Conducting consumer research in China is very important because of the specificities Chinese customers show. If you want to successfully manage your product or service, you need to gather and understand consumer insights in order to spot and target your customer and to be able to adjust your product or service according to what your consumers in China perceive, think, buy and how they act. However, gathering and understanding data about the Chinese consumer, e.g. with focus groups, shop-alongs, surveys, online focus communities or interviews, to manage your product or service is only one part of the consumer research. Nowadays, the part of managing the consumer journey becomes at least as important. With effectively managing the consumer journey you can prevent your consumer to even check competitor’s offers and thus, make him or her loyal to your brand.
However, like the Chinese consumer showing uniqueness in general, the consumer journey of a Chinese consumer differs from the one in the West we know now as well. At Daxue Consulting, we can provide you with a complete understanding of the consumer journey in China through our years of experience in China. This insight includes:
In general, one can say that the consumer journey of Chinese consumers can be still considered as rather traditional. On the other hand, customers are clearly affected by the digital age. However, companies in China fail to satisfy their consumers in their experience and need to adapt to the requirements of them and develop key capabilities in order to manage the consumer journey successfully. With our help you can identify the specific needs of your consumers and create competitive advantage by being able to satisfy them.
As it is commonly known, the typical consumer journey is funnel-shaped and a consumer takes several steps to choose among different offers and to make his or her final decision eventually. The funnel concept emerged from extensive consumer behavior research and assumes that the buying decision can be classified in five different phases. From awareness and familiarity to consideration and purchase to the last phase, loyalty, where in each phase the customer eliminates more offers until he or she decides for one in particular and stays loyal to it or re-enters the consideration phase.
However, especially in the Western world, this concept is no longer applicable as the digital age affects it a lot. Using a customer-centric model, gathering and analyzing consumer data to tailor the consumer journey individually, it is possible to lead the customer directly into the loyalty-loop. In doing so, the new journey is streamlined, compresses the consideration phase and aims for the immediate purchase. After the customer bought the product or service, a satisfying customer experience shall ensure that he or she enjoys, advocates and lastly bonds with it and thus, stays in the loyalty loop.
To be successful, certain capabilities are needed, which, according to our research at Daxue Consulting, also are becoming significant for the Chinese consumer journey.
The Chinese customer nowadays is becoming increasingly sophisticated. The ever-growing use and knowledge of both mobile technologies and social media gives the Chinese customer multiplied opportunities to experience such a sophisticated shopping. So far, we can outline a five-step Chinese customer journey due to the changes through sophistication in technology and knowledge:
After recognizing a specific need, the Chinese consumer compares a product or service more and more by themselves through the rise of opportunities in the digital age to do so. Chinese customers especially rely on user-generated content (e.g., comparing websites or social media) and are skeptical when it comes to company-generated content like the own website or traditional advertising.
The consumer evaluates several alternatives with help of the above-mentioned channels. The choice is often made before the prospect visits the store and is often led by fellow consumer’s opinions of the product rather than by the trust in a certain brand.
Again, technology influences the behavior of the Chinese customers. Mobile commerce is becoming increasingly popular and increases the expected flexibility of the companies.
This flexibility is also expected and important for the post-sale service, where the Chinese customer requires a consistent service among all channels, e.g. returning an online purchased product to an offline store.
Chinese customers love to share their opinions after buying a product as they equally rely on other’s opinions before buying. The way a company is able to shape a positive customer experience influences whether the customer rethinks his choice of brand or repurchases the same brand and becomes loyal.
With these specific steps, the Chinese consumer journey resembles the model of ‘the 4 Moments of Truth’, coined by P&G, which only connects the third and fourth step. However, although there is a theoretical understanding of the Chinese consumer journey, most companies lack the ability to manage the consumer journey and experience to their advantage. The Chinese customer is ready for an enhanced experience, though, companies in China fail to provide. Several studies show that most of the Chinese customers are not satisfied with their experience. We estimate that in general approximately 75% are not satisfied with their customer experience when interacting with the company across various channels. Also, even about 85% of the Chinese customers say that they would pay more for a better customer experience.
At Daxue Consulting, we identified this pattern as a great negligence. You are missing huge opportunities. With the rise of the middle class in China, price becomes less of a driver for the average Chinese customer. However, therefore, he or she is expecting a high-quality product and a more sophisticated buyer experience. If you’re able to manage the consumer journey successfully, e.g. by individually tailoring the product to unmet needs of the Chinese consumer, you could bond millions of customers to the own brand. Your goal should be to make your consumer stick in the loyalty loop.
To provide you with every information necessary for understanding your specific consumer’s journey, we apply different methodologies. From understanding unmet needs, the consumers’ favored communication channels to understanding what influences their purchasing decision to understanding how to engage your consumers – at Daxue Consulting, we know how to leverage every step of the consumer journey and how to collect first-hand consumer insights.
Regarding the first step of the consumer journey, several methodologies can be helpful. It’s all about the consumer’s need recognition. In order to understand unmet needs of the consumers and how they get aware of those needs, we conduct focus groups, for instance. Qualitative interviews as well as online focus communities are also methodologies that help overcoming the great challenge in China, that reliable and transparent data or sources are very rare. Only with these first-hand consumer insights you can adapt your product or service to the specific needs of your consumer which is the requirement for them taking you into consideration when doing research about their choice of brand. When testing a concept, such as certain product design or a store-setup, we can conduct Virtual Reality (VR) Research as well, in order to find out if this design or setup meets the customer needs.
Although in the second step of the Chinese consumer journey, the Chinese consumer rather relies on other consumers’ opinions, they will check your website as well. In order to establish/change it according to your customer’s preferences, we use A/B Testing or eye tracking, for instance. Applying these methodologies, we can enhance the engagement of your customer on your website as well as examining how to increase your conversion rate. E.g., we can tell you what the user sees and ignores and thus give recommendations for refining your website by prioritizing specific content.
Talking about the conversion rate already introduced into how we can leverage the third step of the Chinese consumer journey, the purchase. Besides the two above-mentioned methodologies for improving your company website, we apply User Experience (UX) Research in terms of online shopping. UX includes the User Interface (UI) which plays a crucial role in the purchasing decision. By examining which interface your customers prefer, you can create it accordingly and enhance their experience, too. This, in return, will help to increase the conversion rate.
To understand your consumers’ favored distribution channels or what influences their purchasing decision in general, we can conduct surveys (also online surveys). To get a deeper understanding of the purchasing decision, we further can conduct shop-alongs, as part of the ethnographic research in China, a special type of one-on-one in-depth interviews, with which we examine actual Chinese offline shopping behavior. It doesn’t rely on recalled experiences of the customers, but we can observe it directly. With store-checks, we can also observe how, e.g., the appearance of your store or how your stuff contribute to the selling of your product.
Using (online-) surveys, we can leverage the fourth step, the use and post-sale service, as well. By using them, we can examine which are the favored communication channels of your customer, for instance. In doing so, we make sure to always find fitting respondents and enough respondents to be representative. Also, data-cleaning is key for our surveys to remove biased answers and ensure valid results.
Finally, to ensure making your customers loyal to your brand (fifth step), we apply the same qualitative methodologies like we do for leveraging the first step of the Chinese consumer journey. By conducting focus groups or qualitative interviews but also so-called diary studies, we examine how to make your customers buying your product rather than the one from your competition. In contrast to the other qualitative methodologies, a diary study is a longitudinal research. This means that it takes place over a long period of time. Through self-reports of the same participants about their activities, thoughts and emotions, we can analyze what makes them engaging with a brand and eventually, loyal to you.
With all these methodologies, we want to achieve that your customer first enjoys, then advocates your product or service and lastly, bonds with your brand. In doing so, your customers enter the so-called “loyalty loop” and you can avoid them researching and evaluating other offers for the type of product or service you provide.
Besides of applying the different methodologies for leveraging every step of the Chinese consumer journey, you need to focus on the post-sale service in particular. This period is crucial for making your customers loyal. You need to provide a satisfying customer experience which includes more than just identifying the customers’ preferred communication channel. When in dialogue with the customer, you have to make sure to contextually interact with him or her, for instance. After the post-sale service, customers will share their experience on social platforms like Facebook or comparing websites. In doing so, they can greatly influence other people’s behaviors, especially in China. Only by shaping a positive experience through individually interact with your customers after the purchase, they will stay loyal and recommend you.
However, to make the consumer journey ‘sticky’, you need to show more capabilities than contextual interaction. Contact us today to identify what capabilities you need and what methodologies we can conduct so you can successfully manage every step of the Chinese consumer journey – lasting in ultimate brand loyalty.