By Dave Hadaway
"A lot of times, people don't know what they want until you show it to them." - Steve Jobs, Business Week, Oct. 12, 2004
Relying on online searches and Search Engine Optimization for sales has become an important, and in many cases, the primary strategy for many of today's marketers. There's one big problem with this approach. A search engine marketing strategy assumes that consumers only buy what they know they want.
As I remember WAY back in my Marketing classes in the 80's, I recall a chapter on Wants versus Needs. It was right after the Chapter on the 4 P's (Price, Product, Placement, Place)! In the Wants versus Needs chapter, the author described the importance of uncovering wants that people were unaware of--- impulse purchases. At that time, depending on the industry, impulse purchases made up 40% or higher of the overall sales in some establishments.
As a personal example, while driving out and about one Saturday afternoon in my youth, I whipped into a car dealership and rode out a couple of hours later with a new car. Another time, I walked into Circuit City to meet a friend for lunch and walked out with $1,000 in stereo equipment. In fact, just yesterday, I was searching for a lacrosse helmet for my son. I found one online for $100, but I decided to run by our local Play-It-Again Sports franchise to see what they had. I walked out with almost $200 worth of lacrosse gear including the helmet -- which is all we REALLY needed.
Another great example of showing customers what they don't know they want is the impulse aisle at major retailers and grocery chains. If I let them, my kids would spend their entire allowance on all the candy and gum they could sneak into my buggy while I'm digging my debit card out at the Wal-Mart register.
Back in college, one of my professors, best-selling author Thomas Stanley, theorized that the success of the U.S. economy versus India, China, and any of the European countries was dependent on Industrial Marketers uncovering the unknown wants of the U.S. consumer. In other words, our GDP growth was as a result of our consumers buying more than what they needed.
So, how does this affect you as a marketer? First, you need to know the attitudes and behaviors of your customers. Just knowing what they bought in your store in the past 6 months is not enough. You need to know what they DIDN'T buy in your store. There is a plethora of buyer and online behavior available that can tell you about your customers buying behavior including what they are buying, when they are buying it, how often and how much. Also, with the right resource, you can find where customers spend their time and what influences them the most. Customer surveys are also an effective tool in getting feedback from customers and helping to classify them based on their preferences.
Add all of this together and you can get a true 360-degree view of your customer. This insight will help you improve your decision with regards to offer, channels, message as well as products and customer segmentation.
Once you have a true 360 degree view of your customer, you can use today's technology to serve impulse offers to your customers through email, web ads, and in-store promotions.
For example, I haven't shopped online for a vehicle for myself in over 10 years. However, my old Toyota 4Runner is up to 180,000 miles and the starter was recently acting up. I took it to the Toyota dealer, but their $900 quote was a little rich for my blood, so I went to a local Christian Brothers shop for the repair. Since my visit to the Toyota dealership, I have not received any communication from them via phone, email, or mail introducing me to the new Toyotas. They are waiting on me to go online and search for a car when I think I want one. But, if they wait on me to search, they will lose control of the sale. They will be thrown in amongst the other online marketers hoping to get the Vehix or Ebay Automotive lead, or hoping their SEO strategy will attract me to them. Guess what! They could have already had me if they had just shown me what I didn't know I wanted.
How about another example. I'm a Verizon Wireless customer with a Droid X that I have had about 9 months. I logged onto my Verizon Wireless account this week and what to my wondering eyes did appear, but an ad for an iPhone 4S. Let's think about this. I have 15 months to go on my contract. My Droid X is relatively new and I love the Android operating system. Why would Verizon Wireless think I would be interested in their iPhone 4S offer? Are they just serving this same ad up to every customer? A better offer may have been an additional phone for my son that just turned 16. Or an Android tablet for the new business my wife just started.
Example three. I love Costco. I shop there often and I've been a member for at least 6 or 7 years. So, why do they keep sending me irrelevant offers via email. The latest Costco email personalized to me offered me Huggies diapers and it was right next to an offer for a Canon Rebel Ti2 camera. My youngest child is 8 -- well out of diaper range, and I bought a Canon Rebel camera from Costco just 6 months ago. With a little insight, Costco would know that I have bought an Xbox system and Xbox games in the past. How about an offer to pre-order the soon to be released Call of Duty MW3 game that I didn't know they even carried? Or an upgrade offer for the newest Xbox 360 console with built-in wireless?
Don't fall into the trap of thinking customers are only buying what they search for. With the right customer intelligence strategy, you can increase sales substantially with your existing customers by showing them what they don't know they want.....yet!
David Hadaway is the CEO for Altair Customer Intelligence, a provider of solutions to help companies acquire new customers, increase wallet share of existing customers and measure results to positively impact marketing goals.