Are you focusing your marketing efforts on too many marketing ideas at the wrong place and the wrong time? Research on how customers make buying decisions in the McKinsey Quarterly says you may be. If you’re a geek like me and want to read the whole study, it’s fascinating. If not, here’s what you need to know as a small business owner.
Over the years, how customers make buying decisions has changed dramatically.
Customers used to start with an ‘evoked set’ or consideration set of businesses they had heard of. That’s why it was important to be everywhere your budget would allow – tv, radio, newspaper, etc. You needed to be thought of when someone realized they had a need for what your business sells.
From there, customers whittled down that original consideration set by doing research – visiting stores, reading reviews, asking friends, etc. If you didn’t make it into that initial consideration set, your chances of getting a new customer was nil.
Now, however, customers make buying decisions a bit differently. While they do still start with that original consideration set, instead of whittling down that list, it actually grows when they start evaluating their choices. If they read a review or hear from a peer about a product or service that wasn’t in their initial set of choices, they’ll add it to the list of potential businesses to invest with. Many are delaying purchase decisions until they walk into the business, rather than knowing exactly what brand or product they will purchase when they walk in the door.
What this means for small business owners is that it’s increasingly important to turn your existing clients into evangelists for your business. Rather than focusing all your marketing efforts on being everywhere so that potential clients are exposed to you and think of your business when they have a need, instead focus on keeping existing clients spreading the word.
Here are a few tips to put your marketing efforts where they will deliver for you (and many are free or inexpensive).
1) Reinforce the customer’s purchase decision at an unexpected time – the research by McKinsey shows that consumers actually are more open to developing deeper connections with a business AFTER they have purchased. After their purchase they question themselves and start doing more research. “Did I choose the right photographer? Did I purchase the right car? Was there something better out there for me?”
The larger the purchase, the more buyer’s remorse they may feel. So while you think your work is done after the sale has been made, there is a huge opportunity for you to keep your customers talking about you months after the sale and to reinforce that they made the right decision. Send a personal, hand-written thank you note within 2 weeks after their purchase. Then, gift the client with a product or service that showcases what you do at an unexpected time (note cards with a favorite image from the session if you are a photographer, a free spa service if you are a spa, a car wash and detail if you are a car dealer). The ideal time for this reinforcement depends on your sales cycle, but if you have a business that sees clients once or twice a year, the idea time is 3 or 6 months after the purchase. Work this expense into your marketing budget. It will pay off far more than your traditional marketing efforts.
2) Customers will post reviews online and share in social networks about their experience with your small business (whether positive or negative). But they are busy. Just because they don’t do it automatically doesn’t mean they don’t love you. When customers are sent a follow up email post-purchase asking them to review their experience on a site like Google Places, Yelp, Amazon.com, etc. they actually do it. Don’t be afraid to ask. These reviews help you tremendously in getting future customers and in SEO.
3) Consider a formal referral program. When you have a client who is thrilled with what you do or is very connected with others who would be ideal clients, arm them with materials to spread the word. Be sure to make it convenient for them (i.e. don’t give them a folder of materials that they’ll never be able to carry in their purse). A great book on generating referrals is The Referral Engine: Teaching Your Business to Market Itself by John Jantsch. We interviewed John for Cafe Joy and he shared so many good tips. The book is definitely worth $15.
The research is there. Customers have changed the way they make purchase decisions. Don’t fret about the size of your marketing budget. Instead do what you can do to reach potential clients at the places where they are getting serious about making a purchase decision.