Does Your Brand Have Momentum? June 2013

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DOES YOUR BRAND HAVE MOMENTUM?

A new approach to understanding and measuring today’s purchase journey

Momentum closes gaps in understanding between what buyers do during the purchase journey, how their perceptions of your brand influence their behavior, and how they use media and brand communication to make their choice.

DOES YOUR BRAND HAVE MOMENTUM? In an increasingly competitive landscape, brand-owners are looking at every possible way to gain advantage and drive brand growth. Understanding of how and why people buy products and services is a priority now more than ever. In recent years, much effort has been put into finding new ways of describing the process buyers go through and the role technology plays in their decision making. There has also been growing recognition that the journey does not start and stop, but is a continuous cycle that we never leave as we move towards our next purchase. Today’s communications landscape is increasingly layered and complex. Consumers are playing a bigger role in other people’s purchase journeys – advocating, enabling and diverting product choice. So purchase journey understanding needs an upgrade. What is it that really keeps your customers moving towards purchase, and how can you use brand behavior and communication to keep them on track? Above all, are you ignoring a vital part of the journey by focusing only on when people are actively thinking about buying something?

Momentum is MEC’s new proprietary approach for understanding and quantifying how people make purchase decisions, based on studies with over 100,000 respondents across multiple categories and countries around the world.

Momentum is MEC’s new proprietary approach for understanding and quantifying how people make purchase decisions

Using the latest insight into the psychology of choice, uniquely, Momentum closes gaps in understanding between what buyers do during the purchase journey, how their perceptions of your brand influence their behavior, and how they use media and brand communication to make their choice. Momentum provides summary scores for each stage of the purchase journey and gives an overview of your brand’s performance versus competitiors. All of this understanding is based on a category-specific research study that is cost-effective and highly actionable. Momentum is for everyone who is interested in how people really make decisions about brands and products, how their brand performs against competitors and what marketing communications can do about it.

39% of Toothpaste buyers in China already have a strong idea which brand they’ll buy before they start the buying process.

WE ARE ‘ALWAYS ON’

This compares with 63% of Mobile Network subscribers in Poland.

Before we start thinking about what to buy, many of us have already decided… The purchase journey is a continuous cycle with four simple stages:

Source: Momentum 2013

THE MOMENTUM CYCLE ACTIVE STAGE

PASSIVE STAGE

What brand biases do people develop during daily life?

What do people do when actively considering a purchase?

TRIGGER

PURCHASE

What are the needs or wants that propel people into the Active Stage?

When trying to understand the purchase journey, research commonly focuses on the things people do once they have consciously started the buying process. At MEC, we call this the Active Stage of the journey. But Momentum demonstrates what psychologists have long known: before people actively think about making a purchase, powerful cognitive biases are already helping them to make a choice – without their realizing it. Even though most of the Passive Stage of daily life is not spent thinking about what we’re going to buy, we can’t stop ourselves forming biases – both positive and negative – about the brands that surround us. In effect, we are always moving through the journey towards our next

Who buys your brand and what do they do after purchase?

purchase, in an on-going cycle of actions and decisions.

53% of people have a strong idea which brand they will buy before starting the process

For some marketers, the quantified result of these biases will be alarming. Across different categories of products and services, 53% of people have a strong idea which brand they will buy before starting the process. We call the result Passive Stage Bias and its influence over people’s buying behavior is profound. All of us need shortcuts when making a purchase – life is too short to consider every option rationally every time we buy something – and Passive Stage Bias is a powerful shortcut based on a range of cognitive biases. As marketers, we need to understand what causes it and its effects on buyers’ behavior.

IMPLICATION

1

ARE YOU IGNORING HALF OF THE PURCHASE JOURNEY?

What we call the Passive Stage is an under-researched and, in many cases, misunderstood part of the purchase journey. Powerful biases are formed in this stage, with ripple effects throughout the rest of the journey. For many brands, the Passive Stage is a dangerous blind spot. If your focus is on moving people from consideration to purchase, you miss a very important part of the journey. Passive Stage Bias affects people’s behavior and attitudes throughout the Active Stage when they’re actively considering a purchase, and even affects satisfaction after they’ve made their purchase. Are your customers ‘Confirmers’ or ‘Comparers’? What does it mean to ‘consider’ a brand for purchase? The effects of Passive Stage Bias means that consideration means different things to different buyers. If a buyer already has a strong bias, what looks like consideration of other brands can actually be just looking at other brands to confirm their choice. But if there is no bias towards any particular brand, you’ll compare a greater range of options, to make a more difficult, rational choice. And depending on whether you’re confirming or comparing in the Active Stage, you’ll use media touchpoints differently, which alters the roles for brand communication. There are very different types of purchase journey Car buyers on ‘Confirmer’ journeys typically have high Passive Stage Bias and are often looking for rational information to confirm an emotional brand bias. Car buyers on ‘Comparer’ journeys will typically have lower Passive Stage Bias and be looking for help in the Active Stage to narrow their choice.

AVERAGE passive stage bias BY CATEGORY People with strong Passive Stage Bias consider fewer brands, spend less time in the Active Stage, are less concerned with price when making their choice and are happier with their decision after purchase.

65%

Flat Screen TVs Moisturisers

32%

43%

Mobile Service Providers Source: Momentum 2013

The percentage of in-store decisions might be lower than you think Received wisdom says that 70% of decisions are taken in-store. But with strong Passive Stage Bias at 49% even in FMCG categories, many people have already made up their mind before going near a store. ‘In-store’ communications effect on ‘out of store’ bias toward brands We expect in-store communication to be good at grabbing attention and driving purchase. However, Momentum shows that in-store touchpoints are just as important for building Passive Stage Bias during daily life as they are for driving sales in the Active Stage. Touchpoints such as brand displays, signage, packaging and even special offers are up to twice as effective at driving Passive Stage Bias than some paid media. Using communications to give your brand momentum in the Passive Stage 1. Identify the Paid, Owned and Earned touchpoints which drive Passive Stage Bias in your category. Ensure messaging in these channels focuses on what makes your brand distinctive and what consumers find most important in the category. 2. Integrate retail and promotional activity into your strategy: you may be surprised how much it influences Passive Stage Bias toward your brand. 3. Review the cycle and phasing of your communications: brands are always selling, whether consumers buy today or not. 4. Identify ‘multi-tasking media’ and new ways to execute in these media: some touchpoints play dual roles in the purchase journey. 5. Establish which of your competitors have strong and which have weak Passive Stage Bias. Develop strategies to encourage brand switching.

IMPLICATION

2

CONTEXT IS EVERYTHING

Momentum demonstrates that Paid, Owned and Earned communications play different roles not only in different brand categories, but at different stages within brand categories.

Many existing studies of purchase journeys suggest communications touchpoints can be grouped into typologies – reflecting a general role for touchpoints which can be applied to all purchase journeys, irrespective of the category or purchase cycle. Results from Momentum studies across multiple categories demonstrate this is not the case. There is no single ‘black box’ answer to the role of touchpoints at different stages of the purchase journey.

Buyers of Flat Screen TVs in Germany develop Passive Stage Bias from TV, print and online ads; but seeing the product in store and third-party opinions drive Active Stage Bias.

Active StagE Touchpoints (guiding purchase) 1. Bank or credit card issuer website 2. Email from credit card issuer 3. Ad on a website 4. Online search results 5. Comparison website

Passive Stage Touchpoints (building Passive Stage Bias) 1. TV ad 2. Ad on a website 3. Magazine ad 4. Letter from credit card issuer 5. Email from credit card issuer Source: Momentum, credit cards, USA, 2013

Each category is different. And Momentum shows that touchpoints can have surprising effects beyond the role they are traditionally perceived to play. We quantify them using Touchpoint Power Scores (TPS).

Planning for brand growth across touchpoints 1. Harness the most powerful Paid, Owned and Earned touchpoints and synchronize their roles.

Momentum also quantifies the different role of touchpoints at both the Passive and Active Stage of the journey. In the US example on the right, we look at the five most influential touchpoints for people looking to get a new credit card.

a. To generate more positive Passive Stage Bias

There are clear differences in the media that people use to help them make a purchase (in the Active Stage) and the media that helps build Passive Stage Bias, before people are actively thinking about purchasing a new card. There is no one-size-fits-all answer to planning the use of touchpoints. It depends entirely on the context in which they are used by the consumer.

2. Identify opportunities in the purchase journey where touchpoints can work harder: b. To leverage purchase journey triggers where your brand underperforms c. To target more powerful places, spaces or conversations in the Active Stage d. To address the biggest barriers to purchase for your brand 3. Ensure the integration of message, media and context: integrated planning is more important than ever! 4. Leverage respondent level data from Momentum to target the audience that matters most for your business. Seamlessly optimize campaign weight and phasing through MEC’s ‘Crossmedia’ tool.

All companies want growth. However, finding genuine opportunities to grow your brand in a competitive marketplace is tough when rivals aggressively target the same consumers. Momentum helps identify the best possible prospects for increasing market share and the value of your brand. It allows you to compare your brand’s performance throughout the purchase journey against your main competitors, revealing their weak points and where they present the greatest threat. Momentum shows who should have bought your brand (based on Passive Stage Bias which failed to convert to an Active Stage purchase), which brand they bought, why they didn’t buy your brand and which touchpoints you should use to influence them (as shown opposite). Momentum also provides summary scores for each stage of the purchase journey and gives an overview of your brand performance within the category.

Flat Screen TV cycle

Active score 148

Momentum score 136

Passive score 102

Bought

Active Stage

At each stage of the journey, Momentum quantifies your brand’s performance within the category and against your competitors. It also provides the one number you need to know: your brand’s Momentum Score.

Showing us the size of the missed opportunity

Not Bought

3

UNDERSTAND YOUR COMPETITORS’ PURCHASE JOURNEYS TO UNLOCK BRAND GROWTH



IMPLICATION

16%

15% Missed

27% Opportunity 42%

Weak

Strong

Passive Stage bias Had some/no idea they would buy your brand ...but did Expected to buy your brand ...and did

Didn’t plan to buy your brand ...and didn’t Thought they would buy your brand ...but didn’t

Source: Momentum, Body Moisturisers, Germany, 2013

Momentum measures the whole purchase journey across the category 1. Quantify consumer biases in your category and by brand. 2. Quantify the beliefs people have about brands and how these influence them. 3. Quantify the actions people take during the journey. 4. Quantify the influence of Paid, Owned and Earned touchpoints encountered at different stages along the way. 5. Fuel strategies to unlock growth and help you measure results over time.

UNDER THE HOOD OF MOMENTUM Momentum methodology incorporates the latest thinking in decision-making psychology.

Momentum’s two-stage research process uses qualitative research to identify people’s buying behavior, followed by a custom-designed online quantitative questionnaire to understand a single category and country in detail. The research is designed using the latest studies on the psychology of choice: Automatic and reflective thinking: Momentum identifies the effects of consumers’ instinctive, automatic thinking as well as the more obvious rational, deliberate thinking because both are involved in decision-making. Confirmation bias: People look for information that confirms their beliefs. For example, people use Active Stage touchpoints to confirm their biases about brands. Mental availability: “The propensity for a brand to be noticed and/or thought of in buying situations”.* What associations do people have with your brand and do they help people make a purchase? Brand distinctiveness: Which of your brand’s properties make it distinctive? Which assets should your communication support to make your brand stand out from competitors? Heuristics: Momentum identifies rules-of-thumb people use when buying – what it is they’re looking for from the brands they choose. *”How Brands Grow”, Byron Sharp

To find out more... Global

Asia Pacific

Latin America

825 Seventh Avenue New York NY 10019 USA Tel +1 212 474 0000

Raj Gupta Chief Strategy Officer, Asia Pacific [email protected]

Cynthia Evans Head of Strategy, Latin America [email protected]

Europe, Middle East and Africa

North America

Pele Cortizo-Burgess Head of Integrated Planning, Global [email protected]

1 Paris Garden London SE1 8NU United Kingdom Tel +44 20 7803 2000

Damian Thompson Head of Consumer Insight, Global [email protected]

Stuart Sullivan-Martin Regional Director, Integrated Planning, EMEA [email protected]

Mason Franklin Head of Integrated Planning, North America [email protected]

1 Paris Garden London SE1 8NU United Kingdom Tel +44 20 7803 2000

Melanie Varley Chief Strategy Officer, Global [email protected]

18 Cross Street China Square Central Singapore 048423 Tel +65 6225 1262

601 Brickell Key Drive, Suite 804 Miami FL 33131 USA Tel +1 786 264 7600

825 Seventh Avenue New York NY 10019 USA Tel +1 212 474 0000

© MEC All content, logos and trademarks used within this publication are protected by copyright and cannot be used without permission from MEC or the permission of the relevant trademark owners.

How consumers really make decisions about brands and products, how your brand performs against your competitors, and what you can do about it!

THE QUESTIONS MOMENTUM CAN HELP YOU ANSWER  Are my customers’ journeys shorter and faster or longer and slower than other people’s?  Which customers have a bias towards my brand or its competitors before starting the buying process?  How are people’s perceptions of my brand affecting their purchasing behavior?  Which Triggers are more likely to get people to buy my brand?  What can I learn from my competitors’ purchase journeys?  How can I quantify the roles of Paid, Owned and Earned touchpoints at different stages of the purchase journey?  How do I quantify the role of recommendation and social influence for my brand’s buyers?  How does my brand’s behavior in-store influence people beyond the immediate sale?  How can I plan more effectively for brand growth?

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