Published April 2004

Knowing customers’ ‘shopping psyche’ pays off

Marketers do their level best to understand the demographic composition of their target market(s) — and they should. But that information paints only part of the picture. For a full customer portrait, you’ll need to brush up on your customers’ shopping psyche.

Shoppers fall into one of two categories: transactional and rational. Roy H. Williams, best-selling author of “The Wizard of Ads,” refers to them as “shopping modes.” Understanding the shopping mode, or psyche, of your customers will help drive many of your marketing decisions.

The first step is to know the traits and motivations of each category. The transactional shopper lives for today. These consumers like to research and shop many stores for the best price. Consumer Report is directed toward transactional shoppers. They love to negotiate and are not often loyal to a specific brand or company. Although getting the best deal is the primary concern, they do not consider their time and travel as an expense, or part of the purchase price.

A rational shopper’s motivation is in direct contrast to that of a transactional bargain hunter. Rational shoppers consider future implications and are looking for a company or person they can trust, one who is expert in their field. These shoppers are far more loyal (when confident in the seller). Rational shoppers also consider their time as a part of the purchase price, and consequently, don’t enjoy the shopping process.

Another important dynamic to consider is that transactional shoppers visit several stores before going back to one (that has the best deal) to purchase. Rational shoppers usually go straight to their favorite store or business and make their purchase. Williams says transactional shoppers account for more store traffic than they do purchases. So be aware that they will consume far more resources (collateral materials and sales time).

Many consumers, as with any psychological trait, have some of both tendencies to varying degrees. The same person can also be more transactional in one product category and lean rational in another. Most consumers, however, are dominant in one or the other. Spotting these tendencies only requires observation and knowing what to look for.

The challenge for marketers and sales people is that the right thing to say (or present) to a transactional shopper will rub a rational shopper the wrong way. So understanding your business’ ratio of transactional to rational shoppers will help you tweak your marketing mix.

Example: If you have a 4-to-1 ratio of rational over transactional shoppers, you would focus on expertise and service attributes in positioning and presenting what you offer. Delivering on your promise would be paramount, as your rational customer base will pay more for the “trust” factor. If most of your clientele is transactional, your strategy would include frequent sales promotions and knowing what your competitors are charging. You’d be better off investing your resources in mystery shopping than service or retention programs.

Adjusting what and how you sell — based on your shoppers’ psyche — can convert more “would-be shoppers” into “satisfied customers.”

Andrew Ballard, President of Marketing Solutions Inc. in Edmonds, develops brand leadership strategies for businesses and teaches strategic marketing through Edmonds Community College. He can be reached at 425-672-7218 or by e-mail to andrew@mktg-solutions.net.

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