Stages of the Buyer Decision Making Process: SEM Edition
Realizing that all search participants aren’t created equal is vital in understanding the fundamentals of conversion rates and putting together an effective PPC campaign. Our job as search marketers is to break down searchers into a number of different consumer segments, targeting them in the most effective way at the right price to maximize performance.
There are a number of reasons setting up campaigns by grouping tightly-related keywords into ad groups and customizing ads for each one is best practice. The relationships that are most often focused on are based on user intent, relating it to a specific landing page or product. For instance, you might group auto insurance keywords in one ad group and create an ad focused on this insurance area, and pointing it to the auto insurance page. The same thing would then be done for homeowners insurance, business insurance, etc.
Less common, but probably equally important when it comes to executing enterprise-level campaigns and achieving great results, is grouping and targeting based on stage in the buyer decision making process. While there are a number of variations of how to actually define the stages, they can essentially be defined as:
Targeting different stages of the buyer process is a frequently executed task on the keyword level. Whether you had to sit through the MBA lectures or not, it isn’t difficult to roughly differentiate the value of these keywords. Of course, the results will quickly help you out (likely one of those chicken-and-the-egg phenomenon), but the general logic follows that the closest to the “Purchase” stage people are, the higher the conversion rate is going to be.
How far the searcher is in the decision making progress is important to have in mind when structuring your PPC account. Let’s take a look at each step and how it might guide not only our bidding strategy, but also our ad copywriting and landing page selection to maximize the ROI on the account.
As an example, let’s say we’re working for a company that sells coffee makers.
This is the stage where buyers recognize the need for the service provided. In this example, we’re looking for people who are aware of the fact that they enjoy coffee, but are troubled by the fact that they are unable to make themselves in a convenient location.
This stage of the process isn’t typically done via search. Awareness typically happens outside of the search realm. Once people are aware of the product’s existence – or in other words have defined the problem they need to solve, then paid search advertising can start having a more effective impact. So, you’ll find this ad and these searches a bit ridiculous, and see why there isn’t really a market here:
User Intent: Become aware that coffee makers exist.
[making coffee at home] ($1.49)
[how to roast coffee at home] ($0.85)
This is the stage where buyers recognize the need for the service provided. In this example, we’re discussing people who know coffee makers exist, but really don’t know much about them. They’ve got to learn about coffee makers before they can start seriously researching and considering the possibility of making purchase.
Since we’re dealing with a product in this case which consumers are already fairly knowledgeable about, this step of the buyer decision making process is often skipped over from a search perspective. People could be interested in seeing what kind of features and options are available, but search volumes don’t show a big need there. In all likelihood, those features aren’t so much part of gaining research as they are the research phase.
User Intent: Learn about coffee makers
[how to make coffee with a coffee maker] ($1.73)
[what is a coffee maker] ($1.01)
If we were doing analysis on something people aren’t already very familiar with, this step in the process would make a lot more sense. For example, a marketing manager looking to hire a PPC professional would take a look at the pros and cons of hiring a PPC management company, how the contracts work, etc, before even researching the field to see who he or she might want to work with.
If “interest” keywords are targeted, CPC prices are lower, and there should also be content developed to provide information to the searcher. A lead company may try to get information from this searcher to sell it to a company who typically targets users farther down the decision making process, or a company could be providing that content to establish report and try to keep the user engaged throughout the rest of the decision making process. That can be tough, which is why search managers shouldn’t be willing to pay as much for users this early on in the process (greater chance for funnel abandonment).
In the research phase of the buyer decision making process, searchers are gaining deeper knowledge about the product or service. Now that they know what a coffee maker is and what it does, now they want to start looking at their options when it comes to purchasing one. They’ll look at the details and start narrowing down their options to decide what types of coffee makers they like.
Segmenting users in the “Research” phase from the “Shop” and “Purchase” phases is the most important differentiation to make when analyzing the stages of the buyer decision making progress.
It’s during this phase that they’ll decide if they want a one-cup coffee maker or a more traditional one. They aren’t necessarily looking to buy yet. What they really want to do is understand all their options, and develop a preference to help them in the shopping phase.
You’ll see a lot of “reviews” searches in this phase.
User Intent: Find what is wanted in a coffee maker
[best coffee makers] ($0.88)
[best home coffee maker] ($0.84)
[coffee maker reviews] ($0.50)
As an SEM professional, if you’re going to target these keywords, there should be a clear way to help transition customers from reviews to shopping and purchasing. Landing page testing and conversion funnels are big here. Once the user has read the reviews and done some research on your site, you need to easily let them shop for the specific product or service they are most interested in.
The research phase is a very popular affiliate space. The companies that sell the products aren’t typically built well to produce content in this space (as they shouldn’t – obviously reviews would look a bit biased), and if you can build an effective research site and conversion funnel, these searches can certainly turn into conversions.
It’s absolutely vital to link the steps though. At the end of the reviews, make sure they can “compare similar products” or “shop now” with price comparisons and options to get them into a shopping cart. If a user wants to find reviews and “research,” they’re going to. Don’t try to skip the step by targeting these keywords and bringing them right to your online store.
Online shopping continues to grow every year, and targeting users in this segment will result in the highest conversion rates. It’s also, in all likelihood, going to be the most expensive place too.
After the research phase, users have narrowed what they want down to a much smaller field. You’ll see more specific searches in this phase, targeting either specific brands or specific types of coffee makers. Here, there might be everything from general purchase searches to specific brands or types of coffee makers
User Intent: Which coffee maker should I buy?
[bunn coffee makers] ($1.61)
[Cuisinart coffee makers] ($0.92)
[single serve coffee makers] ($2.01)
[one cup coffee makers] ($1.97)
These searches cost 2-4 times as much as those in the research phase. People searching for products are more desirable than people searching for reviews. Users searching for reviews are unsure of what they want, and when that is the case, they’re much more interested in gathering information than they are getting their credit card out.
When advertising in the “Shop” space, it’s vital to have optimized ads, effective landing pages, high quality scores, and closely-monitored performance. These users are shopping and ready to buy, so make sure your website converts once they’re there. Users in this stage of the buyer process should convert. If they don’t convert, there’s a problem with your website, your products, or your prices.
The trick is identifying users in this phase to get them to the site. Websites who can be profitable here have the highest conversion rates, the highest quality scores, and the best ads. The environment gets very competitive. If you’re able to out-convert your competitors and get better CPC’s on similar searches, you’ll be able to win the PPC game, driving more volume and affording better placements than your competitors on popular keywords.
The necessary last step of the process is actually purchasing the product. From an SEM perspective, there isn’t much we can do here. The actual purchase takes place on other websites (until Google product search *really* evolves…), so when the buyer is deciding to actually make the purchase, it’s during checkout.
If we loosely define the actual “purchase” step, you could say users that are absolutely 100% positive they’re about to buy something as they sit at their computer right now are in this phase. Searches that might be classified in this area are those searching for “coupon codes” or “discount codes” (searches you generally don’t want to advertise on). Aside from that, saying we can influence the purchase stage as search marketers is a stretch at best.
User Intent: Give someone money. Get a coffee maker return.
How Analyzing the Stages of the Buyer Decision Process Can Be Beneficial
So what’s the point of this exercise? Just to recognize why market prices on these users are the way that they are? Not quite. If we’re able to segment users by where they are in the decision making process, we can customize the user experience to provide the most relevant content and push users along the conversion funnel to maximize conversion rates.
So, a few tips to go away with:
- Determine which keywords correspond to the different stages in the buyer process
- Target your ads towards the users in the stage farthest in the buyer process for each keyword (if there might be multiple stages)
- Customize the landing pages and user experiences based on the stage in the buyer process
- Engage users with effective landing pages and monitor how well users move through the conversion funnel
What if it isn’t simple to determine where users are in the buyer decision making process because several stages are represented. For example, what if you want to just bid on “coffee makers”? These are large volume, high-stake keywords.
That’s a whole other issue – one I’ll tackle in my next blog.