Marketing Viewpoint by Ruth Winett
What Are Your Customers Doing at the "Moment of Choice"?
Have you ever surveyed customers about their purchase intentions and then wondered if you had learned anything useful? Too often, market studies focus on customer demographics or purchase intentions without identifying how customers actually behave when they are making purchase decisions. Companies can achieve growth through identifying demand factors "at the moment of choice," according to the Boston Consulting Group (BCG). Demand factors are factors that drive decisions whether or not to purchase goods or services. Understanding demand factors helps companies achieve Demand Centric Growth (DCG).
Focus on Demand Factors
Through focusing on demand factors, companies can avoid pitfalls, such as making decisions because of supposed trends, says the BCG. [Trends may not be real, and by definition trends inevitably end.] Another pitfall is segmenting customers according to demographic criteria. Clearly, not all retirees or CEOs or millennials are the same. Consequently, realtors cannot assume that all millennials want to own houses in suburbia.
Besides basing product development and marketing decisions on who their customers are, companies must also know what their customers want and need, where they are while deciding, and what they are doing when they make purchase decisions. Companies also need to know what customers are feeling when deciding whether to choose a product or service. For instance, business people think, feel, and behave in different ways when choosing a hotel for a business trip to London as opposed to a hotel for a family vacation in Walt Disney World.
Some of the benefits of finding out how customers behave during the "moment of choice" include finding overlooked behaviors and drivers of decisions; developing a more realistic picture of the competition; and identifying new opportunities that competitors have not yet discovered. Moreover, having demand information encourages planning and strategizing across the company and not just within departments, according to BCG.
Demographic information is the easiest customer and prospect information to obtain, but it is not necessarily the most useful information. Companies grow by figuring out what is going on with their customers and prospects while they are making purchase decisions. These insights lead to demand centric growth. Information about the "moment of decision" is useful in many types of organizations, whether product or service, B2B or B2C, or whether for profit or not for profit. This approach helps organizations progress from insight to strategy to action. Ideally, it combines qualitative research (interviews and focus groups) and quantitative research (surveys), the BCG concludes.
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