The consumer decision-making process and behaviors within financial services are evolving rapidly in this era of macroeconomic disruption, and that’s a big problem for companies that are looking to win more customers. As the upheaval continues, conventional ideas about customer journeys and the path to purchase are not always keeping pace with the trends. To meet this challenge, we are applying a new methodology to customer journey work—our path-to-purchase approach—which was designed to expand the ways that we use analytical tools to capture consumer decision-making trends.
Inflation, one of the prevailing disruptive forces of the moment, leaves a particular mark on consumers—lower satisfaction. In financial services, like other service categories, consumers don’t get any sense of enjoying “more” when prices go up—it’s just a higher bill. When car insurance rates go up but it’s the same old car sitting in the driveway and same day-to-day use, consumer satisfaction is going to go down. When inflation across categories is squeezing budgets, shopping behaviors are going to change more dramatically.
Inflation is just one of the factors driving change in consumers. Shutdowns are no longer a threat, but COVID-19 continues to influence and reshape spending patterns, brand interactions and consumer preferences. Now we’ve got inflation crashing headfirst into pent-up demand, alongside supply-chain snarls and an ongoing war in commodity-exporting regions. Meanwhile, the labor market faces generational shortages and post-pandemic strain. The macroeconomic stress points are many.
It may be years before changing consumer behaviors are broadly characterized and understood amid this level of upheaval—but companies have to cope with the changes in real time. One major challenge is that some industries face higher demand than ever, like travel. Other industries are left with completely new standards for transactions—curbside pickups and online orders, more deliveries and fewer drivers. And, in household finances, credit use is surging as consumers turn to credit cards.
Amid these dynamics, many categories are facing a shorter purchase journey and a smaller share of True Shoppers—customers who are evaluating all of their options after having identified a need. For example, imagine a buyer who is looking for a new checking account and bank. Perhaps in the past they would be more inclined to actively shop and compare two or three options—but today, they are more likely to have made their decision before the trigger to open a new account even arises. They may still comparison shop, but it’s for validation. Their mind was already made up and they are just looking for data to validate and reality-check their choice before purchasing.
Choosing a bank is one example of this behavior, but it’s appearing across many categories. Consumers are using more shortcuts. They are overwhelmed by the level of change in their lives and they are turning faster and harder to leading brands or favorites.
With these dynamics in mind, our path-to-purchase approach targets two things—realistic, useful consumer decision-making maps, and insights about when and how in the purchase journey to devote resources toward changing perceptions. These two elements give financial service companies the tools to make an action plan for winning new customers and growing their business.
To do this, we balance the focus of consumer research to capture those key customer behaviors higher in the funnel. In that respect, it puts more emphasis than traditional customer journey work on the shoppers who did not get down to the comparison-shopping point. It’s emphasizing those who pre-selected other brands or validation-shopped to finalize their decision.
To construct that realistic and useful map, we put our network-modeling tools to work. Consumer decisions are not linear; shoppers often iterate through the decision process to get to their final choice. Our approach captures the network path that buyers take for a specific product. This process also digs into the barriers customers perceive at each customer journey stage and how those trends fit into the latest thinking in behavioral science.
These inputs give financial services companies a specific kind of information: the actionable kind. With a complex picture of how consumers interact with a brand at different touchpoints, companies can make informed decisions about how to allocate their marketing resources for the greatest impact—even as the upheaval continues.
For more information, download Want to Win More? Your Guide to Boosting Customer Growth Using Our Award-Winning Path-to-Purchase Approach.