how has social media impacted consumer behavior
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How has Social Media impacted Consumer Behavior?
3rd Dec 2013 Rawan Aloul | @1108020835 | Consumer Behavior Marke@ng
1/4 of your day is spent on Social Media!
Shift into the Digital World!
Before 1999 2010 Onwards
Shift into Self-Publishing!
Today you are empowered!
WOM Before Known as Bandwagon or
Snowball Effect
WOM Today
Social Media Amplified Word of Mouth!
• Social Media has revolu@onized the reach & impact of WOM • Its no longer an act of in@mate 1-‐to-‐1 communica@on • Users can now disseminate informa@on at a click of a buNon • ShiO from content users in to content creators
Search before Social Media
Search a"er Social Media Wikipedia, news pages, Facebook, pictures from social networks, etc..z
Results mainly limited to company’s website
Example of Audi Search
Rise of Influencers • Consumers empowered to share informa@on, and become influencers • Law of the Few by Malcolm Gladwell explains different types of
influencers who can make ideas go viral today. • He classifies them into three types of people:
CONNECTOR Connects people to
each other
MAVEN Connects people through sharing knowledge
SALESMAN Uses knowledge to
engage and persuade
• Websites such as Klout, Kred or PeerIndex measure the level of social influence of an individual & assign a score out of 100.
• Based on how people engage with the content he/she creates. • Brands & Marketers use this informa@on to seek and hire influencers to be
their word-‐of-‐mouth transmiNers.
Rise of Influencers, cont’d
Barack Obama has ac@ve TwiNer & Facebook profiles & the most
important Wikipedia page online.
99
J.B. has one of the most engaged TwiNer accounts, but his Wikipedia ranking is much lower than President
Barack Obama’s.
92
Zooey Deschanel highly ac@ve on
Facebook, TwiNer and other SM channels.
86
Klout.com
• TradiIonal Purchase Decision Journey – Linear approach; Funnel analogy – Based on pushed Marke@ng driven by companies – Assumes ini@al large set of poten@al brands which narrows down to one according to consumer’s needs and preferences
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Consumer Decision Journey
• Revised Purchase Decision Journey – Consider ini@al set of brands – Add or subtract brands as they evaluate what they want – Ul@mately select & buy a brand – Express and share their experience online
• Dynamic, influenced by others, cyclical • Loyalty loop; contribute opinions and experiences thru social media • Based on Pull or Consumer-‐Driven marke@ng strategies
Consumer Decision Journey, cont’d
• Consumer driven marke@ng (part of which is Social Media, such as Internet reviews & WOM recommenda@ons) now takes up 2/3s of the touchpoints in the purchase decision making process (unlike tradi@onal marke@ng or mediums which make up 1/3).
Consumer Decision Journey, cont’d McKinsey Quarterly 2009 Number 36
Two types of loyalty
Exhibit 4
Where it counts
Q3 2009Consumer decision journeyExhibit 4 of 4Glance: Two-thirds of the touch points during the active-evaluation phase involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family.
! " # $ % $ & '
Where it counts
1Based on research conducted on German, Japanese, and US consumers in following sectors: for initial consideration—autos, auto insurance, telecom handsets and carriers; for active evaluation—auto insurance, telecom handsets; for closure—autos, auto insurance, skin care, and TVs; figures may not sum to 100%, because of rounding.
5
Initial-considerationset
Active evaluation
Closure
Most-influential touch points by stage of consumer decision journey, for competitors and new customers, % of effectiveness1
Store/agent/dealer interactions
Consumer-driven marketingWord-of-mouthOnline researchOffline and/or print reviews
Past experience
Company-driven marketing
Traditional advertisingDirect marketingSponsorshipIn-store product experienceSalesperson contact
1226
37
10
26 22
31
4321
28
39
Shifts in Communication
• Degree of SeparaIon – ShiO from six degrees of separa@on to almost half (3.74 degrees as per
study by Facebook) – Friendship norms redefined & friendship circles expanded – Average Facebook friends reached 318 for the Millennial genera@on
• Degree of publicity – Tendency for people to become public with their personal informa@on
and day-‐to-‐day ac@vi@es – Social graphs becoming public
• Five Degrees of Social RelaIonships – Constructed new degrees of rela@onship between people – Rela@onships of different dynamics and characteris@cs
Category DescripIon Inner Circle Personal contacts with frequent personal
interac@on such as friends, family, neighbors, work peers.
Social Friends Frequent personal contact, mostly online interac@on, video chats, social networks etc.
Acquaintances Infrequent contact via social networks, mainly focused on business rela@onships, e.g. business colleagues on LinkedIn
Followers -‐ Colleagues
Impersonal remote rela@onship. Two-‐way ac@vity, e.g. reading each other’s blogs, followers on TwiNer, etc.
Followers -‐ Compe@@ve
Impersonal remote rela@onship. One-‐way ac@vity where one monitors the ac@ons of another such as compe@@ve analysis
Shifts in Communication, cont’d
Start your own business today!
Instagram • One of the fastest growing social media outlets with 150+ million monthly ac@ve users & 55 Million photos shared every day.
• The new gateway for Entrepreneurs.
Easy Access to Entrepreneurship
I know what you ate last night!
Social graphs can be traced online to determine a person’s
likes and dislikes!.
Brands are now empowered! New Facebook Graph Search allows users to search for ac@vi@es, check-‐ins, status updates, events aNended, likes and dislikes, etc. e.g. People who like Horror Movies
Thank You!
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