Microsoft Advertising Takes On Conversion Funnel

Purchase decision model extends McKinsey's

The conversion funnel has become a cliche in marketing circles. Worse than that, while it’s convenient shorthand for how to target consumers, it’s too simplistic, according to Natasha Hritzuk, global director of insights and analytics at Microsoft Advertising. In its stead, Hritzuk has concocted the Consumer Decision Journey.

“What this decision-making journey really did for us is it flagged up two key areas that have never really been addressed by any traditional consumer research—they’re not even really reflected in the context of the purchase funnel,” said Hritzuk. Those stages sandwich the conversion funnel’s phases to include “this moment in time where information filters through and actually makes me to decide to change my product or my brand and then this final phase where I buy something and like it but am not genuinely satisfied until other people validate for me that I’ve made the right purchase.”

Here’s how Hritzuk’s Consumer Decision Journey would play out for a shampoo customer. A consumer may hear through word-of-mouth or a magazine article about some new shampoo that keeps hair slick and shiny despite humid weather. That pre-trigger stage gets the consumer thinking about whether they’re happy with their current shampoo and moves them into the trigger stage where they begin to look out for other brands or products. They advance to the pre-shopping phase and research specific brands and products. The next step is deciding on a product and making a purchase. After that point the consumer hits the final stage, usage, when they try out the product and hear from friends whether it’s working or not.

Because the usage phase includes brand or product advocacy through social media, it can flip back into the pretrigger stage and gets the ball rolling for the next consumer, Hritzuk said. Microsoft Advertising estimates that 94 percent of global advertising dollars are spent in the trigger and pre-shopping phases.

Microsoft Advertising’s path to purchase may sound a lot like McKinsey’s Consumer Decision Journey (beyond the fact that the two models share a name, which Hritzuk said is “purely coincidental”). Rick Chavez, gm of Microsoft Advertising’s online services division, said that Microsoft’s model is “compatible but distinctive” from McKinsey’s. McKinsey’s model starts at the trigger phase, follows consumers through pre-shopping and purchase and then on to post-purchase loyalty. Chavez said that Microsoft’s model “comes from a sharper consumer-research perspective.”

In developing the Consumer Decision Journey, Microsoft Advertising partnered with Ipsos OTX MediaCT to conduct two-hour-long interviews with 45 women between the ages of 18 and 54 about what influences their purchase of skincare, haircare and snack products. The companies are in the process of completing the study with the automotive industry in mind, and Hritzuk said she’s looking at retail as the next possible vertical to examine.