Consumer Behavior at 3 segments-Apostles, Mercenaries and Terrorists SUBMITTED BY:- ABHINAV MEHROTRA SANDEEP GREWAL

Consumer Behaviour Actions a person takes in purchasing and using products and services, including the mental physical and social processes that precede and follow these actions.

Consumer Decision Making Model- Factors External Env Social-Class Influences Internal Determinants Motivation & Involvement Sub-Cultural Influences Personal Influences Prob Recognition Inf Search & Evaluation Pur process Post Pur Beh Learning & Memory Attitudes Cultural Family Influences Personality & Self-Concept DECISION PROCESS Social-Group Influences

STEPS IN CONSUMER BUYING DECISION MAKING PROCESS

EVALUATION OF ALTERNATIVES PURCHASE & CONSUMPTION NEED RECOGNITION INFORMATION SEARCH EVALUATION OF ALTERNATIVES PURCHASE & CONSUMPTION POST-PURCHASE EVALUATION DIVESTMENT CONSUMER DECISION PROCESS

Customer satisfaction & customer behavior Loyalists Apostles Defectors Terrorists Hostages Mercenaries

APOSTLES Apostles - at the other end of the scale the highly loyal and highly satisfied customers.  What sets them apart is the fact they actively go out and spread the good word. Some interesting research carried out by Xerox found that customers rating “extremely satisfied” were 6 times more likely to repurchase than those ranking “satisfied” the very next option down.  These are the company’s best friends

LOYALISTS Loyalists - High satisfaction and high loyalty but do not spread the word that much. What separates loyalists from apostles is really how they spread the word. As well as being active Apostles need to be very well connected and typically influential – i.e. they are able to spread the word to lots of people and those people are likely to listen.  However the loyalists can be thought of as the bedrock of your company, they keep on coming back.

MERCENARIES Mercenaries - often the bulk of the customer base. Apparently satisfied and loyal these people tend to switch to the best deal as they see it. In industries with a low cost of switching they are likely to change supplier quickly and without warning. For example where there are plenty of reasonable “me too” products then price / special offer is often the differentiator.  Many Mercenaries have the behavior to deeply ingrained to change, but others would willingly become Loyalists when they receive the right product and service combination from a supplier.

TERRORISTS Terrorists - at the very bottom of the scale there are customers who are extremely dissatisfied and have very low loyalty. They can do great damage to the business – particularly in the Internet age -though blogs, emails and word of mouth are the more likely outlets.

HOSTAGES Hostages - with medium to high loyalty and satisfaction these customers tend be to “stuck”  – think of contracts where you are locked in for 12-18 months, not very happy but no easy way out or where other “costs of switching” keep you locked in to your current supplier.  Monopoly / oligopoly supply situations create hostages too.

DEFECTORS Defectors - neither particularly loyal nor particularly satisfied.  If they haven’t already left they are likely to.  However they tend not be as vocal as the Terrorists in expressing their dissatisfaction.  They are often one trigger away from leaving.  As with Mercenaries many would willingly become Loyalists when they receive the right product and service combination from a supplier.

WHAT THIS MODEL IS FOR? As with all such models the key lies not so much with the analysis, but what you actively do to improve things for your business. How do you win over the terrorists or increase the number of apostles, for example.

Customer retention 1. Loyal customers buy more 2. Loyal customers are less price sensitive 3. Servicing existing customers are cheaper 4. Loyal customers spread positive word-of mouth