gift for a relative. I knew she wanted a certain type of roasting pan. So I did a web search and clicked on the website of the first brand I recognized. From there I proceeded to spend ten minutes trying unsuccessfully to find the product I wanted. The web site was so poorly organized that I gave up and went somewhere else.
Social media and purchase barriers
Not a day goes by when I don’t see a post on Facebook asking for a recommendation for some product or other. A friend will be travelling to New York on business and want some restaurant suggestions. Another will be shopping for a new car and want to know if anybody has purchased a given make or model. Many won’t make a major purchase without consulting their Facebook friends.
And it’s not just Facebook. My wife routinely peruses the customer feedback posts on websites before she’s comfortable with decisions ranging from appliance purchases to hotel reservations.
A whole host of consumer ratings websites have sprung up over the last few years. Many specialize in a particular type of product. Tripadvisor.com has testimonials about practically every travel destination in the world. Carfax.com offers service audits for used vehicles. Angieslist.com gives ratings on local businesses based on customer experiences. The ratings on Angie’s List have been extremely helpful to my wife and me as we’ve moved around the country. It’s tough to know which plumber to call if you don’t have any experience in the area. It’s been said that the best advertising is word of mouth. Social media and consumer ratings sites can be your best friends in this regard.
Social media also forces you to be hyper-sensitive to customer service issues. Every bad experience a customer has with you can potentially end up being broadcast across the web. This makes it important to resolve issues quickly and to the customer’s satisfaction.