Lesson five, the Consumer Decision Journey. Brands have used frameworks to keep up with consumer change in technology growth. None, in my opinion, are more relevant than McKinsey's CDJ. Five important things that will talk about will talk about how consumers digital lives are complicated. There's lots and lots of data. Making sense of that data requires a framework that organizes it, and makes it easier for us to understand. McKinsey and Company's Consumer Decision Journey, a shorthand called the CDJ is an effective framework for understanding how consumers research and byproducts. It doesn't matter what type of product that is. Each step of the CDJ triggers new questions that the brand can ask that analysts can investigate. And finally, data can provide answers to those questions, and that's the most important thing for us as analysts. All right, we've seen all the different digital channels that brands will use to connect with consumers, all of them generating great, great data. When brands in a traditional sense would think about how consumers shopped a category, they would use the old funnel metaphor. They would say there are these consumers at the top who are aware of our brand through those that are actually considering our brand, to those that are favoring our brand, to those that actually make a decision. That was somewhat outdated, for a couple reasons. One is that that metaphor was completely from the brand's perspective looking out at the consumer, right? It didn't take a consumer centric point of view. It also didn't really allow for the fact that you get way down the funnel for some purchase, and a consumer certainly now, more than ever, has the opportunity to become aware of a new product altogether, and jump out of that funnel. So the funnel didn't really fit. This is where McKinsey's CDJ came in, and did make sense of that journey. It starts with a trigger. There's something very much akin to the Procter & Gamble three step model marketing, where there's something that happens that makes consumers say I want a product again. Either they see an advertisement, or they break the product that they have and want a replacement, or just run out of something that is critical for them. From there, the CDJ traces a couple important steps in that consumer's journey. The first is called consideration. There is something that McKinsey identified called the initial consideration set. After that trigger happens, there will be a number of brands that pop into my mind immediately. If I am looking for a pair of running sneakers, I'm going to think Nike, Adidas, maybe Brooks, right? These are the brands that immediately come to mind. That is my initial consideration set. It does not in any way mean that the consumer buys a product that it puts on its initial consideration set, but it sure gives those companies a leg up. After that consideration, the consumer moves into what is called the active evaluation process. This is the time where they're collecting information, talking to friends, learning more and more about the product, so that they can make an informed decision. This is, for all intents and purposes, this is the ZMOD that we introduced earlier, that zero moment of truth from Google. From there, there is the by decision, the moment of purchase. And this is where the consumer actually exchanges cash or money in some form for that product. Following that comes the next phase, which is called the post-purchase experience. So now, you have made that purchase decision. And you've got that product home, and now you're experiencing it. Those two points, the moment of purchase, and the post-purchase experience are very akin to what P&G call the first moment of truth, right, when you're making the decision to buy. That is the moment of purchase in a CDJ. And then that second moment of truth for a brand, which, in the CDJ lingo is a post-purchase experience. There's something else here as well called the loyalty loop that the CDJ points out. In this case, you as a consumer, should you have a very good experience, become an advocate for that brand. And your advocacy is so strong, that the next time this trigger arises, the next time you need a sneaker, you don't go through the initial consideration set, and all the active evaluation before you make a decision. You jump into what's called the loyalty loop, and you buy the same product that you had bought before. This is how companies like Apple have created such a significant and dominant market position, is by having consumers completely loyal to their brand. When they need a new product that Apple offers, those consumers don't do an enormous evaluation and invest all that kind of energy. They just simply make the choice to buy Apple. At every single phase, there is an important question that a brand can ask, and an analyst can investigate through the use of data. Consideration brands would want to know do customers recall and recognize my brand? If they don't know who I am, I can't land on their initial consideration set. Active evaluation, do my product satisfy consumers needs? If they don't, consumers are not going to choose me, right, and on and on. Every single phase features some question that is important for a brand to investigate and understand. We've seen some evolution in this consumer decision journey as well, where that classic journey does start at a trigger, and then moves through the phases. What we're seeing more and more are brands doing everything they can to try to flatten or quicken that initial consideration period, and the active evaluation to just get consumers to buy that product very quickly. And then hopefully lock them in as a loyal customer, should the experience, the post-purchase experience be very good into the loyalty loop. We see brands taking dramatic steps to eliminate any kind of barriers to the quick purchase decision for consumers. One brand that I feel does is particularly well is Casper. There are a number of different mattress options for consumers out there. One of the things that Casper realize is that particularly in an urban setting, consumers, frankly, just have trouble getting that mattress up the stairs into an apartment. So why not start promoting mattresses wrapped, and then placed in a box? That is much easier for someone in a walk up situation, particularly to get into their house. Casper will also do the last few yards of delivery themselves, mounting these boxes on bikes, and biking them to consumers. Again, doing everything that they can to just make that purchase decision much more easy and painless for a consumer to get them bought in as a loyal customer to the brand. We've seen the way that brands really organize and think about the consumer journey affected by this framework as well, where you now have cross-functional teams, all with a bit of a different perspective, all thinking about initial consideration. Active evaluation of the moment of purchase, working together in what we might call Scrum Teams to trade ideas, and work on creating a valuable holistic phase.
