Understanding the Shopper Economy
As every marketer knows, today's consumer is more connected and informed than ever before. The trick is to make that work to the marketer's advantage. Liz Crawford, a senior industry analyst at the Path to Purchase Institute, shows readers how to motivate shoppers and leverage the new shopper currency—behavior—in her new book, The Shopper Economy. Associate Editor Judith Aquino caught up with Crawford to find out how companies can ramp up their marketing efforts just in time for the holidays.
CRM: What can marketers do to stand out in the shopping frenzy and build their customer base?
Liz Crawford: The key question from a shopper's perspective is "What will I get if I buy from you?" Shoppers will be looking for great selections and doing price comparisons, but they will also be looking at the transaction behind the transaction. What this means is savvy shoppers will be evaluating the return on their purchasing behavior.
American Express, for example, offers reward points for shopping in its digital mall. They're offering something in exchange for buying this way. Shoppers will compare this to the value of buying the same item in a brick-and-mortar mall. Retailers will be competing on the level of perceived value. Also, the more versatile the redemption of that value add, the more perceived value it has for shoppers.
A 20 percent discount on a designated product is perceived as less valuable, for example, than the equivalent if it is redeemable across channels. The more flexibility you give shoppers and how they can redeem it, [the more it] causes [the value] to go way up in their minds.
CRM: You noted in your book that the best brand advocates are not necessarily the same as heavy buyers. How can marketers apply that knowledge to their campaigns?
Crawford: I would run a quick test to see who are my heaviest buyers and who are my heaviest advocates and then ask myself, how can I market to these groups differently? What is most important to a heavy buyer and what is most important to an advocate? Segment these groups clearly so that you can effectively incentivize them.
The holidays are an advantageous time to do this. It's a great opportunity to put your advocates to work with something like a Groupon, where a person gets rewarded for recruiting three more buyers. For heavy buyers, you could tell them that if they buy now they will receive special privileges or special access to certain products throughout the year.
CRM: What's a common mistake that retailers make?
Crawford: There seems to be a lack of brands that are portrayed in a seamless way. What I often see is brands have an in-store effort that is handled by some people, a digital effort that's handled by other people, and a traditional media effort that is handled by yet another group, and [it's hoped] that they all fit together.
There's a lot of fragmentation going on now. This presents an opportunity for someone to say,"I'm going to assign someone to be the shopper and simply report on how [he or she] experiences the brand…to make sure we don't have four different brand personalities at work here." If you're constructing 360-degree experiences, someone has to wade through [them] experientially and make sure [they're] cogent.
CRM: What trends do you see in incentivized participation as a marketing technique?
Crawford: In terms of the shopping economy, incentivized participation is becoming more important for marketers because there are only so many shares of attention and interaction that any brand can get. To compete for [shoppers'] time, we need to make sure it's worth their while. I think we'll see a relationship between retailers and mobile games like Angry Birds, which will involve more products as marketers become more sophisticated. I think the equation of "What's worth my time?" and "What incentives do I get for participating?" will get more refined and also more branded.
CRM: What do you want readers to come away with from your book?
Crawford: Remember that it's not just about selection and price. The type of transaction with consumers where they're wondering, "What am I going to get and what kind of relationship do I have with your brand?"…[needs] to be a regular part of the marketer's thought process and strategy. From the shoppers' perspective, if they can get something for a certain type of behavior, they'll take advantage of it. People are on the hunt. There is a market demand for this kind of value, and competing on the transaction behind the transaction will become the difference between having an edge in the marketplace or not.
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