Advertising, Referrals, and Reviews: How Shoppers Decide Where to Spend

kathryn by Kathryn Hawkins on September 11, 2013
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Whether you’re selling products in stores or online, how do you influence potential customers to buy your goods?

If you aren’t sure how to answer that question, you may be focusing your efforts in the wrong place — and, as a result, wasting precious marketing dollars. So, before you spend another dime, take note of the various factors that influence shopper’s buying decisions.

Online Research

Early in the decision-making process, most shoppers — 78 percent of them, according to a Cisco survey — research specific brands and product lines online.

Are they culling your company’s website for information? Perhaps, but that isn’t the only place they’re looking. For example, an eMarketer survey of moms who use the internet found that only 7.7 percent trust a company’s marketing collateral and product descriptions when deciding what to buy. Everyone else, or a whopping 92.3 percent of respondents, relies on reviews by other consumers.

Personal Recommendations

Beyond reading online reviews by fellow shoppers, consumers also reach out to friends and family for advice. Cisco found that 60 percent of consumers ask for personal recommendations from their friends, and 23 percent solicit referrals through their connections on social networks and visit branded pages on Twitter, Facebook, and other sites.

Advertising

Slightly more than half of moms surveyed by eMarketer said their purchase decisions were influenced by a newspaper insert, and about one in four had picked up an item based on a TV or email ad. Internet advertising was the least effective: Less than 18 percent of shoppers said they’d bought a product after seeing an ad online.

Giveaways

Based on the research, online reviews and personal recommendations have more influence on consumers’ purchase decisions than paid marketing and advertising efforts. So, how can you encourage people to try your products?

In-store promotions are the most powerful way to get new customers to make a purchase, influencing 87 percent of consumers, eMarketer says. Many grocers allow vendors to set up tables and distribute free sample and coupons. Independent, guerilla-style tactics work, too: For instance, in 2011, Gordon Grade Coffee gave away its then-new Dr. Drip coffee to students at New York University during finals week. Online giveaways are another option: Many companies use tools like Rafflecopter to raffle off goodies through their websites or social media platforms.

Many marketers also send free products to bloggers with large followings, in the hopes of stimulating reviews. Although there’s is no guarantee of positive press (or any coverage at all), a good review can help your brand earn trust — and generate sales. A Mom Central Consulting survey found that 92 percent of mothers had purchased a product after reading about it on a parenting-focused blog.

The bottom line? Don’t blow your marketing budget on a fancy company website and traditional advertising. Get the word and your product out to as many people as possible — and let their reviews and recommendations do the advertising for you.

kathryn

Kathryn Hawkins is a business writer for Intuit and is passionate about solving small business problems.

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