Todd Pruzan, Senior Editor for Research and Special Projects at Harvard Business Review, recently interviewed Gautam Ramdurai, Group Marketing Manager, Ads Marketing, Google Asia Pacific, for a new episode of HBR Video Quick Take. Since every business today needs to navigate a complex matrix of factors that drive sustainable and profitable growth while keeping in mind that the core of doing so is still about understanding customers and how they make decisions, Pruzan spoke with Ramdurai about new insights into emerging consumer behavior across the Asia-Pacific region.
Todd Pruzan, HBR
So much about consumer behavior seems to be in continual motion. What kinds of changes are you seeing in consumer behavior across Asia-Pacific right now?
Gautam Ramdurai, Group Marketing Manager
The things that we’re finding right now are fascinating. And what’s particularly important to notice is what is truly different about 2023 versus, say, 2020 and even 2022. We know the pandemic fundamentally shifted so many things, but I think as we’ve come out of the pandemic, other crises are stepping in: political turmoil, climate change, and the cost-of-living crisis. When all these kinds of public crises come together, we need to start thinking about the total effect they have. And the answer is this: We are entering a truly hybrid world.
Think about how everyone went online during the pandemic. But then, as we’ve come out of the pandemic, when you’ve thought about your grocery shopping, how have you decided which items to buy in store versus which items to buy online? There’s this complex calculus that goes on in everyone’s head for even the simplest of decisions just because of the number of factors in the decision itself and the number of channels you’re getting information from. For example, think about the number of devices you interact with, and then multiply that by the number of channels you use, from Google Search to YouTube to any other video platform to newspapers. You navigate in and out of the online and offline worlds. And even within the online world, there’s so much multiplicity, and you try to find your way out of it. That is getting very tricky in 2023.
So across Asia-Pacific, our research tells us that the gap between wondering and knowing — which has always existed — has never been this wide. And that’s what we refer to as the confidence gap.
Todd Pruzan, HBR
OK, so trust and confidence are big factors today more than ever, but how are consumers navigating this landscape? How are businesses navigating it?
Gautam Ramdurai, Group Marketing Manager
Let’s start with consumers. Consumers are smart. They’ve always been better at keeping up with the times than businesses will ever be. So what consumers have done is found their internal calculus fairly quickly. In other words, everyone has these decision factors that they go through and these information sources that they’re going after to make their decisions.
Let’s take an example of someone wanting to do something: I have a three-year-old, so I have been thinking about when my three-year-old should be riding a bike. And that’s a big moment, right? So when a consumer thinks, “Oh, I need to buy a bike for my daughter,” the first question is never “Where do I buy bikes?” Rather, it is “What is the right age for children to ride bikes?” It’s a more foundational life question and a curiosity-driven question. You start with a question regarding the right time for a child to ride a bike, and then you slowly transition into researching what kinds of bikes there are. You end up getting sucked into videos of kids trying to learn how to ride a bike for the first time. You quickly realize you need to purchase a helmet as well.
This curiosity path expands the process during which consumers are finding the right information. And as consumers are navigating all this, we found that what they truly look for are six particular confidence cues. These cues are signals amid the noise; they are things that will tell them what they need to know to get closer to being confident in their decisions.
So imagine you’re in the confidence gap. You’re stuck there and don’t know where to go next. You’re letting your curiosity guide you to the next questions. We found there are key pieces of information that bring everything together during this process. One of the confidence cues, for example, is reviews. Is this company that manufactures this particular bike well reviewed or not? Does this company have a reputation for being a company that makes safe bikes or a safe company overall?
There are other things that matter too, such as social proof. And sustainability is becoming more important, so a company’s having sustainability practices is becoming a bigger and bigger piece of purchase consideration.
Surprisingly, we found an additional, implicit cue. This seventh cue is really about platforms.
Today there is a plethora of digital information, and I know I am preaching to the choir here when I tell you that the digital world is expanding. The number of information sources people have is more than they have ever had before, and with all that comes a lot of disinformation and misinformation.
In short, the platforms themselves are playing a much bigger role in 2023 than we have seen them do before. They become this seventh cue regarding how much trust you have in the platform itself where you are getting your information. It’s like looking at two different news sites and deciding which one you trust more. That same logic is now moving on to the world of platforms: The platform where you look at all your information or find your information is actually as important as any of the other confidence cues that the brands or the businesses themselves might communicate to their customers.
Todd Pruzan, HBR
So the platform has to be part of your daily life. It has to be safe. It has to be a platform that you trust, almost the way you would trust the word of one person over another based on what they’ve told you in the past. The platform is key here?
Gautam Ramdurai, Group Marketing Manager
Yes, and that’s what we’re seeing across multiple platforms, especially Google and YouTube. With a site like Google, where in times of uncertainty people go to find out something, it’s almost like a library of human intentions.
So while there are six cues that the brands themselves can look at, it’s not just about what you say in those six confidence cues. Rather, it’s where you show up with those confidence cues that’s equally important.
Todd Pruzan, HBR
So the medium really is the message or a big part of it?
Gautam Ramdurai, Group Marketing Manager
Correct. I would say it is a big part of it, because the medium can never be the full message. You own your brand. You know the truth that it wants to speak to the world. But I think the complications right now — and this goes back to our research on what is unique about 2023 versus ever before — involve needing to think about the calculus that the consumers have to go through. Then we need to pair that with the calculus that the businesses have to go through. So if the consumer doesn’t find the right information, at the right time, in the right place, and in the right medium, they’re going to drop out of their purchase journey.
Todd Pruzan, HBR
Wow, it sounds like that’s a pretty fragile transaction there.
Gautam Ramdurai, Group Marketing Manager
Absolutely. And everything is back on the table. Intuitively — and this is part of a discussion I was having with someone yesterday — you would think, “Oh, in times of uncertainty, we’d go back to the things we know.” But what we’re seeing is people are actually spending more time researching even if they have had brands that they’ve used for a long time. So it’s almost like the pandemic has heightened this need for trust and confidence to such an extent that people are moving their tried-and-trusted brands to the back of the table. What that means is you cannot take trust for granted.
Again, going back to transactional trust, it’s not built when the person has bought the product. It’s built when the person is thinking of using a product; it’s built when the consumer doesn’t even know they have the need for the product. So if you go through the entire consumer journey, you need to be able to establish those confidence cues across the whole board.
And it doesn’t end when they’ve bought your product. The more important part of the journey is when they’re actually using your product or your service. That customer experience doesn’t end at the buy button. It almost starts there in many ways.
Todd Pruzan, HBR
If trust is important to consumers, how does this start translating to business outcomes?
Gautam Ramdurai, Group Marketing Manager
In 2023, it has a pretty direct impact. If consumers are looking for information to build up their confidence about buying your product or your service, how you show up is super important. If you don’t show up the right way, it has direct implications on your bottom line. For example, in both India and Southeast Asia, one in three consumers decided not to buy a brand they were considering already because they felt a little anxious. They were not assured of their choice.¹ So that’s an abandoned cart right there.
And we’re seeing the positive side of trust show up in a big way as well. If you’ve done the job of being with your customers/consumers throughout their buying journey and their overall purchase experience, and you’ve built and fed into that trust account, highly trusted brands are seven times more likely to be purchased² — and it doesn’t end at purchase. Consumers who are confident in their product choices before purchasing are almost 20% more likely to repurchase that brand.³
Plus, the consumer journey is cyclical, so the trust and confidence you’ve built with your consumers don’t end when they hit “Buy.” It almost starts there. And if you want to continue building that virtuous loop of trust and confidence, you need to step up everywhere, even when they’ve already bought your products. We’re seeing this come through very clearly in the data. So for the confidence-seeking consumer in 2023, all brands are back on the table, and it’s up to you as the seller to choose whether you want to be part of that transaction or journey.
Todd Pruzan, HBR
What can businesses do to keep up with what their customers need? And how do you see that changing over the next few years?
Gautam Ramdurai, Group Marketing Manager
Once someone has gotten all the signals they need to make their choice, that’s when we think they’ve made a confidence shift: You’ve helped them find the answer to that life question, and your product or service is a part of that. We think businesses that are smart and able to power this confidence shift are the ones that are going to thrive in this very messy future — and present, for that matter.
But when you start thinking about how your business can help them make the confidence shift, you need to know which cue to show, when to show it, and whom is it for, because all your consumers are probably not built the same, and all of them are not in the same part of the journey. These are all moving targets: the right cues, right consumers, right formats, right messages, right devices, and right points in the decision journey. The only way to start making sense of this — and these are all predictive decisions in a lot of ways — and to do it at scale, and for large companies, especially, in milliseconds, is by harnessing the power of data and AI.
Again, this brings us back to whether you want to be a transactional business or a business that builds trust and confidence over time. This is an investment that you need to make across the entire customer experience. The gold standard of campaigns used to be that you’d have and meet just one KPI a quarter, but we’re moving away from that. Now the gold standard is whether you can drive new customers who also have high lifetime value. Those used to be two different meetings in the marketing rooms, but now they’re being mushed together. The way to unpack this complexity is with data and AI.
Todd Pruzan, HBR
Gautam, thank you for your insights. Do you have any parting words today, especially about how you are going to find that bike for your daughter?
Gautam Ramdurai, Group Marketing Manager
What a complex question! There are many life questions that exist when it comes to buying that bike. I need to keep the following in mind as I navigate that path: We know that life is a lot more complicated and complex than it has been before, and we don’t know what the next set of uncertainties will be. We also know that they will come; there will be more uncertainty.
Regarding the confidence gap that has always been there, consumers will still find themselves in it, and maybe it will widen. Maybe the confidence cues will evolve. But I think we have to keep our ear to the ground to understand our consumers’ decision making if we want to know which cues they need. Our job is to help them make that confidence shift, and that will only become more and more important as we move into the future. The world of complex decision making is here to stay, and the businesses that invest in their ability to make that confidence shift with the power of data and AI are probably the ones that are going to thrive in this environment.
Todd Pruzan, HBR
Thank you so much for a great conversation and for all of your insights today.
Gautam Ramdurai, Group Marketing Manager
Thank you, Todd, for having me.
Todd Pruzan, HBR
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¹Source: Google/Kantar/Quantum, “Emotional Value of Search”, IN, ID, VN, MY, PH, TH, PK, 2021, n=5006 P18M category buyers.
² Source: Edelman, “Trust, The New Brand Equity”, 2022, n=14,000 consumers across 14 countries.
³ Source: Google/ Ipsos, Decoding Repurchase, AU, IN, ID, JP, KR, VN, 2023, n=1500 per market, Buyers of Home appliances, Personal care, Health and wellbeing products.
