Temkin Group Data Snapshot

What Influences Consumer Purchases?

Study of 10,000 U.S. consumers shows that social media has gained ground since last year, but is still not a top influencer

Temkin Group October 2012

By Bruce Temkin Customer Experience Transformist & Managing Partner

Temkin Group Data Snapshot

What Influences Consumer Purchases?

Study of 10,000 U.S. consumers shows that social media has gained ground since last year, but is still not a top influencer

Description
We surveyed 10,000 U.S. consumers to find out what information sources they use to purchase autos, cell phones, computers, credit cards, health plans, insurance policies, and televisions. The analysis looks at sources such as Facebook and Twitter, discussions with friends and employees, discussions with company employees, and information on various websites. Our analysis examines differences across age groups and analyzes changes over the last year.

How to use this report:

Understand which information sources are influencing your customers and how that is changing Learn how social media is affecting purchasing decisions Adjust your strategy based on how consumers are making their purchase decisions

Data Charts: 1. Social Influences on Purchases 2. Social Influences on Purchases, Changes since 2011 3. Information Influences on Computer Purchases 4. Computer Purchases, Changes from 2011 to 2012 5. Information Influences on Cell Phone Purchases 6. Cell Phone Purchases, Changes from 2011 to 2012 7. Information Influences on Credit Card Decisions 8. Credit Card Decisions, Changes from 2011 to 2012 9. Information Influences on Insurance Purchases 10. Insurance Purchases, Changes from 2011 to 2012 11. Information Influences on Television Purchases 12. Television Purchases, Changes from 2011 to 2012 13. Information Influences on Health Plan Selections 14. Health Plan Selections, Changes from 2011 to 2012 15. Information Influences on Automobile Purchases

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1) Social Influences on Purchases

In January 2012, we surveyed 10,000 U.S. consumers about the information sources they used to purchase autos, cell phones, computers, televisions, insurance policies, health plans, and credit cards. When we examined the social information sources, we found that: Friends and online reviews are the most influential. Across all purchases we examined, conversations with friends and family as well as online ratings and reviews were much more important than Facebook and Twitter. Auto buyers rely the most on social advice. When it comes to their car purchases, consumers are the most likely to discuss those decisions with friends and family and read reviews and ratings sites. Facebook and twitter influence cell phones, but not health plans. Forty-one percent of respondents reported that social media comments from Facebook and Twitter were helpful or very helpful during their cell phone buying process. At the other end of the spectrum, only 25% of consumers use these sites to choose their health plans.

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2) Social Influences on Purchases, Changes since 2011

We compared social media influence in this years study with a similar analysis we conducted last year and found that: Facebook and Twitter have become more influential. Across all purchases, consumers have increased their reliance on on Facebook and Twitter more than with any other information source. The largest jump is with cell phones and insurance policies. Health plan buying is becoming more social. All types of social influence gained considerably over 2011 in the health plans category. This purchase decision saw the largest gain in the use of discussions with friends and family the use of rating and review sites.

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3) Information Influences on Computer Purchases

We examined the information sources that consumers use to purchase computers and found that: Consumers rely on many sources. Except for Facebook and Twitter, all the information sources we asked about were described as helpful or very helpful by at least 50% of our respondents. Older buyers gravitate toward company-provided information. Those aged 35 and older are more likely to look at the websites of the computer manufacturer and retailer to inform themselves during the computer-buying process. Younger buyers rely on discussions and ratings. The top two sources used by consumers under 35 are discussions with friends and family and information on ratings and review websites. Retail store employees beat out Facebook friends. Across all age groups, consumers rely more on discussions with store employees than on information from Facebook or Twitter users.

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4) Information Influences on Computer Purchases, Changes from 2011 to 2012

We compared the information sources that consumers used to purchase computers in 2012 with those that they used in 2011 and found that: Consumers use more information. No information source lost influence from 2011 to 2012. One source, however, the information on computer manufacturers websites, stayed at 57%. Social media gained the most. While still the least influential source we studied, social media sites like Facebook and Twitter gained seven percentage points over last year. Thats a gain of more than one-fifth of the original degree of influence and is most pronounced with consumers between 25 and 34 years old. Some sources lost influence among seniors. Those aged 55 and up this year reported less use of information on computer manufacturer websites, discussions with friends and family, and comments on social media sites when it comes to buying a computer.

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5) Information Influences on Cell Phone Purchases

We examined the information sources that consumers use to purchase cell phones and found that: Retail stores employees have a lot of influence. Fiftynine percent of those surveyed said they find discussions with employees at wireless retail stores to be helpful or very helpful when making decisions about a cell phone purchase. This preference holds strong among almost all age groups. Online reviews are most influential on the young. Sixtythree percent of those customers aged 18 to 24 report reading reviews and ratings online when looking for a new cell phone. Online reviews are not among the top three sources for the other age groups. Social media like Facebook has less influence. While about more than half of consumers younger than 35 were influenced by comments on social media sites when looking for a new cell phone, the influence of those social media sites drop off at older groups.

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6) Information Influences on Cell Phone Purchases, Changes from 2011 to 2012

We compared the information sources that consumers used to purchase cell phones in 2012 with those that they used in 2011 and found that: All sources are increasing. No source of information declined in popularity from 2011 to 2012. Comments seen on social media sites gained the highest percentage12 percentage points out of an original measure of 29%. Older users are putting less stock in company sites. Though respondents aged 44 and younger look at wireless company websites more than last years respondents, those aged 45 and up report that company sites have less influence on their purchasing decisions. Discussions with employees remain most influential. Last year as well as this year, interactions with employees are at the top of the list. This is becoming even more important for consumers younger than 35.

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7) Information Influences on Credit Card Decisions

We examined the information sources that consumers use to select credit cards and found that: The credit card companys site is most popular. On average, respondents use information on the credit card website more than they use any other source. The youngest consumers, however, are an exception to this rule. Younger consumers prefer a more personal connection. While most people prefer looking at the credit card companys site, the youngest consumers in our study prefer talking to friends and family as well as employees at the credit card company when making a purchase decision.

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8) Information Influences on Credit Card Decisions, Changes from 2011 to 2012

We compared the information sources that consumers used to select credit cards in 2012 with those that they used in 2011 and found that: Each source made small gains. No source stagnated or declined from 2011 to 2012 and each source of information gained users over the past year. Social media gained the most, proportionally. The percentage of respondents who report being influenced by sites like Facebook and Twitter when purchasing a new credit card increased from 25%, in 2011, to 34% this year. Thats an increase of more than one-third. Company websites are gaining and losing ground. Consumers between 25 and 44 are using credit card websites more frequently, but younger consumers are moving to reviews and ratings along with Facebook and Twitter.

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9) Information Influences on Insurance Purchases

We examined the information sources that consumers use to purchase insurance policies and found that: Agents are the most important information source. Almost two-thirds of those surveyed said that discussing options with insurance agents is helpful. Agents are particularly influential for consumers who are 25 and older. Insurance company employees are also important. Over half of consumers found discussions with insurance company employees to be helpful. The youngest consumers find this to be the most most useful information source. Social media attracts only one-third. Just one-third of respondents say they find social media sites like Facebook to be helpful or very helpful when in the market for a new insurance plan. It is the least-used information source across all age groups.

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10) Information Influences on Insurance Purchases, Changes from 2011 to 2012

We compared the information sources that consumers used to purchase insurance policies in 2012 with those that they used in 2011 and found that: Social media make a huge jump. Those who report finding social media sites like Facebook to be helpful or very helpful when choosing an insurance plan increased by more than half from 2011 to 2012. Forty year olds are craving more information. For all information sources, consumers between 35 and 44 have seen the largest increase in usage. The largest gains are in discussions with employees of the insurance company and the use of Facebook and Twitter.

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11) Information Influences on Television Purchases

We examined the information sources that consumers use to purchase televisions and found that: Reviews and ratings are most popular. Fifty-six percent of respondents said that reviews and ratings on sites other than the retailers or the manufacturers are helpful. This is the most useful information source for consumers who are younger than 45. Facebook and Twitter attract fewer purchasers. While at least half of all respondents report using at least one of the other sources of information, only 35% said that reading comments on social media sites like Facebook helps them make decisions about television purchases. Older consumers prefer official content. In contrast to younger consumers, those aged 55 and older are most likely to find information on the manufacturers site as well as discussions with retail store employees to be helpful or very helpful when buying a new television.

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12) Information Influences on Television Purchases, Changes from 2011 to 2012

We compared the information sources that consumers used to purchase televisions in 2012 with those that they used in 2011 and found that: Each source gained year over year. Each source of information made a modest gain from 2011 to 2012. Social media sites made the largest jump, from 25% of respondents in 2011 to 35% in 2012. Most sources lost audience among seniors. The only serious losses from 2011 to 2012 were among consumers aged 55 and up. Those consumers show much less interest in online reviews, social media, and in-person discussions with retail store employees compared to last years respondents of the same age.

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13) Information Influences on Health Plan Selections

We examined the information sources that consumers use to select health plans and found that: No source attracts a majority. Though some sources of information are more popular than others, none of the information sources is used by even half of the respondents. Health plans directly influence the decisions. Across all age groups, the most used source of information is either discussions with health plan employees or information on the health plan websites. Younger consumers turn to friends and family. For consumers under the age of 35, discussions with friends and family is one of their top two information sources. Social media is not a major factor. Just 25% of those surveyed rely on social media sites such as Facebook and Twitter. Even younger consumers arent focusing on these channels.

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14) Information Influences on Health Plan Selections, Changes from 2011 to 2012
We compared the information sources that consumers used to select health plans in 2012 with those that they used in 2011 and found that: Health plan research is on the rise. Though no source attained a majority in 2012, all sources increased significantly. Social media increased by two-thirds, and online reviews increased by one-third. Discussions with family and friends lost prominence. In 2011, discussions with family and friends were almost as popular as the two top sources. In 2012, though it did gain users, it fell behind the others in total popularity.

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15) Information Influences on Automobile Purchases

We examined the information sources that consumers use to purchase automobiles. This is the first year that we examined automobile purchases so we do not have comparison data with last year. Heres what we found: Dealership employees are critical. More than two-thirds of consumers rely on their discussions with employees at the dealership. While this source is one of the top two across age groups, its particularly important for consumers who are 45 and older. Friends and family are also very influential. Six out of ten consumers rely on discussions with friends and family, and that is the most important influencer for consumers under the age of 45. Facebook and Twitter are not just for the youngsters. The largest users of Facebook and Twitter in their car buying process are consumers between the ages of 25 and 44, who use it even more than the youngest group.

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Temkin Group is a research and consulting firm that helps companies increase customer loyalty by improving their customer experience. We combine thought leadership with a deep understanding of organizational dynamics to accelerate the path towards customer-centricity and avoid many of the pitfalls along the way. Building the capabilities to consistently delight customers doesnt happen overnight and it doesnt come from discrete projects or one-off improvements. Building and sustaining great customer experience requires a multi-year journey. We help clients build four customer experience core competencies.

When experience matters contact us info@temkingroup.com www.temkingroup.com (617) 916-2075

We work collaboratively with our clients to identify programs that meet their needs. Our services include: Interactive workshops to instill a common mindset, vocabulary, and approach across an organization. Strategic reviews of customer experience plans and objectives to identify opportunities for accelerating efforts and avoiding missteps. Assessments of customer experience competencies to identify and close critical gaps. Senior executive sessions to ensure appropriate levels of alignment and commitment. Executive coaching to help executives leading the journey. Speeches and webinars to bring customer experience ideas to life and to energize groups around the concepts. Temkin Ratings to see how consumers feel about large companies.
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