Kim Warren on Strategy
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Strategy Dynamics Briefing 40: The customer choice pipeline
Resources do not just develop within an organization, but may do so before becoming an active part of the business. It is very rare in practice, for example, for customers to be simply switched from “potential” to “active” as implied in Briefing 20. Most often, customers must be moved through a number of stages. Similarly, employees may have been aware of a potential employer for many years before choosing to seek employment, and this dynamic of building awareness and understanding can have a big impact on an employer’s success in hiring the people it needs. The process of customer development has long been recognized in the marketing field. One of the simplest early models of customer development, affectionately known as “AIDA” depicts the winning of customers as working through four stages: gaining their attention, attracting their interest, stimulating desire and finally motivating them into action to purchase the product. Later developments of this idea expanded on these transitions – awareness, knowledge, liking, preference, conviction and purchase, for example – or pointed out that the sequence may vary. In the “low involvement model,” for example, purchase may be somewhat spontaneous, leaving positive interest and attitudes to emerge later.In all such models, though, customers move amongst various stages, some of which do not involve any purchase or any active participation with the product whatever. In spite of this noninvolvement, it is often important to understand these states and how customers move between them.
Adding to the choice pipeline framework
Figure 1 covers only a limited number of the potential mechanisms that may need to be captured in customer-development. First, each type of marketing will have some impact on more than a single flow of customers – values advertizing will contribute to awareness as well as making people interested. Multiple consumer segments will often exist, each of which exhibit different responses to the communication, different purchase rates, and so on. The chain does not show all possible movements, e.g. the possibility of consumers moving directly into upper levels of the chain with spontaneous purchase, following the low-involvement model mentioned earlier.
Note also that this illustration assumes that the product is fully available in stores from the start. In many cases, stores or other intermediaries may also need to be taken up a choice pipeline if sales are to be achieved.
This briefing summarises material from chapter 6 of Strategic Management Dynamics, pages 345-348.
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- Companies spend considerable sums on marketing activities in order to bring customers through those stages, prior to enjoying any sales revenue from them.
- There can be interactions involving inactive customers that have important effects on customer acquisition and retention. Many people, for example, have positive attitudes towards BMW cars, even though they have never owned or even driven one, which has a positive influence on the attitudes of other non-owners.
- (1) advertizing to build awareness;
- (2) advertizing to communicate the brand’s “values” and win consumers’ interest;
- (3) promotions to persuade interested consumers to add the brand to those they purchase; and
- (4) loyalty promotions to persuade consumers to purchase this brand and no other.

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