The Anatomy of a Brand Purchase – Part 1

Summary: This two-part article seeks to help better understand how to stimulate brand relationships and brand purchases – of balancing the short and the long-term. At its most basic level it’s about doing the right things…right. Of knowing the right way of interacting with the right person, about the right thing(s), at the right time/place.

The central thesis is that a brand will achieve greater market success when it comes to recognize and respond to one of 4 basic types of (economic/Wallet, rational/Mind, emotional/Heart, committed/Life) relationships that its customers can have with the brand. (viewed from the enterprises perspective these relationships are Buyer, Consumer, Customer and Partner)These relationship characteristics define what elements of the brand value chain they will be more receptive to and the kind of ‘psychological’ language that marketers should be using when communicating with those brand customers.

Once defined, using the same (W, M, H, L) relationship characteristics allows marketers to transform a media neutral planning model into a marketing integration impact (MII) tool that will identify the combinations of Communication, Experience and Overture events that have yielded a successful purchase, and with it evolve to more balanced tactical and strategic initiatives that can be attributed back to an ROI.

Purchase (P) = xC + yE + zO = 1

The following outlines some thoughts and approaches first put forward in “The Ultimate Decision” and “ Share of Life” posts and extends it through to a model structure that seeks to develop a healthier balance in nurturing purchase tipping events.

What kind of relationship do customers want to have with your brand?

A brand’s success in the market place is ultimately defined by its ability to put forward a stronger more relevant value proposition and translate that marketing overture into a valued response from the customer. Uncovering those steps is at the heart of today’s ROI based marketing practices.

Problem is, not all marketing overtures result in a valued response. For whatever the reason, marketing overtures aren’t always timely, relevant or compelling to prospective customers. That gap is what keeps marketers up at night.

There is some promise that the emerging Behavior Targeting tools in conjunction with SEO and triggered emails will help address the factors of timeliness and relevancy – presuming of course that the timing of the resultant need-driven or impulse driven revenue stream is in keeping with the commitments made to Wall Street. However many enterprises do not have the luxury of time for customers to come to self-recognize and act on their needs. CFO’s need to stimulate purchases and seek to do so in the shortest possible chain of events. In the process they run the risk of conditioning customers to sequences of stimuli which may not be in the brand’s best long-term interest. But that’s tomorrow’s problem – or is it?

The ability to ‘stimulate’ a valued response/purchase “on demand” will always be the preeminent objective of marketing founded as it is on the belief that demand is essentially latent and merely needs some simple prodding to bring to fruition.

So how does one go about improving the probability that marketing overtures fall on fertile ground?

Is it really as simple as having timely, relevant and compelling offers? Are customers really that Pavlovian?

Or do successful brands gain an advantage by recognizing the individuality of its customers and seek to create a dialogue using the language of its customers reflecting the different needs and motivations that define their brand value perspectives – adding color to the brand’s central purpose be it price, service or product leadership.

The truth, as with all things will lie somewhere in the middle.

The answers to those questions however are not easy. It requires a new way of looking at and doing things within a revised functional paradigm which helps the enterprise understand that triggering a purchase event is at the end of a variable sequence. And so while the goal must be to generate the timely results business needs – it’s probably in the brand’s better interest to do so from a more strategic purchase-communication cycle while using the language, stories and actions appropriate to that customer.

The exciting part is that even though we may consider today’s web-centric instruments to be leading edge – on the evolutionary timetable they are still fairly blunt. With the increasing specificity of the clickstream, social media, mobile marketing, digital signage, RFID and who knows what other developments yet to unfold – the ability to reach out to customers at the exact time and place of maximum relevancy will be rapidly upon us. With that we will also come to see a crossover of the yield pricing tools used by the hospitality sector for decades as the value of the brand will be defined by the need at the moment. But those are thoughts for another day.

That being said, let’s begin.
The first step of that journey is coming to understand:

What kind of relationship do your (profitable) customers want to have with your brand?

As much as the need to generate profitable sales will dictate the activities of the enterprise – we lose sight that how one goes about fulfilling that mandate is not so much in the brand’s control as it is in your customer’s.

Only when this is determined will the enterprise be in a position to deliver the relevant components of the brand promise in the most receptive customer manner. It will define the more effective channels of communication, the type of message and language of the communication as a sequence of events leading up to the ultimate purchase event. Implementing this more effectively than the competition is what makes a brand great.

There are 4 key types of relationship characteristics that (profitable) customers can have with brands which will help define the migration of the relationship from being a simple buyer, to a customer, to a partner.

You might be rolling your eyes just about now thinking, great yet another classification scheme. What with brand personality, brand essence, brand persona, brand promise, brand identity, brand value, brand attributes, brand traits….

This is not a subtle twist on any of these – rather it is quite literally the kind of relationship customers want to have with your brand – regardless of how it is ultimately ‘positioned’ in the marketplace. That relationship will also come to define the type of language these customers are using when thinking or discussing your brand. And so while the common bind is the brand, the brand promise and the underlying value chain, how each component in the brand value chain is perceived and judged (Wallet, Mind, Heart, Life) will be dictated by the relationship characteristic.

Share of Wallet:

This characteristic captures the transactional relationship that some customers have with brands. It is based on the short term – the immediate offer you are making – now. The future purchase decision will be made subject to the available options (price, convenience, promotion) at that point in time.

Sometimes a customer may look like they have a (purchase continuity) relationship with the brand. But that is only because the brand was able to daisy-chain individual transactions into a longer continuum; there is no inherent affinity to the brand other than the needs at the moment. Think of the retail gasoline sector.

Consequently any customers you find here will be subject to considerable scrutiny to identify the chain of events (programs, offers etc) that can be developed to create a continuity program to help capture future transactions and more importantly build the bridges to higher level relationships. It will take time to transform attitudes of these customers who likely see a commoditized bundle of easily interchangeable offerings.

Naturally, not many brands are comfortable knowing their profitable customers are transaction driven. Coming to understand it will be the first step in helping you reclaim your brand and discovering the brand promise customers will latch onto.

Share of Mind:

This characteristic speaks to the rational mind. Those who seek to understand the brand and its relationship within the category from the standpoint of the meaningful, tangible points of difference. The car tire sector comes to mind – of the people who evaluate the different options based on tread life, price, stopping distance etc. and not swayed by branded messages “Michelin. Because so much is riding on your tires.”

There are three basic types of consumer motivations.

1. Those who wish to understand the meaningful branding differences because of their interest in the category or their interest in the brand.
2. Those making a considered resource expenditure (money, time) or have heightened safety/technical requirements and need to substantiate to themselves/stakeholders that the best valued solution was selected.
3. Those not able or prepared to make an emotional link with the brand.

In any case, these customers are prepared to do their due diligence. In speaking to them directly it is wise to express an elevated respect for the customer. In addition to company literature (white papers, technical reports) rational appeals, scorecards, fact/figures – these customers will put great stock in 3^rd party consumer reports and testimonials/word of mouth.

The B2B sector tends to experience this at the gatekeeper touch points – where a solution is frequently decided upon using an RFP scoring system or subsequently as part of the service level agreement monitoring process. However, deeper within the user community, any variety of characteristics (Share of Heart, Share of Life) will apply creating an interesting relationship management challenge.

The B2C sector is also filled with rational customers seeking to make rational choices of brands/categories i.e. car tires, appliances/white goods etc…Some may even transform their rational link to an emotional bond – as “enthusiastic fanatics” the world over will attest.

Share of Heart:

Emotional appeals (and its variants: humor, fear, joy, sadness, anger etc…) are arguably the most powerful a marketer can deploy for their brand. Strike the right emotional chord and customers may respond like Vulcans during Pon’far.

This characteristic is empowered at one of three levels of intensity:

1. Weak: Simple pleasant/personable/memorable brand experiences or events.
2. Moderate: Brand evangelism, Moment of Truth euphoria, fashion/image/group belonging needs.
3. Strong: Events that seem to strike at a raw psychological nerve. Dangerous territory – engage at your peril.

Customer Experience Management (CEM) initiatives deal with the weak and seek to transform customers into moderates. At its core CEM works on the basis that the periphery defines our experience. Therefore all the touch points (enablers/detractors) the customer has with the brand are optimized by working backward through the enterprise’s systems/operations to hard/soft/wet engineer a desired consistent brand experience standard.

These customers are looking for more that simply buying and consuming the brand. They wish to have some level of interaction reinforcing the deeper nature the brand has become in their lives. These evangelists and potential mavens want to be recognized as part of an inner circle. With the current evolution of the open social standards initiative across social media, increased ability to selectively share with one’s refined circle of friends vs colleagues vs network acquaintances, this group will be subject to a great deal of marketer attention.

But dealing with this group is not a simple matter – it requires an understanding of the TYPE of emotional connection they have with the brand in order to be able to communicate back to them in a similar fashion.

Share of Life – “WE” “Committed”:

This stage represents the most ‘sophisticated’ relationship customers can have with brands. Unlike the other three which tend to be “ME”-centric in term of meeting one’s needs, Share of Life is “WE”-centric. It’s based on a “committed” long-term viewpoint, where customers view the brand as a trusted and proven value proposition – a partner, not a transaction and not a cheerleader, hence a blend of the 3 previous (WMH) types.

Mutual assistance and co-creation are the key dynamics. They consider the brand to be a long-term partner working to provide innovation and solutions. For that they are willing to share more information about their needs. However along with the maturity and sharing comes a responsibility that the brand must also be mindful of the economic power bestowed upon it by its constituents and yield that economic power in concert with the wishes/moral compass of its constituents. This relationship is developed and strengthened over time as the brand is able to stay “committed” to the customer through the good and the bad.

This does not mean that customers will turn to the brand to satisfy 100% of their category requirements – because life (like the game of rock-paper-scissors) just doesn’t work that way. But where circumstances permit and competitive enticements are normative, the brand will be the preferred choice. This bond will be the most difficult to break, and if ever broken – highly unlikely to be re-established because all eyes will forever see the spot where the promise was broken.

EACH characteristic is operating simultaneously:

It is important to note that each of these relationship characteristics are not stand-alone silos, applying to one brand and not another. Each exists simultaneously and to make life even more interesting, the same customer will have different relationship characteristics with different brands.

To illustrate the point, a price brand will have customers with a variety of relationship characteristics – there are those who will have a transactional focus; others will have a rational mindset or be driven by the emotional/experiential factors. Let’s consider Wal-Mart – the worldwide paragon of a price brand.

With 84% of US Households making at least one purchase at a Wal-Mart in the course of a year (see ACN HomeScan Study ) – it seems ludicrous to think all shoppers only go to Wal-Mart because of the price. In fact only 37% claimed price to be their primary motivation, an equal proportion (34%) are motivated by convenience, others still may go there for rational/Share of Mind reasons etc.

The point being that if we were to consider the Wal-Mart customer as a price/transaction constituency, we would only be talking effectively to a minority (37%) of its constituents – leaving the brand vulnerable to attack from other quarters much as Target has done by appealing to the emotional components.

Dell is another example of a brand seeking to migrate its customers from a Share of Wallet through Share of Mind and into a Share of Heart characteristic by rebalancing its price vs. solutions/benefits advertising focus.

To this point we have outlined the 4 relationship characteristics; the next part is to begin to appreciate the psychology of a purchase.

Purchase Tipping Points:

How do customers come to conclude a purchase? Does it matter – as long as there is a profitable purchase at the end of the shortest, least costly route possible?

The notion of purchase tipping points reflects the need to understand and establish the supportive sets of conditions for a purchase to occur. Please note the use of the word supportive …not sufficient. As stated earlier, it is sufficient that customers are exposed to purchase offers – indeed it may be the only interest they have of interacting with the brand. Others however are receptive to more – in addition to (not necessarily exclusive of) the purchase offer. For these people the supportive conditions will be defined by the purchase tipping point – that sequence of events, communication, experience and offers that reinforce the brand and help trigger the decision to buy, not expressly for the ‘magical’ price point – but in concert with higher order/deeper brand benefits.

With a purchase tipping point paradigm we seek to view purchases as the culmination of an ‘integrated’ event campaign and a new clearer understanding of the supportive role pricing will play in the communication. We seek to understand how the constituent components of the brand value chain can be leveraged to heighten the probability of a brand purchase and develop a balance of push and pull brand connectivity with the customer.

This does not mean that pricing is banished. Far from it – pricing plays an important role in framing the value of the brand. Rather that a variety of prices (discounted and regular) can be promoted to customers depending on the brand task at hand, the informational value one is seeking to impart and the balance the brand is striving to achieve. By all means – during key purchase events (holiday shopping periods) take aggressive ownership of the pricing stance you wish to establish for the brand. But be aware of perhaps some (not so subtle) additional things one can do to better communicate in the language of your customers that will also stimulate purchases of your brand – as the Dell example illustrates.

NOTE:

In Part 2 we will outline a communication and marketing tool that seeks to help manage brands more effectively by creating the requisite conditions to trigger (individual) purchases and extract maximum profitability.

Other articles of Interest:

Brand Affinity Dynamics

Brand Momentum

Share of Life