In Lab - Archive

The customer's decisional process and perceived value when buying

Cesare Soresina

In the previous article we looked at the importance of staying in contact with customers who bought from us. But how do customers make their decision to buy?
What has changed in the buying process? Is it still the same or have there been some important changes?
Let's begin with some facts.
First of all, tyre specialists have not experienced the same drop in demand on the Italian market as other vehicle repair sectors. Moreover, customers are historically loyal to their tyre specialists whereas repair shops have seen a drop of ten points in customer loyalty and for dealerships it's down by thirty. Then there is the downturn in spending and consumption, so buying focuses a lot on price.
Apropos of this, the first change, which is often hidden and not evident, has already been seen. At one time customers shopped around and perhaps there was not a recession. But now customers don't want to waste too much time. Especially because they can get the information at home on the Internet (21 million Italians have access) either on their own or with the help of children, friends, colleagues at work. Via the Web customers can find out about the brand they have, sizes, prices; they can access other sites with a variety of offers. They can choose their regular specialist or one recommended by a brand. They can also buy and pay for tyres and decide where they want to have them mounted. In other words, they are much better informed and the information does not come from a relationship with the supplier, but from a neutral, independent electronic world.

Nowadays, when it comes to replacing tyres, first the customer:
1. Does research to find out what the market is offering.
2. Compares characteristics and price, forms an opinion and reduces the choice to two possibilities, not more.
This initial change in the buying process can have important consequences. Firstly, if we don't stay in contact with our customers, they could easily decide to change supplier. Secondly, when they go to their regular supplier, they know much more, can ask specific questions, and they ask about prices and discounts very early on, because they already have an idea. Lastly, they want their tyre specialist to present the products, technical information, prices and promotions on a website that they can access on their own. This is where the tyre specialist's sales logic changes.
If Mohammed won't go to the mountain, not only must the mountain stay in contact with its customers, it must also have a significant presence on the Web.
But why should customers decide to buy from their regular specialist?
Is the loyalty accumulated over time enough? Is it enough to have prices that are always lower than the others?
These two reasons are beginning to have increasingly less weight. In fact, in the context of a consumption crisis, but slightly higher demand, the difference comes down to three factors:
• The quality of the relationship and customer management processes. We have spoken about this in previous articles.
• The ability to sell and offer a service, understood as a proposal and value for the customer, that can resolve the use of the tyre over time, the problems of maintenance and use. The words that are normally used - safety, comfort and sportiness - are certainly linked to the brand and model of tyre, but they also and primarily concern the customer's method of mobility. Anyone who is able to respond to usage needs offers value. Value is what customers take home and talk about, they pay only once. What services? Paid for and free. Those regarding the customer's daily life. Have you ever created a Service Card? Has it ever been displayed on your walls, enclosed with receipts, highlighted in your local advertising, in posters and brochures, has it ever been highlighted in your website, have you ever used social networks with your customers? All this is value. It is not enough just to sell tyres, to have parking places and to be open all day, it is not enough to have a nice, clean, painted shop with the signs of the brands or networks you use, it is not enough to be technicians with updated equipment. For customers, these have become prerequisites. They also want service and services.
• Knowing how to handle sales negotiations, to get customers to buy from you is the third factor.
This point is linked to another two moments in the customers decision making process that have changed over the years. Nowadays:
3. When given an alternative, customers may decide, not on the basis of price, but on the person handling the sale and the perception of the value they could receive after buying. So what is needed is transparency, precise advice that is consistent with their ways of using the vehicle, the expectations of use, safety, wet braking, the time necessary for maintenance, reminders so that they don't have to remember to go and see you, any problems other than those with tyres (insurance) or of non-conformity (guarantees), respect for environmental standards. The arrival of tyre labelling next year will allow everyone to justify the difference in the price of tyres but it will not guarantee a service of value over time.
4. The customers decides on one tyre. Is that it? Absolutely not. From that moment customers will measure and verify. They start to do it by seeing if they sign a work order, they look to see if the time required for replacements corresponds to that promised, they see how their cars are handled by the workshop. They check the receipt to see if it corresponds to the estimate (the addition of disposable materials is irritating). From September they will also pay the eco-contribution on tyres, but frequently they do not know the law. They leave, check the cleanliness of the car. Then they receive phone calls, satisfaction levels, reminders, invitation to events, promotions and so on. The work of the tyre specialist has changed from being a professionally excellent artisan to the manager of an asset that over time will reap interest - customers.
A change that is not easy, but certainly necessary. The younger generations should already be moving in accordance with this perspective.

Kotler, the putative father of marketing stated thirty years ago that "marketing always follows the market and comes late". Perhaps I, too, am late in telling you these things. 

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