- but the internet is fast becoming a strong influence -
The 'grapevine' is still the most powerful influencer of purchasing behaviour, according to new research from KPMG Consulting. Advance findings from the report*, "Customer Management – Who Manages Whom?", out next Thursday show that talking to friends was a more important source of information than looking at advertising or brochures, calling the company or surfing the Net. 59% of respondents would talk to friends when thinking of changing telephone company and 54% when considering changing supermarket. However the internet is fast becoming a major influence in gaining information, with 17% of respondents claiming they would surf the Net when considering changing utility company and 12% for information on phone companies.
When making a major purchase, such as a car or holiday, talking to friends was again extremely important - 84% stated they would talk to friends when thinking about booking a holiday and 73% would discuss buying a car with friends. Here, the internet was also showing signs of increasing use, with 36% of respondents stating they would search for holiday information on the Net and over a quarter would search for car details online.
Other main findings include:
- Youngsters are also more likely to purchase goods via the internet - nearly a third of respondents aged between 16 and 34 had purchased goods online, as opposed to 10% of those aged over 55
- The main advantages of using the internet to make purchases were seen as convenience (36%), wider choice (24%) and speed (18%). Price was relatively unimportant - coming joint fourth on the list of reasons given
- Companies have one chance to get it right - when asked what they would do if an internet transaction fulfilment fails, the most popular option was ‘cancel and refund’
- The Net has made significant inroads as a shopping channel, with one in five respondents stating they have made an internet purchase in the last twelve months. The most popular purchase made online in the last year was books - bought by 7% of respondents, 6% had purchased music or video products and just 1% of respondents had bought financial services.
Louise Fletcher, Partner in charge of Customer Management at KPMG Consulting commented: "Clearly, word of mouth is a vital way for companies to attract new customers. While conventional marketing still has an important role to play in raising awareness and building a brand among customers, companies need to pay attention to the importance of ‘talking to friends’ as a key influence on changing supplier. Companies need to consider this hidden channel and how they can harness this influence, looking, for example, at creating advocates within their customer base.
James Rodger, principal consultant at KPMG Consulting commented: "In addition, the web can be used to encourage interaction between friends and web communities. For example, companies could make more use of online chat rooms or customer forums, especially by incorporating these onto their own web site, in order to provide the 'human contact' that customers obviously rely on and trust. Companies are then able to provide all the information that a customer might require before making a purchasing decision - from suppliers' specifications to customers' actual experiences - through one easy 'customer portal'. And, by making this information available through one easy interface, it is possible to better position the internet as a true influencer of customers."
* Research was carried out by Simpson Carpenter during May 2000 among adults in the UK. 750 people answered a range of questions about their dealings with companies in the following sectors: utilities (gas and electricity), telecoms (including mobiles), banking and grocery retail.
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