Innovate or Die: Understand your customers’ decision-making process

Innovation

You probably wouldn’t guess that someone who grew up on a rural Nebraska pig farm would be an ideal candidate to grow a major advertising firm.

But that’s how Dan Nelson, chair of Milwaukee-based marking agency Nelson Schmidt Inc. and entrepreneur extraordinaire, would describe himself.

His accomplishment was taking a small ad firm and growing it into a major player in a highly competitive industry on a national and global scale.

The traditional advertising industry was what we see on Mad Men: smart ad executives pitching clever ads to businesses.

Dan Nelson had a better idea.

When he was looking to grow his agency, he recognized that the world was changing and the Internet was becoming a way of life. Why not look for a competitive advantage leveraging the horsepower of this new technology?

An example of work done by Nelson Schmidt Inc. for the Wisconsin Economic Development Corp.
An example of work done by Nelson Schmidt Inc. for the Wisconsin Economic Development Corp.

He found if he could aggregate data on why customers made purchases, the agency could use that information to laser focus how it marketed and advertised.

This approach called for deep understanding and mining of customer habits to target advertising to appeal to that base. It goes on the assumption that all customers engage in what is now called “considered purchases,” or purchases of products and services that typically have high degrees of emotional risk and/or reward.

With the exception of impulse purchases, most consumers actually go through a fairly complex purchasing cycle and are influenced by a variety of factors, some conscious and some unconscious.

Nelson explains that in order to make real connections with consumers that influence their decisions, you have to understand who they are, what their motivations are and how they go about choosing a brand. Influencing a person to buy a pack of gum requires a vastly different marketing approach than influencing a person to buy life insurance, or a business to invest in a new payroll service, for example. These influences apply whether the seller is targeting a business or a consumer.

Understanding that information is pure gold and translates into a more focused ability to appeal to the customer.

What matters most is understanding the customer mindset as they take their journey toward a decision. Driven by this insight, Nelson’s team developed a more focused, considered purchase marketing approach that taps deeper into buying behavior.

That, in turn, gives the agency a competitive advantage. It can point to facts that give it and its clients unique perspectives into the complexities of these customer journeys. In B2B, almost every purchase is a considered purchase because so much is riding on every decision. In many instances, individual consumers are going through the same types of thought processes in order to make certain purchases. They’re taking their time. They’re seeking out more information. They’re doing research.

So the agency is positioned with the knowledge and capabilities necessary to eliminate traditional B2B vs. B2C restrictions and speak to the cognitive and emotional processes rather than an arbitrary categorization.

They illustrate this on their website and it has value to all sellers of products or services as it tracks the customer mindset when it comes to purchasing anything meaningful on the planet.

Once the seller understands the mental journey his consumer goes through on a purchase, it helps fine tune how to go about appealing to those consumers. That translates into better use of advertising and marketing dollars.

Nelson Schmidt illustrates the journey right on its website and all of us can learn from it.

STR-Steininger-Graphic

It puts the consumer and her purchasing journey at the forefront before the seller’s obvious pride in what he offers and what he makes.

Here’s what you must be able to answer if you are to successfully drive new products and services in your company:

  1. Do you understand the journey your customers take before acquiring your product or service?
  2. Do you understand who and what influences their behavior and their decisions?
  3. Do you understand the best method to reach them with your message?

The core of innovation is to fully understand the problems of customers from their viewpoint. That leads to creative solutions, as Dan Nelson and Nelson Schmidt have demonstrated.

-Dan Steininger is the president of Milwaukee-based BizStarts; a lecturer on innovation tools at the UWM School of Continuing Education; and president of Steininger & Associates LLC. He can be reached at: Dan@BizStarts.com.

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Dan Steininger is the president and founder of BizStarts. He is also the president of Steininger & Associates. The firm focuses on teaching the tools of innovation to drive growth for companies in all sectors of the economy. Steininger is a former president and CEO of Catholic Financial Life and a graduate of Marquette University and Boston University's School of Law.

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