How Much Do You Really Know About How Your Customers Make Decisions?

Welcome back to another edition of the 'Now That's CXy' Newsletter where we aim to educate on the nuances of Customer Experience and its value to amplifying growth to your business.

In this edition, we'll discuss an often-ignored concept of understanding the Customer Decision Journey (CDJ) - how customers make decisions to solve their problems. This should not be confused with Customer Journey Mapping/Analysis (CJM). So, let's understand the difference before we get into the strategic importance of understanding the Customer Decision Journey (CDJ).

The CDJ describes the process a customer goes through from the moment they become aware of a need or problem, to when they make a purchase, and even beyond that into post-purchase behavior. It is not a linear process like CJM, recognizing that customers often loop back to previous stages, engage with multiple touchpoints, and may not follow a straightforward path. The CJM is a strategic tool used by businesses to visualize and analyze the entire experience a customer has interacting with their brand FROM THE CUSTOMER's PERSPECTIVE (you'll find out why I'm shouting shortly). It includes mapping out every interaction (or touchpoint) the customer has across various channels and stages of their journey, from initial awareness of your business to post-purchase follow-up. The goal is to understand the customer's needs, emotions, and pain points at each stage, and to identify opportunities to improve the overall experience so it results in customers buying more, staying longer and telling others. Now That's CXy!

A Popular Mistake made by Businesses

In this space, a popular mistake made by many businesses is two-fold: they don't do the work (or own the capability) to understand how their customers decide to solve their problems (CDJ); AND, they don't analyze the experience their customers have in their journey of interactions with their business from the customer's perspective. This was confirmed by research from unipro solutions GmbH & Co. KG and our last guest speaker on the #IAMCXPodcast episode with Eckhart Boehme . Eckhart's research uncovered that there is a ~70% gap between the confirmed knowledge a business has about their customers and what they don't. Many times, leadership teams make strategic decisions and investments based on their own confirmed cognitive biases without an exploration into anything unknown.

As an oversimplified example, think of the difference as knowing a customers' mental, emotional and decision-making process (and influences) vs. knowing what they experience when they interact with your business. That's what's missing from strategy. Now That's CXy!

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Now, let's understand why it's important t understand the Customer Decision Journey.

Targeted Marketing: In the awareness stage, businesses need to create brand awareness through ads, content marketing and social media because knowing where customers discover new products or solutions helps in targeting the right channels. In the consideration stage, potential customers compare different options so providing detailed info, reviews, and comparisons can influence their decision. In the decision stage, offers, discounts, and strong calls to action can push customers towards making a purchase. In the purchase stage, streamlining the purchase process to reduce friction and making it as easy as possible can increase conversions. In the post-purchase stage, follow-up communication, excellent customer service, and loyalty programs can encourage repeat business and referrals.

Personalized Customer Experience: Personalization increases customer satisfaction and loyalty expression and by understanding individual customer journeys, businesses can tailor their interactions and offerings to align with specific needs and preferences.

Resource Allocation: Understanding the journey helps businesses allocate more efficiently like investing more in stages where customers drop off or trigger defection.

Competitive Advantage: Companies that understand and anticipate customer needs can outperform their competition by offering uniquely superior customer experiences.

Customer Retention and Loyalty: Engaging with customers beyond the initial purchase, through follow-ups and support, helps in building long-term relationships and loyalty. Now That's CXy!

For further reading, check out:

• McKinsey & Co.: "The Customer Decision Journey"
• Harvard Business Review: "Competing on Customer Journeys"
• Forrester Research Reports on Customer Journey Mapping
• Google Consumer Barometer: Insights on Consumer Behavior

So, is there really a gap worth worrying about?

There is substantial research indicating that a significant portion of a customer's decision to buy is made BEFORE direct contact with a business. Google's Zero Moment of Truth Study found that 88% of consumers conduct research online before making a purchase, even when buying in person. Therefore, many decisions are made before they reach out to your business based on info they gathered themselves. Even in B2B, Corporate Executive Board and google research shows that B2B buyers are usually 57% into their buying process BEFORE they make initial contact with a vendor. HubSpot Consumer Behavior Research found that 60% of consumers start their product research with a search engine BEFORE heading to a specific website. If you don't know these decision-influencing behaviors, you lose customers before they know you can be a solution.

Accenture research reveals that 80% of executives believe their companies understand the customer journey well, but only 50% of customers agree. Salesforce found that 59% of customers say companies don't tailor their experience based on past interactions (low personalization). This just underscores the gaps and the need for companies to adopt a more dynamic approach to understanding and interacting with customers at critical touchpoints.

Bottom line - if a strategy or metric starts with the word 'Customer' (like Customer Experience, Customer Service, Customer Decision or Customer Journey), there is a strong likelihood that what you believe, or think is irrelevant and underinformed. Since this will also involve much data analysis, a solution that's available to businesses now is Voice of Customer technology like our SANDSIV + where, using Insight Narrator, the platform will provide feedback from the customers perspective about their actual Customer Journey in real-time so the business can pivot quickly to align with customer goals. That means...Less blind spots and more clarity on how customers make decisions and how they behave. Now That's CXy!

That's it for this edition of the 'Now That's CXy' newsletter. We hope you found it informative and share-worthy. Feel free to subscribe and share comments or insights as our goal is to educate as many people as possible....and save the world with Customer Experience. As usual, have a good day and Go WiN!

Always yours in Customer Experience,

Roger