How Well Do You Know Your Customers? - The 6 Types Of Online Buyers (according to Richard Stokes and entrepreneur.com)

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In his book Ultimate Guide to Pay-Per-Click Advertising, internet marketing expert Richard Stokes helps you master advanced search engine strategies from top search engine marketers to increase your sales. In this edited excerpt, the author describes the six types of shoppers who make online purchases and what channels they use to find what they want.

Way back in the Bronze Age of paid search (2007), selling online was much simpler than it is today. Consumers would go to a search engine as their first choice (usually), click a few ads and buy from one of those advertisers; price may have played a part, as did the landing page. Comparison shopping engines played a smaller role, and to a much lesser extent, display advertising did, as well.

Nowadays the landscape is much busier. Buyers can learn about your business through a variety of channels, including:

This is further complicated due to the fact that there are no linear paths between these different channels. Consumers may--and do--choose between these options almost randomly.

Or so it would seem.

In May 2013, digital think tank GroupM Next released a study that made sense out of the chaos. In this research, the company examined more than 168,000 purchases of consumer electronics, with the goal of finding out where digital buyers go online and why.

It discovered that there were elegant patterns contained in the data. Six distinct segments of online buyers emerged. These six segments took six different pathways, relied on some channels more than others, and took varying number of steps prior to making their purchases.

Nearly one-third (29 percent) of online buyers fall in the group, "Basic Digital Consumers." This group is comfortable making purchases online. They utilize search, retail sites and brand sites. They aren't highly mobile or social. They buy in much the same way that most consumers did back in the "good old days."

The second group is called "Retail Scouts" and makes up 22 percent of buyers. This group makes fast purchase decisions (averaging only three steps per purchase). They prefer search and retail sites (such as Amazon and Walmart) to brand sites, and they're likely to use mobile and tablet devices, even from within the home. They're the most receptive group to digital coupons.

The next segment, "Brand Scouts," are similar in size to the preceding segment (20 percent). They make fast decisions as well and similarly place great reliance on paid search but prefer specific brand sites to retail sites (and thus are more loyal as a whole). They're less likely to base their decisions on price and depend more on features and perks such as free shipping and money-back guarantees--a fact you should consider in your paid search campaign.

The fourth category (which makes up 16 percent of consumers in the study) is the "Digitally Driven Segment." This group is highly mobile and social. They value convenience and will go to great lengths to avoid going to a store. They're also more receptive to advertising: Buyers in this group are 30 percent more likely to find ads valuable than other groups (especially paid search ads).

The fifth group, "Calculated Shoppers," takes a long time to make a purchase (14 steps on average). They're in no hurry and will carefully consider all their options to get the best deal. Buyers in this group are likely to be "showroomers" and will use their mobile device to price compare when they're close to a purchase. This group is highly likely to use search and are responsive to advertising that offers discounts and specials.

The final group covered in the GroupM Next study was "Eternal Shoppers." This is a small group, made up of only 2 percent of the purchasers, but they stand out in the extremely long path to purchase (35 steps). They'll research their purchases on virtually every online channel but typically use paid search to navigate between them.

Did you notice the common thread shared by these six categories of digital consumers? Every one of them relies heavily on paid search at some point in the purchase lifecycle. This finding was further corroborated by a separate 2012 study by Google and Shopper Sciences in which they found that search was utilized by 50 percent of shoppers when making purchase decisions.

No other channel--not social, not mobile, not even retail sites--is utilized to the same extent as paid search. In fact, search scored about the same as "talking with friends and family about the product" in the Google study. This means that advertisers who fail to run effective paid search programs will be at a severe competitive disadvantage to those that do (and especially the top one percent).

The GroupM Next study provided advertisers with a number of valuable insights regarding other channels such as brand sites, Amazon, mobile and social. However, relative to our focus on paid search, here's a brief recap of what the study teaches us about reaching each of the six buyer segments: