Whether you’re a sporting goods retailer, a credit card company, or a local pizza shop, the majority of the research your potential customers do to decide which product to buy and where to buy it takes place in a search engine. This article discusses the importance of being present in consumers’ research phase and the specific tactics you can use to capture “in-market” shoppers when they are in this critical decision-making phase of the purchase funnel.
Understanding the Consumer’s Purchase Journey
As consumers, we all go through a “journey” before making a purchase decision. We don’t wake up one morning and randomly think: “I’m going to buy (product x).” There are many steps leading up to that final decision, including recognition that we need a certain product or service, followed by research to determine which specific product or service to purchase. In marketing, traditionally this process has been referred to as a “purchase funnel”.
There are many variations of the purchase funnel that add, subtract or re-name different stages based on specific types of products, customers or industries. Most modern versions even take into account after-purchase factors such as product satisfaction, customer retention and intent to re-purchase. However, the basic stages that are similar across most versions are: Awareness, Familiarity, Consideration, and Purchase.
The middle two stages of the funnel- Familiarity and Consideration- are where consumers spend the bulk of their time researching alternatives and finalizing their purchase decisions. In the Familiarity phase, buyers have just begun their research and need additional information. They know they need a product in your category, so they are looking for reviews, comparison shopping and familiarizing themselves with brands. As buyers gather information, they narrow their choices and move into the Consideration phase. In this stage, buyers finalize their purchase decision through more research, including looking for discounts, “test driving” products, and reaching out to their social network for opinions on the products.
Search’s Place in the Purchase Funnel
So, how does Search fit into this research-heavy phase of the consumer’s purchase decision? Google helped answer this question when it released its 2011 ebook (updated in 2012) titled “Winning the Zero Moment of Truth” (ZMOT).
The ZMOT concept is based on Procter & Gamble’s First Moment of Truth (FMOT) theory that described “the critical importance of the seven seconds after a shopper first encounters a store shelf full of detergents or toothpaste or anything else.” Google correctly identified that due to the rise of consumer research online there is now a new “moment of truth”- ZMOT- that comes before the FMOT Google defines ZMOT simply as “that moment when you grab your laptop, mobile phone or some other wired device and start learning about a product or service you’re thinking about trying or buying.”
Attracting Consumers in the Research Phase
Now we will examine the specific ways marketers can utilize Search to have the best chance of being included in the consumer’s final consideration set.
Consistent Investment in Generic Keywords
Generic keywords (also known as non-brand or unbranded keywords) are a critical piece of the consumer’s research process as these terms tend to be used more frequently by consumers at the top of the funnel while they are still gathering information and not yet familiar with particular brands. A best practice is to be present consistently across a wide range of generic keywords related to your products. The word “consistently” is key as the length of the purchase cycle can go on for an extended period of time, depending on the type of product. Over 60% of banking customers began doing research at least one month before making their final purchase decision on which bank to open an account with.
The implication of this is that if a brand had no presence in generic keywords 2-3 months ago when the consumer began their research, then they may not be in the final consideration set today. To borrow a line from the New York Lottery slogan from the 1980’s, “You have to be in it to win it!” So, why do so many brands make the mistake of under-investing in generic keywords or cycling on and off too frequently? Usually the answer is cost. Or more specifically - “perceived” Return on Investment (ROI), which I will define later.
Experienced search marketers know that the cost to bid on generic keywords is significantly higher than bidding on brand keywords (keywords that contain a specific brand or product name). For example, the average cost per click (CPC) for the term “best smartphone” will be significantly higher for Motorola to bid on than for a term like “Motorola DROID RAZR M”. Why? Competition on brand terms, and therefore auction prices, are low as most companies do not bid on their competitors’ brand terms due to low relevance that results in low impression share and high CPCs. However, for generic keywords, competition and auction prices increase significantly because the majority of advertisers in a category will bid on these terms to take advantage of the high query volume as well as the benefit of a level playing field that gives every advertiser the same chance to acquire new in-market customers.
But last click conversion rates (i.e. the percent of customers that purchase directly after searching on a generic keyword) on generic keywords are generally low because searchers of these queries are still researching and not yet ready to buy. This is where "perceived" ROI comes in. When marketers look at the ROI for generic keywords from a last click perspective, many times it does not seem sustainable and they shut the keywords off. But this is a mistake as this number does not fully quantify the true ROI produced by generic keywords. True ROI would incorporate more modern marketing best practices such as accounting for multi-click, cross-channel, cross-device attribution and assigning value to impression and click “assists”, increased brand awareness, brand recall, and brand health (influence on favorability toward brand). The ROI of generic keywords can also be enhanced by aligning your user experience closely to the user’s intent.
Utilize Google Product Listing Ads (PLAs)
Comparison shopping engines (CSEs) are websites that offer consumers the ability to compare prices on products at various online retailers. Presence and visibility on CSEs and optimization of product feeds are critical for retailers that sell widely available products. Examples of popular CSEs include Shopzilla, PriceGrabber, Nextag and Shopping.com.
But arguably the largest and most important CSE to optimize for is Google PLAs. PLA listings are prominent on the Google Search Results Page (SERP).
For more information on PLA best practices and optimization techniques, please read our articles about “PLAs: A Look into the Future of Shopping as Google Builds a New Niche” and “PLA Short Term Opportunities and Considerations”.
Optimize Your Mobile Experience
It is important for advertisers to provide robust research capabilities and shopping experiences no matter what device a customer is using. Similar to the importance of maintaining a consistent presence for generic keywords, advertisers must optimize their mobile and tablet experiences. One of the main themes of Google’s 2012 update to the original ZMOT e-book was the revelation that the majority of consumers are now multi-screen users (Ex. using a smartphone and a TV together; using a laptop and a smartphone together, etc.). Google says “that means marketers have the opportunity to stimulate on one device and spark a visit to ZMOT on another.”
Another mobile trend that has gained traction for consumers in the research phase is the practice of carrying a smartphone while shopping in-store to compare prices and find information. To learn more about this trend and how to optimize your mobile experience for it, please read out article about Supporting Consumers at the Shelf through the Mobile Experience.
Segment Customers through Remarketing
Remarketing - or retargeting as it is sometimes called - is the ability to show specific ads to users based on their previous visit and actions on an advertiser’s site. Remarketing can offer advertisers many different advantages throughout the purchase funnel, including the opportunity to stay top of mind, as well as use the ability to use it for cross-device or cross-channel prospecting and customer relationship management. There are many ways customers can be segmented and targeted depending on their position in the purchase funnel.
Reinforce Social Influence
Finally, another way to influence consumers’ purchase decisions in the research phase is to reinforce the social influence their friends and family have. As customers share their views and opinions about a product or brand via facebook, these posts may eventually become the initiating event for other customers. These events can be enhanced by supplementing them with Facebook Ads, which show that a friend likes a certain product.