February 22, 2018
by Carla Johnson
It’s more than one thing that makes a customer decide whether or not they’ll buy something. People are multidimensional – they respond to the combination of big and small factors.
Marketers use to be able to rely on things like demographic information and financial characteristics to predict how customers would behave. But with increasing globalization and how much we use technology, this approach is out of date.
These are some of the points that the KPMG Global Customer Insights group covered in the report Me, My Life, My Wallet.
More smartphone users mean more data. It’s this data that tells complex stories of customers’ lives. But past behavior doesn’t necessarily predict the future like it once did. The authors call actions that people take on smart devices short-wave signals – they give us little information about why customers make certain decisions.
Then there’s long-wave signals, the five outside events that make a difference in how someone buys something – social, technological, economic and market, political and regulatory, or STEP. They impact people’s experience, influence values and behavior, and give brands context for what motivates a buyer. Long-wave signals are how companies can get context around how people connect to each other and the world in general. Each generation has its own STEP events and these signals shift and emerge over the life of a customer.
Same generation, different STEPs
Just because a customer base comes from the same generation, doesn’t mean they share the same STEP events.
Let’s look at an example.
Baby boomers in the United States were born under a relatively stable democracy with a booming economy and rapidly growing middle class. These were times and events that dramatically changed the way Americans lived. Families welcomed color TVs into their living rooms and an interstate system that made cross-country travel accessible and comfortable.
The following decades saw the civil rights movement, the Vietnam War, the feminist movement and the first man on the moon.
But youth in China during this same time had a very different experience. They grew up under the communist reign of Chairman Mao Zedong. The telephone arrived in China roughly half a century after it reached 3 million U.S. users. Zedong’s efforts to modernize the country while still maintaining communism ended up paralyzing the country both politically and economically.
Getting to the root of “why”
This is why marketers cannot use the same approach to connect with the same generation. We have to take into account the STEP events and how they impact the ways people spend money, what they prioritize and why. To be successful, we can use STEP events to get deep into the root cause of what motivates them to buy and, most importantly, why.
Photo credit: Pixaby