Page 50 - MYM 2015

bias during the conversation, the connection either strengthens or weakens the brand appeal.
In the ‘Aware’ phase, customers are passively exposed to a long-list of brands from past experience, marketing communications, and/or advocacy of others. Customers then process the messages they are exposed to— creating short-term memory or amplifying long-term memory—and become attracted only to a short-list of brands. This is the ‘Appeal’. In industries where brands are abundant, brand appeal must be stronger.
Prompted by their curiosity, customers actively research the brands they are attracted to for more information from friends and family, from the media, and/or directly from the brands. This is the ‘Ask’ stage.
At this stage, the customer path changes from individual to social. Decision will made based on what customers take away from the conversation with others. The brand appeal needs con rmation from others to allow the path to continue.
Reinforced by more information, customers decide to ‘Act’. They buy a particular brand and interact deeper through purchase, usage, and/or service processes. Over time, customers may develop a sense of strong loyalty to the brand which is re ected in retention, repurchase, and ultimately advocacy to others. This is the ‘Advocate’ stage.
Mapping Customer Path across Industries
The 5A’s is a generic customer path which is applicable to all industries. This allows for cross-industry comparisons, which provide insights into industry characteristics. For example, the strength of each
stage varies by industries. The ‘Ask’ stage in consumer packaged goods is relatively weaker while in automotive is stronger. It means that consumers in consumer packaged goods don’t really asked too much about which brands to choose while in automotive, consumers are more active in researching brands.
Looking at 5A’s conversion rates can also reveal important insights (Exhibit 3). Low conversion rate from ‘Aware’ to ‘Appeal’ reflects low customer attraction. It may stem from a poor positioning and a marketing communications execution. Low conversion rate from ‘Appeal’ to ‘Ask’ is a sign
of low customer curiosity. It usually stems from company’s inability to trigger conversation and facilitate information sharing among customers.
Low conversion rate from ‘Ask’ to ‘Act’ means low commitment: people are talking about the brand without commitment to buy. Usually this means company fails to convert con rmed interest into purchase through its distribution channel.
Low conversion rate from ‘Act’ to ‘Advocate’ means
low af nity: customers who have experienced the brand are not delighted enough to recommend the brand. It may come from poor after-sales service or poor product performance.
We found that these conversion rates produce distinctive patterns of customer path. We found at least four most common patterns: gold sh, door knob, trumpet, and funnel (Exhibit 4).
Exhibit 3: The New Loyalty Formula
Appeal
LOYALTY = X X X
LOYALTY = X X X
Ask
Awareness ATTRACTION
Appeal CURIOSITY
Act
Advocate Act
AFFINITY
Ask COMMITMENT
Repositioning
Marketing Communications
Community Marketing
Social media Conversation
Channel Management
Sales force Management
Loyalty program Customer care
Possible Company Intervention To Increase Conversion Rates
Source: MarkPlus analysis
Exhibit 4: Mapping Customer Path Across Industries
GOLDFISH A1A2 A3A4 A5
- Need confirmation before buying
- Indecisive in purchase decision
- Unattractive or cluttered information
- Unclear positioning among competing brands
DOOR KNOB TRUMPET A1A2 A3A4 A5 A1A2 A3A4 A5
Customer Behavior
FUNNEL A1A2 A3A4 A5
- Focus on functional benefits
- Indifferent towards brands
- Commodity product across brands
- Difficulty in differentiating with others
- Have prior expectation & preference
- Have low attachment towards brand
- Highly involved in purchase decision - Have confidence in
brand quality
Industry Characteristics
- Aggressive branding and marketing communications
- Many competing brands
- Reputable image from quality association
- Strong influence 48 from word of mouth
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The key characteristic of the gold sh pattern is that people need to ask questions before purchasing
a particular brand. We nd such pattern in many business-to-business context. In many cases, industry players have dif culty conveying their positioning vis- à-vis their competitors. Thus, customers tend to spend time to evaluate and nd the best offering.
Another common pattern is the door knob pattern, which is found mostly in consumer goods. Customers do not spend time to ask questions. Most purchases are instant because prices are relatively low. Hence, players are spending