Understanding the individual nature of customers is fundamental to marketing practice and planning. In Chapter 4 you can read about segmentation approaches and how they can be used successfully as part of an integrated marketing strategy. In this section we explore the actual consumer behaviour variables which help build segmentation profiles.
Research has identified that there are many factors which influence online behaviour (Keen et al. , 2004) and over time the market segments that use the Internet and digital services has changed significantly, so it is important for digital markets (a) to be aware of important behaviour variables, and (b) to understand how to model online consumer behaviour.
According to Doherty and Ellis-Chadwick (2010), it is possible to look back and see that the types of individuals using the web have changed significantly since 1995. In those early days, online shoppers tended to be young males, who were generally better educated and wealthier than their contemporaries. They also had both the confidence and desire to experiment with the Internet, which at the time was an exciting new channel (Donthu and Garcia, 1999; Korgaonkar and Wolin, 1999). Some companies specifically targeted these types of customers and developed services to suit their needs. Research suggests there are two key areas which can prove very fruitful when aiming to identify consumer variables:
1 Demographic variables . Doherty and Ellis-Chadwick (2010) suggest that any personal attributes that tend to remain static throughout an individual’s lifetime, or evolve slowly over time – such as age, gender, race etc. – can be defined as demographic variables . Key elements of a consumer’s demographic profile that have been found to influence online behaviour include variables such as income, education, race, age (Hoffman et al. , 2000);
gender (Slyke, 2002); and life-style (Brengman et al. , 2005), cultural and social make-up that influences online behaviour (e.g. Shiu and Dawson, 2004).
2 Psychographic and behavioural variables . Any aspect of a consumer’s perceptions, beliefs and attitudes that might influence online behaviour, and in particular a consumer’s inten- tion to shop, can be defined as a psychographic/behavioural variable . Indeed, there has now been a significant amount of research exploring how the consumer’s character or personality might influence their online behaviour (George, 2004). Cheung et al . (2005) suggest that the impact of a wide range of behavioural characteristics, such as knowl- edge, attitude, innovativeness and risk aversion, can have a significant effect on a consum- er’s intention to shop. For example, it has been found that consumers who are primarily motivated by convenience were more likely to make purchases online, while those who value social interactions were found to be less interested (Swaminathan et al ., 1999).
Online consumer behaviour and implications for marketing
By studying the variables which influence the consumer’s experiences in the online environment ‘it becomes possible to analyse their future intentions to continue to use digi- tal services and to shop online’ (Wolfinbarger and Gilly, 2003). For example, the impact of consumers’ personal experiences of, say, convenience, site design and security might affect their overall satisfaction with a particular website. Another important point is that by studying variables associated with a consumer’s experiences, digital marketers begin to understand how to increase loyalty and trust through websites and online services. As use of the digital environment has grown, further research has been carried out which gives us an even greater understanding of the online customer experience.
According to Rose and Hair (2011) ‘customer interactions with an organisation’s web- site creates opportunities for positive experiences that can lead to long-term relationship building’.
The concept of online customer experience has been widely studied in contexts rang- ing from service delivery to retailing and tourism (e.g., Arnold et al., 2005; Tsai, 2005).
Figure 2.13 shows a framework for understanding the concepts which motivate and influ- ence the online consumer. An important point to consider is that past experiences will provide the basis for future evaluations. According to Arnold et al. (2005), the antecedents or background to the online experience consist of an important list of concepts which can positively or negatively influence or motivate the consumer to engage with a digital offer:
1 Information processing (IP) is very important as it shapes how a consumer deals with available data and information that will influence their future behaviour. IP involves the mental processes and senses an individual uses to interpret the world they inhabit.
2 Perceived ease of use also needs consideration by digital marketers, as the easier a web- site or mobile site is to use the more likely a customer will have a positive online experi- ence (Cheung et al., 2005).
3 Perceived usefulness refers to the extent to which the digital offer fits with the customer’s daily life, for instance, shopping, booking train tickets, banking (Arnold et al., 2005). It is here that digital marketers can really start to develop a path to consumer benefits.
4 Perceived benefits: if a customer feels they will be rewarded in some positive way by engaging with a digital offer this is likely to generate support for an online brand (Arnold et al., 2005).
5 Perceived control: if a customer is a skilled user of the digital technology in question then they will feel they are able to function successfully in this environment. Earlier in
• Information processing
• Perceived ease- of-use
• Perceived usefulness
• Perceived benefits
• Perceived control
• Skill
• Trust propensity
• Perceived risk
• Enjoyment
Consequence
• Re-purchase intention Antecedents
• Customer satisfaction
Consequence
• Cognitive state
• Affective state Experience
Framework for understanding online customer experiences
Source: Rose and Hair (2011)
Figure 2.13
the chapter we discussed how some mobile shoppers are confident whereas others are not (see Digital marketing insight 2.3).
6 Skill refers to the customer’s ability to use the technology to achieve their desired goals (Klein and Ford, 2002). It has been found that individuals learn by doing in the Internet environment and so build their skill set over time – e.g. the more frequent the visitor to a website the higher their exposure and the greater their ability to engage with this digital content.
7 Trust and risk play an important role in how a customer behaves online. Inexperi- enced Internet users can feel vulnerable and fear the unknown (Tan and Sutherland, 2004). Customers should be able to achieve their buying goals without feeling they are exposed to undue risk – e.g. financial risk, social risk, personal risk. Marketers should seek to find ways to limit the risk of engaging with their online offer and seek to build trust through developing online relationships.
8 Enjoyment is an outcome of a positive online experience.
A digital marketer should consider how each of these antecedents can influence a cus- tomer’s motivations to engage with the digital offer and also look for opportunities to cre- ate competitive advantage by overcoming potential barriers. These eight antecedents can influence how the customer thinks (cognitive state) and feels (affective state) about their online experience and affect the outcomes of any subsequent behaviour. If the customer has a positive experience this will increase the likelihood of the customer being satisfied and having positive repurchase intentions. Arnold et al. (2005) propose that digital market- ers need to be aware that it is important not only to develop the functional aspects of an online offer (e.g. website) but also to consider how the emotional state and past experi- ences of the customer can affect customers’ levels of engagement.
Consumers on and offline are largely similar (Jaywardhena et al., 2007) and therefore it is important for digital marketers to consider the Internet as an extension of an existing business. In the case of new pureplay businesses it is also important to understand the offline as well as the online world because the physical world will inform behaviour in the digital world regardless of where a business operates. There are many ways to define customers in the digital marketplace: for example, Green (2013) identified the avid shopper, early adopters of the Internet and savvy online buyers, who know where to shop for the best deals (friends often refer to them as shopaholics); the emotional shopper, who buys when emotional triggers – stress, boredom, upset – prompt them to seek gratification, which they do by going to buy online. The impulse buyer sees a deal and buys it. Retailers across the Internet have picked up on this type of buyer and often list ‘other items you might be interested in’.
Business buyers are also individuals, who work within a corporate framework, so many of the functional and emotional triggers which influence online consumer behav- iour apply. But just as with consumers, B2B buyers are influenced by the physical cir- cumstances they work in. Business buying tends to be done by a decision-making unit (DMU), which means the purchase decision is likely to be more complex than a con- sumer purchase (Hague, 2014). Business buyers are knowledgeable and focus their attention on price and value, so selling organisations not only need to consider the B2B buyers as individuals but also to focus on their buying objects and touch the ‘hot butting of all decision makers’ (Hague, 2014).
Looking at the characteristics of buyers and target segments is part of well- established traditional marketing practices. Online marketers use these techniques but have also taken them to a new level and in doing so have developed a way to better understand a target audience by building consumer personas.
Online segments Digital marketing insight 2.5
Consumer personas
A persona is a fictional profile typically informed by research that represents a particu- lar target audience. Personas are a tool which can help in understanding online customer characteristics and behaviour. Creating personas is a powerful technique for developing customer-centred online strategies, company presences and campaigns and forms part of marketplace analysis.
They have been used for a long time in research for segmentation and advertising, but in recent years have also proved effective for improving website design by companies that have applied the technique.
For an example of the application of personas, see Mini case study 2.1.
Marketers can also develop secondary personas and complementary personas to provide a fuller range of options.
The buying process
According to Kotler et al. (2001), there are different stages in the buying process. At each stage the purpose (from both the buyer’s and supplier’s perspective) is a particular outcome:
● awareness;
● interest;
Personas A fictional profile that represents a particular target audience. A thumbnail summary of the characteristics, needs, motivations and environment of typical website users.
Customer scenarios (online customer journeys) Alternative tasks or outcomes required by a customer. Typically accomplished in a series of stages or different tasks involving different information needs across different sites and platforms.
Personas ‘with wings’
Mini case study 2.1
AMP is a marketing agency which offers a full suite of services from brands wishing to communicate in the digital marketplace. They use customer personas as a way of developing understanding of their clients target audiences. They use the persona to create a visual and contextual representation of the target audience, us- ing demographics and psychographics. In building this representation AMP also look at the use of social me- dia and technology, which gives an understanding of the likely touchpoints the target audience will encounter.
According to Stokes (2015), the Red Bull Student persona is:
● ‘The thrill seeker’
● He’s 24 years old
● Graduated from college, 2 years ago with an English degree
● He is currently the assistant manager at a ski & board shop
● He makes £$30,000 a year.
● Whether it’s jumping over cliffs into powder snow on a snowboard, racing down treacherous trails on a mountain bike or hitting the half-pike skateboard, he’s there because he’s a daredevil. He welcomes the new experiences and loves taking risks with adventurous activities like skydiving and windsurfing. He likes to live a fast-paced life existence and he’s always on the go. No matter how daring the challenge, he will always be there with a Red Bull in hand, on high energy and ready to jump.
By developing a persona using data from a number of different variables it should become possible for marketers who are developing digital campaigns to begin to empathise with a particular target audience and develop digital campaigns which not only attract but also meet the needs of the audience as well as deliver- ing benefits for engaging with the campaign, thereby creating a win–win outcome for the company and its customers.
Additionally customer scenarios (online customer journeys) can be developed for different personas which describe their overall online customer journeys. Seybold and Marshak (2001) originally described such journeys as:
A customer scenario is a set of tasks that a particular customer wants or needs to do in order to accom- plish his or her desired outcome.
● evaluation;
● trial;
● adoption.
This set of outcomes, sometimes known as the hierarchy of response model, have been considered in the digital market. Chaffey and Smith (2012) describe them as:
1 problem recognition;
2 information search;
3 evaluation;
4 decision;
5 action (sale or use of online service);
6 post-purchase.
Customer scenarios can be developed for each persona. For an online bank, scenarios might include:
● new customer opening an online account;
● existing customer transferring an account online;
● existing customer finding an additional product.
The customer persona/scenario approach has the following benefits:
● fosters customer-centricity;
● identifies detailed information needs and steps required by customers;
● can be used to test existing website designs or prototypes and to devise new designs;
● can be used to compare and test the strength and clarity of communication of proposition on different websites;
● can be linked to specific marketing outcomes required by site owners.
Here are some guidelines and ideas on what can be included when developing a persona. The start or end point is to give each persona a name.
1 Build personal attributes into personas:
● demographic – age, sex, education, occupation and, for B2B, company size, position in buying unit;
● psychographic – goals, tasks, motivation;
● webographics – web experience (months), usage location (home or work), usage platform (dial-up, broadband), usage frequency, favourite sites.
2 Remember that personas are only models of characteristics and environment:
● design targets;
● stereotypes;
● three or four usually suffice to improve general usability, but more may be needed for specific behaviours;
● choose one primary persona whom, if satisfied, means others are likely to be satisfied.
3 Different scenarios can be developed for each persona, as explained further below. Write three or four, for example:
● information-seeking scenario (leads to site registration);
● purchase scenario – new customer (leads to sale);
● purchase scenario – existing customer (leads to sale).
Once different personas have been developed that are representative of key site-visitor types or customer types, a primary persona is sometimes identified. Wodtke (2002) says:
Your primary persona needs to be a common user type who is both important to the business success of the product and needy from a design point of view – in other words, a beginner user or a technologically challenged one.
Figure 2.14 gives a summary of how digital media can be used to support the different stages in the buying process. The boxes on the left show the typical stages that a new pros- pect passes through, according to, for example, Robinson et al. (1967). A similar analysis was performed by Berthon et al. (1998), who speculated that the relative communications effectiveness of using a website in this process gradually increased from 1 to 6.
It is worthwhile reviewing each of the stages in the buying process referred to in Figure 2.14 in order to highlight how effective the Internet can be when used at different stages to support the marketing communications objectives. Of course, the exact stage of the buying decision varies for different products and different types of customers, so an alternative approach is to develop channel chains (Figure 2.23 below), which reflect these differences. In general, digital media support the consumer buying process as follows.
1 Consumer: unaware. Company: generates awareness (of need, product or service)
Generating awareness of need is conventionally achieved principally through the mass media used in offline advertising. The Internet is relatively ineffective at this since it tends to have a more limited impact and reach than television, radio or print media.
However, display advertising or paid search marketing can be used to supplement offline awareness-building, as explained in Chapter 8. Online equivalents of word-of-mouth or
Communications objectives Stage in
buying process Digital marketing
techniques
Display and PPC ads, E-PR, social recommendations Generate
awareness
Search engine marketing (SEO and PPC), affiliate marketing Position features,
benefits and brand 1 Unaware
Aggregators, directories and other intermediaries Lead generation
(from range of customers)
Faceted search, buyers’
guides, detailed product info, user reviews and ratings Assist purchase
decision
Automated e-mail reminders, one-page payment systems, offline options Facilitate purchase
Personalised website content and
interaction Support use and
retain business 2 Aware of product
need, develop specification
3 Supplier search
4 Evaluate and select
5 Purchase
6 Post-purchase evaluation and feedback
A summary of how digital media can impact on the buying process for a new purchaser
Figure 2.14
Initial product search showing e-retailers available
Source: Google (2015)
Figure 2.15
recommendations from friends or colleagues, perhaps influenced by a viral marketing campaign, can also create awareness of need. Some companies have effectively developed brand awareness by means of PR and media mentions concerning their success on the Internet, with the result that even if a customer does not have a current need for a product, that customer may be aware of the source when the need develops.
2 Consumer: aware of need, develops specification. Company:
position features, benefits and brand
Once a consumer is aware of a need and is considering what features and benefits are required from a product or online service, then they may turn straight to the web to start identifying the range of features available from a particular type of product through using a generic search using search engines such as Google or Yahoo! So influencing consumers through search engine marketing and affiliate marketing is important at this stage. Specifi- cation development effectively happens at the same time as supplier search and more sup- pliers can be evaluated in greater depth than traditionally. For example, Figure 2.15 shows the e-retailers available in an initial product search on fridges. Retailers such as John Lewis and Currys are displayed in the natural listings (see Chapter 8), while others such as AO.
com and Euronics are displayed in Google AdWords. The image-based ads are known as Product Listing Ads (PLAs).
Intermediaries well known within a sector, such as Kelkoo (www.kelkoo.com), can be important in supplier search and can also help in evaluation. However, they are less dominant than they were with changes in the way that sites are ranked. For example, aggregators or comparison review sites appear in Figure 2.15. It can be difficult for these aggregators or manufacturers to afford to feature high in the paid listings. On the web, if companies have the right permission marketing incentives described in Chapter 6, such as an opt-in e-newsletter or coupon discount, then they may effectively gain interest earlier in the lifecycle in comparison with traditional channels.