February 8, 2017
Consumers have always been a fickle bunch, and the explosive growth of online shopping, consumer review sites, new marketing channels — and the vast amounts of data they generate — has made predicting customer behavior an even more daunting challenge. But researchers at the University of South Carolina’s Darla Moore School of Business are giving businesses new tools to make sense of consumer behavior.
Studies by Moore School associate professor and Business Partnership Foundation Research Fellow Ramkumar Janakiraman directly link company-generated content in social media to actual customer behavior by observing the actions of individual customers. The study, “From Social to Sale: The Effects of Firm-Generated Content in Social Media on Customer Behavior” that was published in the last year in the Journal of Marketing, examines consumer purchasing patterns and offers better marketing communication recommendations to firms and managers.
Firms in the 21st century are trying to engage customers in a variety of ways. Janakiraman’s focus has been multi-channel retailing — the differences in customer behavior across channels and digital platforms such as apps and websites. His studies focused on customer spending, cross-buying and customer profitability based on social media participation data, transaction data and survey data.
“We are trying to understand what we call a 360-degree view of customer shopping behavior as it relates to multi-channel retailing,” he says.
For example, when customers are shopping for products through an app, it might be easier for them to buy those products, but it also might be easier for them to return the products. The net benefit is not clear.
Overall, however, he and his team found that company advertising and firm-generated social media content have a positive effect on customer spending. This positive effect was greater when it came to customers who were more comfortable and familiar with technology.
Through his study of social media marketing communication, he found that traditional mass media advertising is quickly becoming less effective in the face of personalized messages that use individual, customer-level information. However, he found that the impact of traditional media advertising is significant if it is tied to social media marketing communication.
“There’s a synergistic effect between traditional media advertising and social media marketing communication,” he said. “It is comforting to know that both these ways of engaging the customer are relevant today.”
Janakiraman emphasized the power behind the messages we convey when we “like” a product or company on Facebook or some other social media platform. One of the aspects of his research focuses on the outcome of people “liking” something on social media and thus conveying their preferences for particular products to everyone in their network.
On the whole, the results of the study reveal that social media is a powerful tool for company-consumer communication. With technology developing as rapidly as it is, the best marketing strategy for companies to adopt is one that uses various social media platforms.
Currently, he is in the process of refining his research on the effects of front-of-package labeling on customer shopping patterns. Traditional nutrition labels are difficult for the average consumer to read as far as size and layout. Today, many companies are making a voluntary effort to ease the process of reading these labels by putting the most important nutrition information on the front of the package in a simple format. Janakiraman’s research has found that this has caused a favorable response in consumer attitudes toward those products’ companies and enabled them to make better, healthier choices.
Janakiraman teaches MBA and Professional MBA courses on marketing analytics and data mining. In addition to his nutrition research, he is studying the impact of cyber attacks and data breach announcements on customer shopping behavior.
By Madeleine Vath