What is Post Purchase Behavior, & Why Should You Care?

Are you leaving money on the table by ignoring the post purchase behavior of your customers? Read on to find out.

By now, the idea that “the sale ends with the sale” should sound totally ridiculous to retailers. Whether or not the customer walks away feeling satisfied or dissatisfied plays a large role in your relationship with them. Post Purchase Behavior is really just the battle between cognitive dissonance and customer satisfaction. We’ll see why you shouldn’t ignore post purchase behavior before diving into the benefits of a positive experience. First, what is the post purchase behavior definition? It is the final stage in the customer journey. This is where they assess whether or not they are satisfied with their purchase or experience with your brand. Any future action by this customer will be ultimately be determined by one of two attributes; satisfaction or dissatisfaction.

Therefore, this is the stage that serves as the deciding factor between profitable customer advocacy and retention or disloyalty. Their level of satisfaction plays a direct role in your business “surviving or thriving.”

Post Purchase Dissonance, or buyer’s remorse, is the result of customer dissatisfaction. It occurs when the customer experiences feelings of psychological tension or anxiety after shopping with you. This has numerous causes, but ultimately boils down to their pre-purchase evaluation not lining up with the actual outcome. They are forced to ask “Did I make the right decision buying this particular product?”

Obviously this can be based solely on the quality of your items. However, sometimes it could be that the customer was exposed to the marketing of a competing set of products or brand. When this happens they believe that their previous information search didn’t justify the product purchase like they thought it would. It is also possible that the customer has reconsidered how immediate their original need for the item was.

Dissonance leads to disloyalty, and customers who experience this won’t be likely to return. We’ve written further about the concept of Post Purchase Dissonance (and how to avoid it) in a prior blog article.

With that said, what are the benefits of a successful post purchase experience? When the customer’s expectations are met and their purchase decision is validated, you can look forward to three big increases.

Increased Customer Retention

Ideally brands should attract new patrons through superior value (and good marketing) while continuing to grow them by delivering customer satisfaction. Following this process leads to increased profits and customer equity.

Acquiring a new customer can actually be up to 5x more expensive than retaining one who has already shopped with you. Even just a small bump in customer retention can make a huge difference to your bottom line. In fact, even a 5% increase in customer retention can boost profits up to a staggering 95%!

Marketing to new customers is still an essential part of running a business, but data shows retention is more important. The likelihood of selling to a new customer sits somewhere between 5-10%. Compare that with the 60%-70% chance you have of selling to existing customers.

A recent study conducted by American Express revealed the effect of customer satisfaction on retention. It stated that customers were 33% more likely to switch companies after just ONE bad customer service interaction. Without a good post purchase experience, you will likely lose their business in the future. Even if a consumer buys a product they absolutely love.

On the other hand, customers who have a great experience with you are 81% more likely to come back! Post purchase behavior marketing at it’s finest.

Increased Brand Advocates

After you’ve succeeded in retaining a customer, the next step is to turn them into a brand advocate. These are influencers in social and cultural circles, with the ability to get more eyes on you. Considering that 80% of businesses are not using advocates to their advantage, it means less eyes on your competition as well!

Small Business Trends discovered that 85% of smaller retailers are actually discovered by word of mouth marketing. If this number seems unrealistic, consider that 92% of consumers are looking to social recommendations before making a purchase. Putting this into context, search engines were the closest discovery tool (59%), with everything else very far behind.

How does word of mouth marketing have such a strong ability to influence the decision process of a new customer? The answer is simple, passion. Brand advocates are low maintenance and very effective in organically growing your visibility. They provide free marketing based on their genuine love for your brand, not a pay off, providing an unbeatable ROI.

New customers place a much higher value on Earned Media, or that which has been generated by “real” people. 76% say they prefer this over Paid Media, which they see as a thinly veiled attempt at advertising. This provides credibility to help you stand out against the competition and convert customers.

Brand advocates also broaden your reach. First they achieve this by connecting you with their own social network. Later, as your audience grows, the general public will begin to pick up on you as well. Brick by brick you build a loyal following by delighting your customers enough to advocate for you!

Increased Internal Productivity

 

Taking care of unhappy customers is hard work for your team, especially those in the service department. That’s why our final point doesn’t focus on your customers per se, but your staff. Engineering a good, thoughtful post purchase experience keeps your employees happy while freeing them up to work on other things!

Team morale and retention are directly related to the customer experience. Zendesk, a leader in customer service software, directly ties patron satisfaction to that of your agents. They call this concept ASAT, or Agent Satisfaction.

They recommend measuring the ASAT metric alongside CSAT in equal parts. Doing so will provide a more complete picture and reveal potential internal problems and lessen employee turnover. By creating a positive environment for your agents you enable them to delight customers with an excellent experience.

A proper post purchase experience proactively notifies customers about key events and empowers them to solve issues effortlessly through self-service. Doing this avoids the recurrence of common customer service phone calls such as, “Where is my order?” The average cost for each WISMO call is $5.05 according to Adobe, so mitigating these is crucial for profit saving.

Conclusion

There’s a lot to be gained by analyzing the post purchase behavior of consumers. Studies show that profitability can be negatively affected by treating the point of sale as the end of the customer journey. Between increased marketing and operational costs, it really starts to add up fast. By putting your customers first you will reap the rewards of loyalty, retention, and advocacy.

See how WeSupply’s solution can help you engineer this experience today!