Report: What Influences Consumer Purchases?

We just published a Temkin Group data snapshot, What Influences Consumer Purchases?

This study shows that social media has gained ground since last year, but is still not a top influencer. We surveyed 10,000 U.S. consumers to find out what information sources they use to purchase autos, cell phones, computers, credit cards, health plans, insurance policies, and televisions. The analysis looks at sources such as Facebook and Twitter, discussions with friends and employees, discussions with company employees, and information on various websites. Our analysis examines differences across age groups and analyzes changes over the last year.

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We start the analysis by examining the degree to which social sources—Facebook and Twitter, ratings and reviews websites, and discussions with friends and family— are influencing purchase decisions. The online social media sources remain relatively low on the list, but Facebook and Twitter gaining ground (as you can see below in figure 2 from the report).

The data is rich with insights into how consumers of all ages make purchase decisions. Here are some of the highlights:

  • Autos: More than two-thirds of consumers rely on their discussions with employees at the dealership. While this source is one of the top two across age groups, it’s particularly important for consumers who are 45 and older.
  • Cell phones: Last year as well as this year, interactions with employees are at the top of the list. This is becoming even more important for consumers younger than 35.
  • Computers: Across all age groups, consumers rely more on discussions with store employees than on information from Facebook or Twitter users.
  • Credit cards: On average, respondents use information on the credit card website more than they use any other source.
  • Health plans: Across all age groups, the most used source of information is either discussions with health plan employees or information on the health plan websites.
  • Insurance policies: Almost two-thirds of those surveyed said that discussing options with insurance agents is helpful. Agents are particularly influential for consumers who are 25 and older.
  • Televisions: Fifty-six percent of respondents said that reviews and ratings on sites other than the retailer’s or the manufacturer’s are helpful. This is the most useful information source for consumers who are younger than 45.

This data snapshot contains the following 15 charts:

  1. Social Influences on Purchases
  2. Social Influences on Purchases, Changes Since 2011
  3. Information Influences on Computer Purchases
  4. Computer Purchases, Changes from 2011 to 2012
  5. Information Influences on Cell Phone Purchases
  6. Cell Phone Purchases, Changes from 2011 to 2012
  7. Information Influences on Credit Card Decisions
  8. Credit Card Decisions, Changes from 2011 to 2012
  9. Information Influences on Insurance Purchases
  10. Insurance Purchases, Changes from 2011 to 2012
  11. Information Influences on Television Purchases
  12. Television Purchases, Changes from 2011 to 2012
  13. Information Influences on Health Plan Selections
  14. Health Plan Selections, Changes from 2011 to 2012
  15. Information Influences on Automobile Purchases

Download report for $195

The bottom line: Social media is not yet a key input to purchase decisions

Mobile Drives Daily Facebook Use

Earlier this week, I tapped into a recent research report—Data Snapshot: Communications and Media Benchmark— to write posts about Facebook usage by age, gender, and ethnicity. Well, my Facebook analysis continues…

There has been some concern raised about Facebook’s revenue projections because of the growth of mobile, which does not provide Facebook with the same revenue streams. Given the hubbub, I decided to look at the mobile usage of Facebook.

It turns out that a large percentage of daily Facebook users, who are mostly younger consumers, are reading Facebook on their phones.

The bottom line: Mobile drives daily Facebook usage

Data Snapshot: Social Media And Mobile Adoption

We just published a new Data Snapshot: Social Media and Mobile Adoption that provides details of how often U.S. consumers do a number of social media and mobile activities. Here’s the description of the research:

As part of Temkin Group’s Q4 2011 Consumer Benchmark Survey, we asked 5,000 U.S. consumers about their social media and mobile activities. This data snapshot looks at how many consumers perform activities such as update their status on Facebook, send a tweet, read an online product review, or invite someone to join their LinkedIn network. The data also shows how frequently they do these activities and the differences across seven age groups of consumers.

Download report for $195

The data snapshot if full of facts and figures. Here are a handful of factoids that I pulled together from the report:


The data snapshot has 13 data-rich graphics. Here’s a partial view from two of the figures:

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The bottom line: Social medial and mobile adoption differs widely across age.

Stats On Social Media Activity

Temkin Group and Peppers & Rogers Group teamed up to survey companies about their social media efforts. Check out this Peppers & Rogers article with interesting findings from the research: How Does Your Social Strategy Stack Up?

In this post, I’m examining data from the 68 respondents from companies with annual revenues of $100 million or more. I put together five slides with data that I felt was interesting. Here are some of the highlights:

  • Only 21% of respondents have connected social media into their operations while 26% are doing very little about social media at all.
  • The top obstacle they identify is connecting social media efforts to hard-dollar returns.
  • Only 6% of respondent think they’ve achieved significant business results from social media and 20% have seen very little benefit.  But many are still hopeful; 38% expect to gain significant benefits within three years.
  • The benefit that is most frequently measured is an increase in engagement, using metrics like time on site or number of friends/fans.
  • Social media is led by a functional leader in 44% of firms and by a social media leader in 21%.
  • Marketing “owns” more than half of the social media efforts. But 62% are using social media for something in customer service.
  • The top three social media activities are: providing links to relevant content, providing reactive support when customers complain, and integrating social media marketing with other marketing channels.
  • Nearly 60% of  companies encourage some employees to use social media, while 25% encourage all employees to use it. But all of that social media might be problematic; only 60% have social media guidelines and in place and only about 40% provide social media training to employees.

The bottom line: Companies have not yet mastered social media

A Glimpse At Social Media And Mobile Adoption Rates

As you prepare for 2012, it’s likely that social media and mobile are making their way on to your agenda. And they should. These channels are growing and are particularly important if you are targeting a young audience.

We’re working on a report for early 2012 that examines adoption levels and frequency rates of use for numerous social media and mobile activities. The analysis will dig into differences across consumer demographic segments. Here’s an early glimpse at some of the high-level data:

Here’s that same analysis done for just 18 to 24 year-olds:

As you can see, there’s a dramatic difference in adoption rates, especially when looking at mobile activities.

The bottom line: You need to look at social media and mobile if you want to reach younger consumers

Report: Social Media’s Limited Affect On Purchase Decisions

We just published a new Temkin Group report, Social Media’s Limited Affect On Purchase Decisions.

Social media is a very popular topic, so we explored the role that it plays in how consumers make their purchase decisions.

Here’s the executive summary:

What affect does social media have on purchase decisions? We examined this question using a survey of 6,000 US consumers. Based on their responses, we calculated the Temkin Purchase Influence Index (TPII) to gauges the level of influence that these channels have on the purchase and selection decisions of computers, cell phones, TVs, insurance, health plans, and credit cards. While the overall results show very few areas where social media has a strong influence on these purchases, a deeper analysis of consumers by age, income, ethnicity, and education uncovers pockets of stronger (and weaker) social media influence.

Download report for $195

Here’s a chart from the report that highlights the overall affect of social channels:

Here are some additional insights from our analysis of the TPII across different consumers based on their age, income, education, and ethnicity:

  • Computers: Social influence is strongest with African Americans
  • Cell phones: Social influence is stronger with 30 year-olds
  • Credit cards: Social influence is strongest with Hispanics
  • Insurance: Social influence is strongest with low-income consumers
  • Television:  Influence of discussions with friends and families goes down with education
  • Health plans:  Ratings and reviews influence goes down with education

Download report for $195

The bottom line: Tailor your social strategy to your product and target customers

How Much Does Social Media Matter?

My previous three posts identified companies that were susceptible to backlash on Facebook, Twitter, and 3rd party ratings sites. Since we’re on the topic of social media, I thought I’d share my view on the role of social media in customer experience efforts…

In the recent Temkin Group report, How Consumers Give Feedback, we found that not many consumers used social media to discuss their very good or very bad experiences. In the report Customer Experience Accelerates In 2011, we found that only 31% of  large companies think they’re doing a good job with social media and 79% expect to increase their focus on it this year.

Is this a complete mismatch of priorities?

My take: In some companies, social media is definitely over-hyped. But in others, it probably doesn’t get enough attention. As often is the case, the insight is in the details. Here are my observations:

  • First of all, I am not looking at any of the pure marketing use-cases for social media.
  • Most companies still don’t understand social media; which leads them to think that they are way behind others. This is especially true since only the extreme cases about what companies are doing show up the media.
  • Since many companies aren’t doing too much yet in social media, the increase in focus in 2011 may not mean that it is displacing a lot of other activities in the company (data-oriented folks would call it a large increase on a small base).
  • For most companies, there’s a goldmine of insight that has yet to be tapped from direct feedback from customers. Although only 34% of consumers told companies about very bad experience and 21% told them about very good ones, this is still a higher rate than feedback via any social media channel.
  • The use of social media is still rising, so it will continue to grow in importance.
  • The use of social media varies widely by consumer segment and activity. So companies need to understand their customers to figure out how important social media is to their business.

So here are a couple of my direct answers:

  • Should companies be looking at social media? Absolutely.
  • Is social media the most critical improvement area for customer experience? Absolutely not.

Since many companies are being aggressive with their social media efforts, I wanted to share some advice from an article that I wrote for 1to1 Media called Customer Experience Common Sense: From 1 to 6. It’s about keeping your perspective:

  1. Don’t ignore existing customer conversations. While it’s exciting to think about social media, you probably already have a goldmine of untapped customer conversations in your contact center. Don’t get distracted from mining insights from existing calls, emails, and chats.
  2. Listen first, long before you start responding. Once you start listening to social media, you’re bound to hear some things that aren’t flattering. Don’t start getting involved in those conversations until you understand what you’re really hearing and who’s saying it.
  3. Don’t overreact to Dave’s Guitar. In July 2009, Dave Carroll posted a video on YouTube about how he and his guitar were mistreated by United Airlines. It’s been a big hit; with more than 10 million downloads. The reality is that even great companies periodically deliver bad experiences. So you can’t plan a strategy around one poorly treated customer who happens to be a talented musician and filmmaker.
  4. Get brand promoters to speak for you. The best use of social media is getting adoring customers to sing your praise and defend your brand when others attack it. So find ways to create, identify, and motivate promoters to more actively engage wherever possible.
  5. Don’t lose sight of who you are. The best social media efforts support a well-defined brand strategy. So make sure you have a clear understanding of your brand promises and your target customer segments before diving too deeply into social media.

The bottom line: Social media is a long-term trend, not a short-term panacea

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