Sunday, July 2, 2017

New Buying Habits Are More Important Than Technology

Consumer-buying-habitsMany entrepreneurs think that adapting to the new technologies, like smart phones and Internet commerce, are the key to attracting new customers. In fact, businesses need to adapt even more completely to the changes in the buying and social behavior of consumers. High-technology product startups, without customers, don’t make a business.

Today’s customer buying dynamics are all about “user experience,” according to Brian Solis, in his classic book “What’s the Future of Business?”. This thought leader in new media asserts that every business needs to understand social psychology and rethink their business models, approach, and relationships in order to create unique and memorable experiences for both customers and employees.

Solis outlines the heuristics of social psychology that are key to building positive customer experiences today. These begin with the following Cialdini’s Six Principles of Influence, which consumers use to make decisions, buttressed by results from various social media surveys he references in the book:

  1. Social proof – follow the crowd. During today’s dynamic customer journey, consumers often find themselves at a point of indecision. When uncertain of what to do next, social proof kicks in to see what others are doing, or have done. Survey results show that more than 80% of consumers now receive advice through social networking sites prior to a product purchase.

  2. Authority – the guiding light. Perceived authorities guide decision making, by investing time, resources, and activity in earning a position of influence, leading to a community of loyalists who follow their recommendations. Most consumers now research online product reviews, blogs, YouTube, Twitter, and Facebook, for authoritative guidance.

  3. Scarcity – less is more. Greater value is assigned to the resources that are, or are perceived to be, less available. Driven by the fear of loss or the stature of self-expression, consumers are driven by the ability to participate as members in exclusive deals. 3 out of 4 people like getting exclusive offers that they can redeem via Facebook or other sites.

  4. Liking – builds bonds and trust. There is one old saying in business that is still very true in this age of social media: People do business with people they like. We all have a natural inclination to emulate those we like and admire. Almost 50% of shoppers surveyed admitted to making at least one purchase based on a social media friend recommendation.

  5. Consistency. When faced with uncertainty, consumers tend not to take risks. Rather, they prefer to stay consistent with beliefs or past behavior. When these do not line up in the decision-making cycle, consumers feel true psychological discomfort. The result is that over 60% of online shoppers are brand loyal due to other online satisfaction data.

  6. Reciprocity – pay it forward. Perhaps the greatest asset in social capital is that of benevolence. We have an innate desire to repay favors in order to maintain social fairness, whether those favors were invited or not. Every month, over 25 billion pieces of content are shared on Facebook alone, with a major portion oriented toward reciprocity.

Social psychology in general deals with how individuals relate to one another. In today’s social networks, the social economy is defined by how people earn and spend social capital. Based on the commerce of actions, words, and intentions (or actions, reactions, and transaction), people build their own standing. Startups earn relationships and resulting stature the same way.

Another aspect of the social psychology of consumer buying today is the four stages where customers take actions that move them toward you or away from your startup. These are sometimes called the four moments of truth:

  • Zero Moment of Truth. The few moments before people buy, where impressions are formed and the path to purchase begins. It is that moment when consumers grab their laptop or mobile phone, and start learning about a product or service.
  • First Moment of Truth. This is what people think when they see your product and it’s the impressions they form when they read the words describing your product.
  • Second Moment of Truth. It’s what people feel, think, see, hear, touch, smell, and (sometimes) taste as they experience your product over time. It’s also how your company supports them in their efforts throughout the relationship.
  • Ultimate Moment of Truth. It’s that shared moment at every step of the experience that becomes the next person’s Zero Moment of Truth. This one is required to generating word of mouth, advocacy, and influence.

So for all you technologists, who routinely focus their resources on a great product (“if we build it, they will come”), it’s time to balance the business success equation. Learning how to craft and nurture great customer experiences around your product is critical. The future of your business these days depends on it.

Marty Zwilling

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1 comment:

  1. Well, users' behavior has been changing and it is important to understand their options.

    Users and companies have been changing their behavior/strategies towards mobile apps and social media, in prejudice of websites.

    Social media is becoming increasingly important (some companies are not even bothering to build a website). Today, nearly 80% of business have a dedicated team, social media is now a standard operating procedure.

    Sports stars, like Lionel Messi, Kobe Bryant and Cristiano Ronaldo, have left websites almost completely and are engaging with their fans via Instagram, Facebook and Twitter. The website they own is not devoted to the player itself or to sell products, but as a place to promote their social media profiles.

    An interesting example is obsessee.com. obsessee.com has as its only function to connect to their various social media profiles. And there are other examples of brands that only exist solely on social media.

    There are more than one million apps in major app stores, something like an app for any circumstance in our life. In the scientific literature, there are evidences that users prefer to use Mobile Applications instead of web browsing, and stores which have an app have more chances of selling their products than those who do not (Kang, Mun, & Johnson, 2015).

    This evidence suggests a change in users’ behavior and companies’ strategy towards Websites, influenced by the increasing use of Social Media and Mobile Apps.

    As an expert, what do you think about this?
    Why do you think users are changing their behavior?
    Can you imagine this a problem to the future of websites due to its (probable) decreasing use?

    ReplyDelete