October 02, 2010

Sales Funnel Dies The sales funnel, the oldest, most illustrated and beloved marketing paradigm passed away today of old age. Originally, constructed to approximate the rational buying sequence for B2C and B2B customers, the Funnel leaves no immediate heirs. Shopping was never really linear. Prospects take multi-directional, multi-dimensional and idiosyncratic paths to surface needs, identify buying criteria, list potential solutions and fall in love and purchase. Easy digital access to product information, testimonials, video demonstrations, user-generated or professional reviews, peer opinions and comparative pricing tools creates a more dynamic, unpredictable and emotional landscape than the Funnel ever portrayed. The implications for marketers and merchants are that marketing strategy, messaging and media must shift. The number of inflection points has multiplied. Rather than aim messages or media units at a particular point in a reasonably predictable cycle, marketers now have to array their brands in ways to cover a much larger, expanding and morphing digital Main Street or mall and interact rather than interrupt. A shift in consumer behavior to digital channels was documented in a recent study of more than 2000 US shoppers, titled “2010 New Shopper Journeys Survey,” conducted by Carat and Microsoft Advertising The two big take-aways are 1. Brands have to engage customers across 3 or more screens. During a buying cycle and use each channel and each digital meme to its best advantage. Brands will meet customers in several settings during the purchase time frame so that specific aspects of the brand story and value proposition can be parsed through specific digital assets. 2. It’s Not Over with a Purchase. Customers almost instinctively use digital and social media to share and validate their purchases, review and recommend products, comment on customer service and plan subsequent shopping expeditions. In the survey, 48% of responders recommended a brand by name and 30% recommended a retailer. And while this fundamental behavior has always been true, technology accelerates the speed and scale to increase the impact on future sales. The Funnel is dead. Customer behavior is in-flux. The search for a new paradigm has begun.
Is Marketing Research All Wrong? Marketing research as always relied on psychological concepts, theoretical constructs and interview and survey techniques widely considered as surrogates for reality. Billions in ad campaigns have been committed on the basis of the results unearthed. Yet, in his forthcoming book Consumer.ology: The Market Research Myth, Philip Graves, a consumer behavior consultant, trashes long-standing marketing research techniques and offers four alternative ways to better understand and predict consumer behavior. His central argument is that we are measuring the wrong thing, at the wrong time with the wrong people. He insists that awareness, desire, preference and choice are functions of the unconscious mind rather than a rational process. For Graves branding is about emotional imprinting and logical short-cuts. “Our reliance on brands … is a pragmatic system of packaging up product associations into an unconsciously identifiable device that removes the need to make complex, long-winded conscious evaluations of alternatives every time we purchase something.” He doesn’t think consumers know what they want and clearly believes that they can’t articulate what they want or why they want it. He suggests we stop asking because the output is useless. “If human beings were routinely capable of such accurate introspection, psychoanalysts could be replaced by a two line computer program.” He indicts market researchers for asking questions out of context, for talking to the wrong audiences, for ignoring behavior in favor of opinion and for generally missing the mark. “Our unconscious minds have vast amounts of data that we regularly rely on to make decisions, but we have no direct conscious access to those processes, “ he argues. Graves argument boils down to several key points …. Decision-making is unconscious and we can’t really get inside consumer’s heads. Anything consumers tell us is a post-action rationalization or re-interpretation of events they themselves cannot fully understand or explain Just asking the questions, changes the answers Buying is done emotionally, in-the-moment and we don’t have the tools to simulate or even understand the mechanics This moment is affected by a wide range of variables (e.g. people present, environment, stimuli) which make tracking it or generalizing about it almost impossible So like a direct marketer, he believes that observed behavior yields a more potent insight that the full range of current marketing research techniques. “When market research wanders into the realm of the future, it is inherently reckless.” He takes a strong obligatory shot at focus groups concluding that “if accurate consumer insights is the objective, and then by far the simplest ‘solution’ is to avoid focus groups altogether.” Graves’ solution to understanding consumers better is four-fold. Mount “cost effective yet meaningful live tests” Give up market research as a CYA risk or blame mitigation tool Go with your gut Measure any consumer research or insights against 5 criteria expressed as the acronym – AFECT. Analysis of consumer behavior; hard data. Frame of mind; context. Environment; the range of potential stimuli Covert study; disguise the real topic when engaging consumers Timeframe; recognizing the snap judgment ala Gladwell’s blink hypothesis This is an annoying, eye-opening, thoroughly researched and tightly argued book. It will alarm some, enrage others and state the obvious for many. The outstanding question is; will it prompt change? ________________________________________________ Full disclosure: I got a free review copy from the publisher. Want it? Be the first to ping me.

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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