Before the First Moment of Truth
brand-as-business bit: A recent piece in Businessweek got me thinking about the customer purchase decision process prior to the shelf. The article by Sam Grobart reported on Motorola’s measly ad budget compared to Apple‘s and Samsung‘s at $1BB and $4BB respectively (ironic that a $500MM campaign is considered inadequate — but that’s another blog post.)
Sam wrote, “Advertising gets a lot of attention, but marketing, sales, and promotion are arguably more important.” Analyst Benedict Evans of Enders Analysis agreed, saying that Samsung’s in-store sales strength is what wins customers over. And Samsung marketing head DJ Lee explained, “The best way for us to sell our devices is in the store.” All of this was reported to suggest that Motorola needs to increase its marketing, sales, and promotion budget to sell more effectively in-store.
While I’m usually one to emphasize the importance of customer experience over advertising, I believe these comments overlook the importance of awareness and online research in the mobile phone purchase decision process. In fact, because choice of phone is driven as much by carrier as it is by hardware, many folks enter the retail environment with a pre-determined short list of possible products to purchase.
No amount of “spiffy” looking retail locations nor well-trained in-store staff are going to get me to buy the new Moto X. That’s because I’m a loyal Verizon customer and I love my Samsung Galaxy S3, and when it comes time to replace it, I’ll go to the Samsung or Verizon website and research my upgrade options — and then I’ll buy my new phone online or trudge over to the local Best Buy with model number and price in hand and tell the salesperson exactly what I want. To get a new phone into my consideration set, companies need breakthrough advertising, a robust website, and excellent reviews and online coverage of the product.
When it comes to mobile phones, for some the first moment of truth may indeed be in-store — but for most, there are important opportunities to impact purchase decisions well before then.