CUSTOMER BEHAVIOR AND RELATIONSHIP INTENSITY

BEYOND MARKET SEGMENTATION - In the physical world, businesses can sometimes create different experiences for customers in  response to their needs. For example, a company might decide that its mission is to sell prepared  meals to hungry customers.

A given potential customer responds to hunger in different  ways at different times. If a person is hungry in the morning, but late for work, that person  might drive through a fast food restaurant or grab a quick cup of coffee at the train station.

The point is that the same person requires different combinations of products and services  depending on the occasion. In general, the creation of separate experiences for customers based on their behavior is called behavioral segmentation. When based on things  that happen at a specific time or occasion, behavioral segmentation is sometimes called  occasion segmentation.
Usually, businesses that operate in the physical world can meet only one or a few of a customer’s differing behavioral needs. Very few restaurants are able to offer everything from fast food through a five-course dinner. In the online world, it is much easier to design a single Web site that meets the needs of visitors who arrive in different behavioral modes.

Thus, a Web site design can include elements that appeal to different behavioral segments. Marketing researchers are just beginning to study how and why people prefer different combinations of products, services, andWeb site features and how these preferences are affected by their modes of interaction with the site.

Market researchers are finding that people want Web sites that offer a range of interaction possibilities from which they can select to meet their needs. Remember that a particular person might visit a particular Web site at different times and might search for different interactions each time.

Customizing visitor experiences to match the site usage behavior patterns of each visitor or type  of visitor is called usage-based market segmentation. Researchers have begun to identify  common patterns of behavior and to categorize those behavior patterns. One set of categories  that marketers use today includes browsers, buyers, and shoppers.

Browsers: Some visitors to a company’s Web site are just surfing or browsing. Web sites intended to appeal to potential customers in this mode must offer them something that piques their interest. The site should include words that are likely to jog the memories of visitors and remind them of something they want to buy on the site.

These key words are often called trigger words because they prompt a visitor to stay and investigate the products or services offered on the site. 

Links to explanations about the site or instructions for using the site can be particularly helpful to this type of customer.

A site should include extra content related to the product or service the site sells. For example, a Web site that sells camping gear might offer reviews of popular camping destinations with photos and online maps. Such content can keep a visitor who is in browser mode interested long enough to stay at the site and develop a favorable impression of the company.

Once visitors have developed this favorable impression, they are more likely to buy on this visit or bookmark the site for a return visit.
    Buyers:  To avoid placing barriers in the way of customers who want to buy, the site should not ask visitors to log in until they near the end of the shopping cart procedure. Perhaps the ultimate in shopping cart convenience is the 1-Click feature offered by Amazon.com, which allows customers to purchase an item with a single click.

    Any items that a customer purchases using the 1-Click feature within a 90-minute time period are aggregated into one shipment. Amazon.com has a patent on the 1-Click feature.

    Shoppers: Some customers arrive at a Web site knowing that it offers items they are interested in buying. These visitors are motivated to buy, but they are looking for more information before they make a purchase decision. For the visitor who is in shopper mode, a site should offer comparison tools, product reviews, and lists of features.

    Sites such as Crutchfield and Best Buy allow customers to specify the level of detail presented for each product, sort products by brand, or price, and compare products with each other side by side.

    Remember that a person might visit a Web site one day as a browser, and then return later as a shopper or a buyer. People do not retain behavioral categories from one visit to the next—even for the same Web site. Although many companies work with these three visitor modes, other researchers are exploring alternative models.

    Much of Web site visitor behavior is not yet well understood. One study conducted by major consulting firm McKinsey & Company examined the online behavior of 50,000 active Internet users and identified six different groups. Following are the six behavior-based categories and their characteristic traits:
    • Simplifiers are users who like convenience. They are attracted by sites that make doing business easier, faster, or otherwise more efficient than is possible in the physical world.
    •  Surfers use the Web to find information, explore new ideas, and shop. They like to be entertained, and they spend far more time on the Web than other people. To attract surfers, sites must offer a wide variety of content that is attractive, well displayed, and constantly updated.
    •  Bargainers are in search of a good deal. Although they make up less than 10 percent of the online population, they make up more than half of all visitors to the eBay auction site. They enjoy searching for the best price or shipping terms and are willing to visit many sites to do that.
    •  Connectors use the Web to stay in touch with other people. They are intensive users of chat rooms, instant messaging services, electronic greeting card sites, and Web-based e-mail. Connectors tend to be new to the Web, less likely than other people to purchase on the Web, and actively trying to learn what the Web has to offer them.
    •  Routiners return to the same sites over and over again. They use the Web to obtain news, stock quotes, and other financial information. Routiners like the comfort of working with a user interface that they know well.
    •  Sportsters are similar to routiners, but they tend to spend time on sports and entertainment sites rather than news and financial information sites. Since they view theWeb as an entertainment vehicle, sportsters are attracted by sites that are interactive and attractive. belonging to a particular category of customer when they enter the sites.
    Other research studies have identified similar sets of characteristics and groupings. Companies in different industries or lines of business identify somewhat different sets of  characteristics and group their Web site visitors using different names.

    The challenge for Web businesses is to identify which groups are visiting their sites and formulate ways of generating revenue from each segment. For example, some of these groups (such as simplifiers and bargainers) are ready to buy and would be interested in seeing specific product or service offerings. 

    Other groups (such as surfers, routiners, and sportsters) would be good targets for specific types of advertising messages. As more researchers study Web site visitor behavior, perhaps the industry will learn how to recognize the various modes in which visitors arrive and then channel them into the appropriate sections of the site. Until then, many Web sites use Dell’s approach, in which visitors are asked to identify themselves as belonging to a particular category of customer when they enter the sites.

    Source : Electronic Commerce (Seventh Edition)

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