The Purchase Funnel

I’ve a good amount of years analyzing how consumers behave when decided to buy a new computer, this is the consumer journey towards the purchase of a laptop or desktop, which in the marketing arena is called “The Purchase Funnel,” even is not a funnel any more, but a loop since decision-making process has become more complex, dynamic and its phases interdependent.

We all know that the final goal of marketing is to influence a potential customer to decide on buy companies’ products, and use every means of persuasive communication and interaction at companies disposal to influence the purchasing decision.

This process is the same consumers follow when buying any product or services, the only difference lies in the amount of time consumers spend in each state, for example, if the product is brand new in the market the most challenge stage is the awareness, but if the product is a convenience product, a candy already know, the preference and purchases stages are essential.

In this case I will focus on the purchase funnel or loop when buying a new computer, which takes about a month from the awareness and opinion form to the actual purchases, this journey is very similar when consumers buy cars, cameras, video game consoles, and other consumer electronics products.

Obviously the first stage in this process is Awareness since consumers have to be aware of the existence of companies’ product, if consumers don’t know that your product exist is most likely that none will buy the product, but as I mention before now the decision-making process has change so much that some brands are able to be unknown during the whole process, but jump right the moment before you will actually buy, think of some wines you have bought without even known how to pronounce the brand. In terms of computers most of the brands are already well known, so in this stage consumers learn about new technologies, microprocessors or software, and any upgrade in the design of models.

The second stages is the Opinion Forming stage, here is when consumers consider an initial set of brands, base on brands perceptions and exposure to recent touch points, there are different ways to consumers build perceptions about brands, but some of the communications forms companies use at this level are press releases, social media and above the line tactics (broadcasting and print), at this stage is important for brands to become relevant, and engage with consumers to drive desire for your brand.

The third stage is the Preference, here consumers add or subtract brands as they evaluate what they want, during this process the research part play an essential role, since consumers spend a significant amount of time in deciding which product will be the best for their needs, this stages is probably the one that has changed the most with internet, since people have more access to different type of information, think about this stage before the internet, your only source of information when buying a car was the car dealer and probably if you were lucky a mechanic friend, think about this process now, there are expert blogs, online forums, reviews sections, editors reviews, rankings, etc all these new sources of information to do a better research, these new sources play a essential role in the decision-making process, here your brand depends in how the experts rate your product, and unfortunately or fortunately companies don’t control this.

If your product is consider the best in the market companies can charge a premium for that, think about Apple’s laptops, they are goods and experts love them, but if you look carefully most of the users don’t even use all the capabilities of the Apple, or those features that experts use to proclaim them as the best ones, actually most of the users use them more as a “normal” PC but anyway they pay an extra 20% just because experts like it. This stage is now the most important stage for consumer electronics and the one consumers spend the most time when considering buying a product, some of the efforts companies can do to participate in this stage and try to “control” some of consumers research are retail champions or train the trainers, seed units to experts, product presentation to bloggers, launch events with editors showing products capabilities, social media participation, own blog and online forum, among others.

The fourth stage is the Purchase, here the consumers select a brand at the moment of purchase, as I’ve wrote before this stage has evolved into an experiential one, as I mentioned in the Microsoft Retail Store, retailers understand that this final stage consumers see it at different ways, for example consumers buying a computer in Wal-Mart are consumers that only care about the price, instead there are consumers that will never buy a computer in Wal-Mart because they want some finally explication of which computer is the best, and to have some support if the computers have any problem, that’s why Best Buy still sells the most of them, but at the same time there are consumers that already know which computer want to buy, and actually they are the wants that build it, so here is when online plays a big role, finally there are consumers that still look for the experience of buying a new product like this, which could be a big event, probably getting into a college here is where Sony Style or Apple Store play an important role.

The final stage could be considered the Repurchasing or Loyalty, after purchasing a product or services consumers build expectations based on experience to inform the best decision journey.

As you can see the Purchase Funnel has several “touch points” with end users and in each touch point brands can influences some behavior of consumers and actually influence their decisions. It is clear that the class has help me to understanding how consumers from different culture, age, sex behave and how we can work towards attracting most of them or at least think more about the different customers out there.

Is Gamestop the next Blockcuster?

Last week I went to Gamestop, the world's largest video game store chain, to observe how the consumers behave in the store and what they buy.

After five minutes in there, I felt that I was in the Blockbuster of video games, I saw 7 different customers and all of them went directly to the pre-owned games, they looked around for about five to ten minutes and then either buy one game ($20) or left the store. Most of them don’t even looked at the new games or accessories, I interviewed 3 of the consumers and asked why they go to Gamestop and the three of them told me that they usually get good deals specially in the pre-owned section and they like to trade their video games.

I also talked with the two employees, and both of them were hard core gamers, one had a Playstation 3 and the other a XBOX 360, you can tell how passionate were about the video games, new releases and new accessories, they were almost “fighting” each other when I asked which console should I buy, but at the same time they didn’t put to much attention to consumer service, they talked with me because I asked no because they wanted to.

Then I started thinking on the shift in our culture towards game downloads directly to the console or PC, especially since Playstation and Xbox have a huge hard disk. Why not just follow Netflix’s business model?

Gamestop stores are small, so the experience using and trying videogames is not the optimal. At the same time there are a lot of end users that are casual gamers, they owned a console before but now they are playing anger birds in their iPhones or FarmVillage at Facebook, so there might be a decrease in the total available market in the video game consoles industry and this also affects Gamestop’s sales.

After my visit to Gamestop, I decided to go and see Best Buy, and the experience was totally different they have 3 huge plasmas TV connected to each console (Playstation, Xbox and Wii) and you can try several games with the new Xbox Kinect and Playstation Move, the people spend more time in the game section comparing with the amount of time they spend in Gamestop, probably some of them just go there to play, but still they have fun inside the store.

Best Buy also sells pre-owned games, but they have better boundless and sales for the new products comparing with Gamestop, or at least is what I saw in my visit, the game zone had huge displays with the new video game Killzone 3, and there were about 6 more stations to play different video games.

Most of the consumers buy new video games at Best Buy. I saw one consumer buying a Wii with 3 new accessories, he told me he didn’t know if it was cheaper to buy it here but he likes to go and buy in Best Buy because the store look much more attractive to him, and here is when I remembered Marc Gobe advice “Think retail as Advertising,” and “Think Advertising as Experience.”

I’m not sure how fast will be the switch from packaged goods game sales to downloading, but I’m sure that Gamestop needs to do something to don’t get behind, the advise from a marketing perspective will be build a strong data base of your end users to create some loyalty with consumers, and when the downloading era come Gamestop will have a huge data base to exploit. In parallel Gamestop should invest in new ways of game delivering together with the big consoles companies, probably instead of a thread is a good opportunity to expand their business, at the end Gmestop once went to bankruptcy and they managed to move up to S&P 500, why not doing it again.

Perroton, let run with your dog

Last ccm class we talked about how much money people spend in their pets, the eccentricities go from special water for dogs to spas and expensive accessories, actually according to Business Week “Americans spend an astonishing $41 billion a year on their furry friends,” isn’t crazy?

This topic helps me to remember one of the best experiential marketing events I have ever seen, the “Perroton” in Spanish, probably the best translation to English is the “Dogathon.”

Perroton is an annual event in Mexico City sponsored by Purina, especially DogChow, the idea is to run together with your dog races from 1k, 3k, 5k. This obviously is not a competitive race, instead, is an event to hang out with your family and dog in Mexican streets, a good amount of owners bring their dogs in costumes and at some point it was more a dog fashion show than a race.

From my perspective this is a perfect 360 marketing campaign because it includes advertising via different marketing vehicles (print, tv, radio, online and billboards), PR before and after the race, and demand generation since the registration required each competitor to buy at least two bags of DowChow.

The first Perroton dragged more than 2,000 runners plus their dog, and probably another 4,000 visitors; there were hundreds of runners in the waiting list. The registration included a free check up for each dog, a nice runner T-shirt for the owner and some merchandising. The success has been so big that every year the number of runners increases, and now the Perroton is held in two more cities in the Country.

The Perroton was a huge success in terms of PR, all newspapers, magazines and channels were interested about the event, it was covered by different section within the newspaper, from sports events, to business and show business, everyone was very interested about this, actually Purina managed to have “Celebrities” running the race with their dogs.

Other way to advertise the event was by the newspaper man, in Mexico the newspaper is still sold in the streets between stop lights, so many newspaper sellers were dressed up with the Perroton T-shirt during the week before the event, so you can imagine all the buzz it generates specially the first one in 2007.

During the race family members were able to see the race, then take a photo and expend the rest of the evening with their family and dog in a public park.

DogChow in Mexico is always targeting owners who want athletic dogs, rather than Beneful, which targets owners that want to spoil their dogs, so this type of efforts allow the brand to create a better connection to its target audience moving from superficial messaging to experiential attraction.

Advertising = Retail, the Microsoft Retail Stores experience

Early this month I went to Oakbrook Center, in Chicago to check out the new Microsoft Retail Store, it was a Sunday on a very chili day, and Oakbrook Center is an outdoor mall, so I didn’t see a lot of consumers inside or outside the stores, but a saw a few of them inside the new Microsoft store.

The store looks very similar to an apple store just with more color, just reflecting Microsoft’s logo look and feel, even if the company is following Apple’s store strategy I really like it, and from a consumer perspective I like when companies appreciate the good taste of other companies and improve their status quo, in my opinion Microsoft wins because now they can compete in the retail store arena, Apple also wins because consumers will remember the Apple’s store, and consumers win because we have more options.

The store I visited has a similar size of a regular Apple store but with more products, this because Microsoft rely on its business partners to assort the store, so end users actually can see the best computer from HP, Vaio, Toshiba, Dell, etc, which for my perspective is an excellent value added for consumers, because probably will be a good destination to get an objective information of which computer is the best for each consumer needs, actually the computers are divided by user needs, instead of price.

The store also include a small area where consumers can look windows mobile phones, this area is the less visited from consumers. It also has a software printing station where consumers can go and chose whatever software application they want and print it right away.

The Microsoft store will boost peripheral market share for Microsoft, since they can display mouse, web cams, and different well design accessories that other retails don’t assort because of size constrains.

In terms of gaming it is clear that Microsoft continues to build on the Xbox brand, the store displays 2 Xbox 360 for consumers who wants to play, and one more with Kinect. I guess Microsoft wants to start the bond with its consumers at soon as possible, so this is a good way to stay close to kids, with the hope that they will embrace the brand in the future.

I am convinced that the Microsoft store is a marketing expense, and Microsoft is not looking it as revenue or profit generation, this is one more marketing tactic. The stores will give Microsoft some control of the messaging and positioning of their products that in this era is very difficult to manage, it is a good space to evangelists current and potential costumers and get face-to-face contact with consumers and learn from them, get fresh and direct feedback.

The potential challenges I see with the Microsoft stores are, first the investment to maintain the newest and hottest computers will be difficult, Apple can do so because Apple has only 4 or 5 SKUs compare with the 4 or 5 models from each manufacturer (around 25) and with different launching times, then building on this who will decide which computers will be display, probably the decision will drive some conflicts with its business partners, and what about the big retails such as Best Buy, how Microsoft will manage the relationship with them.

Only time will tell if the Microsoft Retail Stores is the right move.

P.S. Look at the video where Microsoft employees breaks out into song to attract more employees, I guess.

NBA fans closer to All-Star players

One of the toughest jobs for technology companies is to educate end-users in how new technology works, especially if is a breakthrough technology, this explains why Best Buy invest a huge amount of money in its Geek Squad, and how valuable this squad is for its customers.

With this in mind Cisco introduced its TelePresence technology throughout an innovative marketing experience execution.

TelePresence technology allowed NBA athletes and fans to interact “face-to-face” using Cisco’s videoconferecing/telepresence technology. Fans were able to interact with current NBA players and legends, throughout the All-start weekend via the Cisco TelePresence, this helped to transform the fan experience.

Having said that, technology companies are developing new ways to let consumers interact with its new technologies, understating that the best way to learn how a new technology works is by using it and playing with it.

My only concern with this effort is that Cisco TelePresence is a technology service targeted to business users rather than individuals, so I’m wondering how many people who had the opportunity to use the technology during the All-start weekend actually will buy one of this or could influence someone in their companies to acquire this product and service, at the same time probably Cisco see this effort as a PR tactic and not a way to interact with their potential consumers.

Here is the video, I hope you like it.

Pop-Tarts World

In a world where brands are trying to connect with its consumers by emotions and experiential marketing, Pop-Tarts world is one of the best examples of a success story.

In the summer of 2010, the iconic brand Pop-Tarts from Kellogg opened its Pop-tarts world in Times Squares at New York City, with the objective to strengthen its bond with consumers.

The Pop-Tarts world, with more than 3,000 feet, brought the brand to life; the space featured four main attractions:

·      The “Varietizer” to build your own Pop-Tarts  

·      Pop-Tarts World Café a counter service restaurant

·      Make-your-own T-shirt station

·      Interactive media area, to log on facebook and tell everybody that you are in Pop-Tarts world.

The best part of the Pop-Tarts world was that it had so much impact on the press that covers the event, that this became a great vehicle to get free advertising on magazines, news channels and newspaper across the country, and helped the brand to build credibility around its messages.

The attraction most commented by the news was the original creation of “Pop-Tarts Sushi,” and actually I would like to try it.

Consumers that went to Pop-Tarts world will embrace the brand in the future and will remember it forever, this type of execution connects the brand emotionally to people, and captured people attention by creating a more experiential relationship with the brand.

Finally, for all of us that don’t live in NYC, the company also developed poptartsworld.com where visitors can buy appeal, kitchen & home appliances, and accessories portraying the pop-tart brand to strength the bond with its customers.

Your mom is gonna hate it

The other day, I wrote about how Axe with its sexiest ads attracts its target audience in a very direct way, and most of its consumers become “fans” of the brand and embrace it, while the ad also alienates a lot of consumers that find the ads of bad taste and even disrespectful.

While writing that post I kept remembering a Sony Playstation commercial, since the ad really impacted me, I surf the web to find it, the game is “Dead Space 2,” is a survival horror third-person shooter video game developed by Visceral Games and published by Electronics Arts for PlayStation, Xbox and Microsoft Windows. Although, I link the ad only with Playstation because it ends with a signature id from only this company, probably a good topic for my next blog.

But why the advertising campaign stands out? With the idea that mom’s disapproval as always been an accurate parameter of what is cool, over 200 middle-age conservative women were selected for a “focus group study,” during the focus group the women were exposed to the violent video game scenes, and their reactions, emotions and opinions were video recorded, as you can expect their reactions were from nervous and stressful to almost crying, some were disgusted, shocked, other couldn’t believe what they have seen, and every single mom hated it. 

Here the behind-the-scenes.

During the ad several reactions of the women are showed, while the voice-in-of states how violent the game is and the reasons why you will love it. The ad ends with “your mom is gonna hate it.” They even have a web page YourMomHatesThis.com where you can see the actual focus group of several “moms” each reacting in a very negatively way without editing. 

Here the ad.

The game is M rated and only 17+ can purchase it, and I’m sure its target audience goes above and below that age, I’m sure that most of them will like it and found it interesting, as oppose to their moms. I’m not sure if the sales of the game will increase with this specific advertising campaign, but I’m sure most people out of the target will find it interesting and will try to find more about it, in this sense the game is attracting to new potential consumers and leverages on a great insight that whatever mom approves is not for you.