How to Use Data Driven Marketing to Overcome Purchase Barriers - dummies

How to Use Data Driven Marketing to Overcome Purchase Barriers

By David Semmelroth

People consider a variety of factors when they shop for a product and data driven marketing can help you with identifying purchase barriers. What does it cost? How easy is it to buy? Is it high quality?

If you’re trying to convince a shopper to go ahead and purchase your product, you need to understand what might prevent them from doing so. Your data driven marketing strategy for marketing to shoppers will be largely defined by the purchase barriers you’re trying to overcome.

Data driven marketing identifies purchase barriers

Some purchase barriers might be obvious to you. If you sell a high-end product, you probably know that price is an issue for many potential consumers. You may have a new product that hasn’t been sufficiently advertised, making consumer awareness an issue. The American auto industry suffered for years with a perception issue. Many people viewed American cars as being of inferior quality compared to their Japanese and European competitors.

Some barriers may not be immediately obvious to you. Your frontline sales staff is an excellent resource for helping you understand why customers shop but don’t purchase. Because they’re dealing directly with customers, they typically know where the sale breaks down.

Similarly you may be able to learn something about purchase barriers by analyzing the way customers use your website. For example, what was the last thing the customer looked at before they abandoned your website?

Survey research is a particularly effective tool for learning about purchase barriers. Small focus groups can also provide some insight because they allow the interviewer to dig deeply into consumer attitudes. Customers know why they didn’t buy. So ask them.

How to use data driven marketing with different types of barriers

Think about purchase barriers as being in one of three general categories:

  • Cost: Pretty much everyone checks the price before buying.

  • Perception: This relates to how the consumer views your product and how it fits in with their needs.

  • Convenience: This relates to how easy it is for the consumer to purchase the product.

Cost-related barriers

Some people are extremely price sensitive. They look for sales and discounts and rarely purchase anything without some financial incentive. You probably need to offer some sort of discount to incent price-sensitive shoppers to make a purchase.

Another group of consumers are more oriented toward quality or service levels. These consumers are willing to pay top dollar for premium benefits. Your approach to shoppers in this category should be to communicate those benefits. You want to show them what they’re getting for the money.

Frequently, you won’t have information on the price sensitivity of your shoppers. In these cases, a hybrid approach may be your best option. You could first contact your shopper with a message highlighting the value they’re getting for the price. If that doesn’t work, send a follow-up offer with a discount or some other promotional rate.

With shoppers, the first step is to get them to do business with you. Once you do, you can work on expanding your relationship with them. There are a variety of ways to upsell and cross-sell products to your customers to increase their profitability. Given the potential future revenue stream, using discounts to attract shoppers is effective and easily justifiable.

Perception-related barriers

One type of perception-related barrier is actually a lack of perception. Consumers may not even be aware that you sell a certain type of product or service.

Perception-related barriers often have to do with negative views of your product, such as the troubles of the auto industry related to quality concerns. Overcoming preconceptions about quality can be quite difficult, especially if the perception is rooted in fact.

When you address quality concerns, it’s a good idea to let someone else do the talking. The credibility of your brand is what’s at issue. Customer testimonials are one way to do this. Another is to communicate positive results of customer satisfaction surveys. Still another is to play up awards that your products have received.

This approach played a large role in the resurgence of the American automotive industry. When the roots of their quality issues were addressed, these companies began to get some positive reviews. And they played them up for all they were worth.

Another dimension of perception barriers is people’s sensitivity to what’s “in.” There’s an expression related to country music: “I was country when country wasn’t cool.” The country music industry has been incredibly successful at overcoming negative sentiment related to the genre.

Whether it’s the latest tech gadget, fashion craze, or book, people like to feel like they’re cool. In positioning your product as socially relevant, images are very helpful. Use pictures of “cool” people using your products. Social media is also very useful.

The convenience barrier

Another type of barrier relates to convenience. The entire fast-food industry is based on our being in a hurry. Whether it’s short lines, streamlined applications, or easy checkout, you need to communicate these conveniences to your customers.

Many companies have lost business by not keeping up with the advances in e-commerce. Going into a bank to fill out a paper loan application is much less convenient than doing it online.