CX Metrics Series: Purchase Horizon
by William Braün, on Jun 14, 2018
This is Part 6 in a series that examines key Customer Experience (CX) metrics that every Voice of the Customer (VoC) program should measure to better understand visitors’ digital experience. In this post, we look at a metric that provides the only way to truly know when your visitors are intending to buy: Purchase Horizon.
From the time we start researching a product to the time we make the purchase, what we expect to accomplish with each interaction we have with a brand will change over time, and is an important part of understanding your customer's journey.
From the marketer’s point of view, understanding how to meet your customers’ evolving needs as they get closer to purchase is crucial in order to design a responsive Customer Experience (CX) that stands out. Knowing when your customers intend to make that purchase helps you better gauge and compare their behavior at each stage of the purchase funnel.
In this regard, Purchase Horizon can be a valuable and handy CX metric to collect as part of your Voice of the Customer (VoC) program for exactly this purpose.
In this post, I look deeper into why you need to measure Purchase Horizon as part of your VoC program, and provide a use case showing how this metric can be valuable in your customer analysis.
How you can measure ‘Purchase Horizon’
A customer’s typical purchase horizon can differ based on many factors, including individual shopping habits, seasonal considerations that may shift their needs, as well as the type of product they’re looking to purchase. For example, the amount of time you spend researching a new car will be much longer than it would be for a new coffee mug.
Whether or not your customers have a 'concrete' purchase horizon (need to purchase by a fixed date) or a 'rolling' one (purchase date dependent on personal preferences), your customers will most likely have a general idea of when they plan to make a purchase.
To give an idea of how you could measure the Purchase Horizon metric as part of your research, here’s an example commonly used by our clients in the Automotive industry:
Using a close-ended question is recommended since it helps you easily categorize your respondents into easily-analyzable segments.
In terms of the answer choices, these breakdowns will come down more to knowing your typical sales cycle. For example, big-ticket items like vehicles or appliances may typically need a longer time to research, and as such, would require wider ranges in the answer choices like in the example above. However, it will ultimately come down to choosing ranges that will work best for you and will categorize your respondents into groupings that will be helpful for your analysis.
Like most close-ended questions, we would recommend having no more than six answers to prevent overwhelming the survey respondent, while including a “Not planning to purchase”-type answer choice is also recommended.
Why you should measure ‘Purchase Horizon’
Your customers will have different needs throughout their purchase process
Every shopper has their own way (and pace) of doing things, including when it comes to shopping online. Statista reports that “Only Browsing” and “Only Researching” are among the most common reasons digital shoppers in the US abandoned their shopping carts in 2017.
Working with our clients over the years, we have seen that a customer’s place in the Purchase Horizon can impact what they expect from each brand interaction, often seeking out more detailed or specialized information as they look to narrow down their consideration set and get closer to purchasing.
This metric provides a great way to bucket your customers and prospects into segments into which you can dig deeper and compare their experiences, as well as add context to your customer feedback, your web analytics data and your session replay recordings.
This CX metric provides useful insights to measure campaign effectiveness
If people have different needs at different stages of their research, you must ensure your campaigns connect with your audience with a message that speaks to their current scenario.
When cross-tabbing Purchase Horizon data from your VoC survey with source data (e.g. organic / paid / campaign-specific UTMs), this opens up the ability for you to gauge whether your campaigns are attracting the right type of traffic to your web site.
Plus, you can also evaluate whether their resulting visit was successful in driving them further down your sales funnel.
Use Case: Better understanding your in-market car shoppers
A classic example where we’ve seen the Purchase Horizon metric in action is with VoC programs for brands in the Automotive industry. Understandably, buying a new vehicle can be a significant undertaking that requires weeks, often months from the time you start your research to the time you put pen to paper.
Research by Cox Automotive found that car buyers spend 60 percent of their time researching online. In fact, Google even examined a use case where a consumer had over 900 digital interactions leading up to their eventual purchase.
Our Auto clients often need to understand the differences in expectations between those with short and long purchase horizons, as well as gauge their ability to meet these expectations and identify any shortcomings they can address to improve their customer experience.
Let’s imagine a fictional Auto brand, iperceptions Auto, who launches a pre-post survey on their web site that includes the following questions:
When do you plan to purchase or lease your next vehicle?
Which of the following best describes the primary purpose of your visit today?
Were you able to complete the purpose of your visit today?
Reason for Failed Task Completion
Please tell us why you were not able to complete the purpose of your visit today.
Let’s look at feedback provided specifically by those who stated they came to the web site to research a specific model (Purpose of Visit), and see how successful they were in accomplishing this task (Task Completion) based on when they were planning to purchase a vehicle (Purchase Horizon):
It appears those with shorter purchase horizons (0-3 months) were noticeably less successful in completing their task than those with longer purchase horizons. The client is understandably concerned that these visitors' expectations were unfulfilled, so they dig deeper to root out the cause(s) of this issue.
Using Text Analytics, they scour the open-ended feedback from the Failed Task Completion question for those with short or long purchase horizons, and found the following type of feedback*:
Short Purchase Horizon (0 – 3 months)
- I spent 15 minutes using the car configurator, and there’s no way I can search for dealers that have a car with the exact same build?
- I couldn’t get a price that includes taxes, discounts and subsidies.
- There are no dimensions for cargo area and inside the vehicle, ground clearance and overall length of the vehicle. This is crucial info.
Long Purchase Horizon (4+ months)
- Looking for info on the new model I saw on TV... guess I’ll just come back later
- Where’s the MSRP for the 2019 models? Couldn’t find anything concrete…
- The site is confusing if you’re not familiar with the company’s vehicles.
Those with shorter purchase horizons appear to be hitting snags when it comes to more detailed vehicle information, while those with longer purchase horizons are seeking more high-level details to help them build their consideration set.
With these insights, the client can coordinate with key stakeholders internally to determine how they can address these potholes in their existing customer experience.
Marketers must be ready for their customers each step of the way
We live in an age where your customers have the flexibility to shop for what they want, when they want, however they want. Whether they’re browsing online or speaking to a representative, they are often interested in setting their own pace, and often leveraging multiple channels across their customer journey in order to do so.
What customers need and expect from your brand can evolve as they get closer to making a purchase, and marketers must ensure they have the means in place to deliver when the time comes to ensure a positive customer experience.
With the help of the 'Purchase Horizon' metric, you can gain the ability to better segment and understand your customers’ experiences so that you can better meet their needs each step of the way.
Did you like this post? Make sure to check out these other posts in our ongoing Customer Experience Metrics Series:
Banner image source: Markus Spiske on Unsplash