By: Alicia DeGeest and Sara Steever

Rural Lifestylers are Changing the Way They Research

and Buy Products

Paulsen Marketing conducted a three-month study in 2011 to better understand how online communities, brand advocates and customer reviews influence the purchase decisions of rural lifestylers.

The study involved 13 personal interviews with rural lifestylers in the Midwest, as well as 341 completed e-mail surveys of rural lifestylers in a random representative sample of the United States in C and D counties. For the purpose of this paper, we are defining a rural lifestyler as someone who is living the country life, but not necessarily trying to make a living at it.

1

Executive Summary

Rural Lifestylers are Changing the Way They Research and Buy Products

How online communities, brand advocates and customer reviews influence purchase decisions.

2

From this data, Paulsen Marketing was able to report three key findings:

1. The rural lifestyle consumers are adopting social media practices at the same rate as general consumers.

2. Like general consumers, rural lifestyle consumers rely on two different types of influencers to help them form brand perceptions and make purchase decisions: micro influencers and macro influencers.

3. The sales process has been altered to reflect a continuous feedback loop between current customers and prospective customers.

A negative online review from an unknown current customer (micro influencer) or a positive engagement with a trusted thought leader (macro influencer) is available to rural lifestylers at the click of a mouse or a tap on their mobile device. In other words, the sales process does not necessarily end with a sale — it is just the beginning of the next sale. Additionally, the timeframe from consideration to purchase can be significantly compressed.

As marketers, our challenge is to find the right marketing mix and messaging to reach rural lifestylers in an era where the purchase process includes powerful new influences.

Paulsen Marketing in Sioux Falls, South Dakota, specializes in rural lifestyle and agricultural marketing. For further details regarding this study, please contact Alicia DeGeest.

605-336-1745 • www.paulsenmarketing.com

3

How do rural lifestylers make purchase decisions today?

Does social media have an important role in their decision-making process?

How critical are customer reviews?

Who do rural lifestylers trust in their online community?

To find the answers to these and other questions, Paulsen Marketing surveyed rural lifestylers all across the country. Their responses provided great insight to how this unique audience segment continues to embrace new technology, engage in social media and change the traditional sales process.

Locations of January 2011 e-mail survey of 341 rural lifestylers in C and D counties across the United States.

4

How do rural lifestylers make purchase decisions today?

Without a doubt, rural lifestyle consumers are adopting two-way communication practices, particularly social media, at the same rate as general consumers. As a result, they feel more empowered to reach decisions outside of brand propaganda. This consumer control revolves around gaining information and communication from influencers while moving through the purchase process.

Today, influence has a great impact on each step of the purchase process. Rural lifestylers turn to third-party verification of information, often online, before making a purchase decision. This has created a new sales process that does not necessarily conclude with a purchase. Purchase leads to experience. The experience is shared online, which exerts influence upon the next prospective sale.

5

As marketers, our challenge is to find the right marketing mix and messaging to reach rural lifestylers in an era where the purchase process includes powerful new influences.

The Modern Purchase Process

Step 1: Awareness

Step 2: Consideration

Step 3: Evaluation

Step 4: Purchase

Step 5: Experience

Step 6: Influence

6

Rural Lifestylers are as Tech Savvy as General Consumers

Although technology may be assumed as a barrier to the rural lifestyle audience, according to studies by Successful Farming and NAFB, their levels of Internet access and use of Internet-enabled mobile phones are virtually that of the population as a whole.

Nielsen predicts 49 percent consumer penetration for smartphones by the end of 2011. A recent study conducted by Successful Farming shows producer adoption rate might be as high as 43 percent already.

As agrimarketers, we often forget that producers and rural lifestylers are almost identical in behavior to general consumers. Here are examples from those interviewed for this paper.

Leslie, Colorado 11 Quarter horses, 1 award-winning reining horse, 2 dogs Technology: Admits to being an early adopter. Has to have the latest and greatest.

Kevin and Sonja, South Dakota 30 Paint horses, 4 dogs Technology: Use Google search to find horse and machinery information.

7

Annette, Minnesota 4 horses, 2 dogs, 75-acre family farm Technology: Going to get the new BlackBerry.

Ken and Pam, South Dakota 3 horses, 1 dog, 5 acres Technology: Use Facebook and Google to research products.

Leon and Kim, Iowa 50 Arabian horses, 14 clients, 50 acres Breed, raise, sell, board, lessons, train Leon is an international Level-1 Judge with judging cards in various disciplines. His daughter-in-law, Kim, co-chairs international horse shows. Technology: Two iTouches, use iPad to show horses they raise while at shows.

Kevin and Jan, South Dakota 5 acres, enjoys mowing, snow removal, digging, gardening Technology: Droid with Internet access, wi-fi laptops, Bluetooth phone to car speakers, microwave Internet, “I am amazed at the Internet…didn’t think I would use it as much as I do; it’s wonderful.”

8

Kevin, Iowa Partner in a 3,200 gallon-per-year winery, 75 acres Technology: Waits to purchase new technology until the bugs are worked out.

Tim, Iowa 12 acres, small herd of cattle and sheep, family actively involved in 4-H Technology: “This little phone I’ve got in my pocket is as powerful as the computer that I used when I first started working, and maybe even more powerful.”

Tai, Iowa Owns 10 acres, rents 20 acres, farms exotic poultry, birds and large market garden Technology: Droid, Kindle, desktop, laptop, Netbook, wants an iPad, has a blog and Facebook account for poultry business.

Doug, Iowa 3 horses, 3 donkeys, chickens, sheep, trained border collies, cats, avid gardener 7 acres and rents 160 acres to a cattle rancher Technology: Receives e-mail on smartphone, iPad, “I am online all the time.”

9

Debbie, Kansas 3,000 acres and 500 head of cattle Technology: “I always take my iPad; I take notes on it pretty frequently.” “The best way to reach me with a marketing message is online, somehow digital whether it’s e-mail or through Facebook.”

MaryAnn, Kansas Large cattle ranch Technology: “I shop online a lot because I live in the middle of nowhere.” Has Facebook on her phone.

Lisa, Minnesota 15 acres, recently sold horses, 2 dogs, 5 cats Technology: “A text on my phone is the best way to reach me.”

10

Social Media and the Power of Opinion

The accessibility of technology allows online activity to be as prominent for making purchase decisions as it is for general consumers. Rural lifestylers seek information, reviews, ratings and recommendations online. This increased online activity is an addition in the decision-making process.

Rural lifestylers turn to others with whom they have varying degrees of trust. They are more likely to seize control of the process and actively pull information helpful to them. Consumer-driven marketing activities, such as Internet reviews and word-of-mouth, in-store interactions and recollections of past experiences make up two-thirds of the touch-points during the purchasing process.1

Those resources will be tapped to help provide focus to any number of brands during the steps leading up to a purchase. The impact of these interactions is so great that rural lifestylers may confirm or destroy their purchase decision.

In the end, they remain engaged with the brand through social media after the purchase, which in turn influences others in the purchase decision-making process.

1 David Court, Dave Elzinga, Susan Mulder and Ole Jorgen Vetvik. “The Consumer Decision Journey.” McKinsey Quarterly. Marketing and Sales Practices (June 2009)

11

Marketing Take Away

Consumer reviews impact each step of the purchase decision-making process. Rural lifestylers are very active in social media spaces, often seeking advice from influencers.

If it is a major purchase, something that takes a little more thought, I jump on the Internet and I do my research first.

“”

“ ”Usually I’ll look online for information about a product or people’s testimonials.

12

The statistics below are from our surveys conducted in January 2011 of the rural lifestyle audience. This reinforces the various stages where online activity is prominent.

Results from our January 2011 survey of 341 rural lifestylers across the U.S.

Rural lifestylers read animal blogs or information websites

5 out of 6

Participate in animal online forums or other social media

6 out of 10

More than 1/2

Ask for product advice online

75%

99%

98%

Shop for products and purchase online

Of those that shop online

read product reviews and

write product reviews

13

Macro and Micro Influencers

We believe there are two types of influencers that have decision-making impact on potential customers; macro and micro influencers. These influencers are sought out while making purchasing decisions.

Macro influencers have the most individual impact and the greatest influence among peers. They have always been a part of the decision process.

• Industry thought leaders

• Veterinarians and nutritionists

• Dealers

• Educators and research leaders

• Member organizations and peer groups

• Trusted and knowledgeable friends and family

“ ”I look for the experience of the people I know and trust.

14

Micro influencers have developed through digital media. They have some credibility, mainly through acquaintance or common interests. They could be a complete stranger who is similar to the buyer in some way.

• Social media friends

• Online communities

• Other shopping sites that contain ratings and reviews

“

“

”

Your friends, people that have some kind of connection with you, you trust their opinions more.

So often there will be recommendations on different products from people that I know and trust on Twitter.”

15

Marketing Take Away

There is a strong pattern of influence happening online among complete strangers with a common interest. While not as powerful as macro influencers, micro influencers are becoming more and more important to the decision-making process.

It gives me a little bit of feeling like, ‘Well, I haven’t made a bad decision.’ I mean, five other people who I don’t know agree that it’s a good product. I’m gonna feel a little more confident even if it’s ten dollars. I really do like reviews. I think it’s important.

“

”

16

What is the level of trust in influencers found online? And what is the impact of positive versus negative reviews?

MarketingProfs released findings on March 29, 2011 that provide insight on trusting online sources when making purchase decisions.

Fifty-nine percent of consumers say online consumer reviews and ratings influence their buying decisions more than any type of online advertising.

Fifty-four percent have decided to make a purchase based on an online review, while 58 percent of consumers did not buy a product based on an online review.

“”

It is pretty important to read those, not that I take everything verbatim, but it sways you.

17

The feedback we heard from our interviews confirms that rural lifestylers are savvy enough consumers to know if someone is spouting off, or if reviews are legitimate. They look closely at the source of the comment, whether macro or micro, as well as the context of the site the comment is posted on.

“ I consider both the positive and the negative. It’s a big decision maker if I see negative.”

You always have to filter out the bad ones. It comes down to using judgment. If there’s 100 great ones and two bad apples, well, I disregard those. If it’s half-and-half, then you start thinking, well there’s something wrong with this product.

“

”

18

Marketing Take Away

Build an advocate community of macro and micro influencers to support your brand in consumer reviews. Aspire for a handful of influencers who frequently share brand updates with friends versus merely having many with little value.

Negative reviews can really influence me. If it is a problem that keeps coming up over and over on the same thing, then I know it would really be true. Otherwise, a lot of negative things may be because somebody is disgruntled and I won’t pay as much attention to that as I do to a positive review from a trusted source.

“

”

19

Rural Lifestylers Rely Heavily on Online Search

How do rural lifestylers find online reviews? Search.

Search is an important way to bring influencers into the purchase decision-making process by bringing up not only product results, but product reviews, too.

Search engine marketing, search engine optimization and social media optimization efforts are critical to influence purchasing decisions.

I’ll actually put in as much information as I have. I’ll even enter the model number. Then I can see what everybody says about that model and kind of engine.

Just Googling the item. Then looking to see how it is rated; who has rated it.

“

“

”

”

20

Social Media

Not only are rural lifestylers seeking feedback from search engines, but they are also finding micro and macro influencers by asking questions on Facebook, industry forums and asking experts.

Rural lifestylers are very active in social media spaces. Here are comments on the use of Facebook, in particular.

It’s surprising to me how many more of my rural neighbors are online than you think. Older people...people up and down my road are all online and are all talking all of the time on Facebook.

“

”

21

Marketing Take Away

Search is an important way to bring influencers into the purchase decision-making process by bringing up not only product results, but product reviews, too. Use offline media to direct audiences online where there is social activity and relevant reviews.

I’m not Mr. Social Media, but it is a place where you talk to a lot more people on a regular basis even just reading their posts.

“”

People in rural communities depend on the Internet, and depend on their direct mail that comes through the Internet. Everybody I know is on Facebook.

“”

22

Point-of-Purchase Decision Activity is Changing

Many rural lifestylers hold off their final purchase decisions until they’re in the store or on an e-commerce site. Up to 40 percent change their minds because of something they see, learn or do at this point.1 When another brand enters as an option, the time needed for the consideration and evaluation steps of the purchase process is greatly condensed due to the ability to research on mobile devices in store.

Point-of-purchase interactions through mobile devices have become a more powerful touch point.

Facebook becomes a quick resource for opinions of influencers before a purchase decision is made.

1 David Court, Dave Elzinga, Susan Mulder and Ole Jorgen Vetvik. “The Consumer Decision Journey.” McKinsey Quarterly. Marketing and Sales Practices (June 2009)

I don’t trust the salespeople. I don’t trust the reviews on the website. So you tend to text your friends or Facebook your friends.

“”

23

As we already addressed, when it comes to technology adoption, rural lifestylers are general consumers with the same purchasing behaviors. And along with the rest of the population, they too have a growing addiction to smartphones. With 33 percent of American households now owning a smartphone, there is more opportunity to deliver unique content, without being in front of a computer. 2

While the exact numbers provided by research firms in agrimarketing vary, we are seeing that the adoption rate at the producer and rural lifestyle level is meeting, or currently exceeding, the national averages. This is partly because the farmer sector of rural lifestylers is using the smartphone as a business tool.

2 Deloitte’s fifth edition State of the Media Democracy survey was conducted from September 10 to October 8, 2010. The online survey polled nearly 2,000 U.S. consumers age 14-75.

You can post, ‘Has anybody bought a lawn tractor lately?’

“”

The mobile phone has come in handy because I can get the web on there so if I have a question I can go ahead and ask it.

“”

24

Rural lifestylers are becoming more familiar with bar code readers that pull up detailed information at the point of sale. Not only price comparisons, but also environmental and political actions about that brand’s parent company.

During our interviews we also heard feedback on the intrigue regarding QR codes. According to a February 2011 survey of U.S. smartphone users by MGH, a Baltimore social media marketing company, 32 percent of respondents said they have scanned a QR code. Of those, 53 percent said they used the code to get a coupon or discount. And 72 percent said they were more likely to remember an advertisement with a QR code.

We see the adoption rate for QR codes rising amongst rural lifestylers. Rewards received through scanning QR codes should be valuable and relevant to them. Deliver something that is not available elsewhere and is something worthwhile or surprising.

I use my smartphone frequently to check prices on different things while I am actually at the store. While I don’t want to buy it at another place, if it’s the exact same product somewhere else that’s a little cheaper, I can negotiate a price where I’m standing.

“

”

25

Marketing Take Away

Point-of-purchase interactions have become a more powerful touch point. Rural lifestylers are armed with mobile devices to scan QR codes and bar codes, as well as poll Facebook friends. Be responsive in social spaces when and where customers are asking questions.

Definitely, yeah, I would do that.” [when asked about QR Codes] “I’ve done the bar code scanner, so that would be interesting.

“”

26

Writing Reviews

After a purchase, rural lifestylers remain aggressively engaged, publicly promoting or assailing the products they have bought. As we revealed earlier, 98 percent of those in our e-mail survey who purchase products online also write reviews about a purchased product or service.

During our interviews we asked the same questions. It was interesting to hear that most reviews written by these folks were negative reviews. Surprisingly, a customer who did not develop a bond with the product during the initial purchase may turn into a positive influencer after trying a competing product. Keep in contact with “bad-vocates,” and ask for their testimony as they have substantial impact.

I do frequently write reviews on small purchase items as well as large purchases.

“”

27

It is important to intercept post-purchase behavior and encourage online sharing to reinforce and enhance relationships and cultivate influencers into brand advocates.

Consumer reviews impact each step as rural lifestylers navigate through the purchase decision-mak-ing process. By recognizing rural lifestylers’ purchasing behaviors, create a user ex-perience that matches their expectations, converts sales and builds relationships.

I hope that the company looks at the review as well. And makes their next version based on what the reviews are.

Yes, absolutely, if something is really awful I’ll write a review. I try to be fair.

“

“

”

”

28

These customer insights may extend past the marketing and bring an overall commitment to customer satisfaction throughout all areas like product development, sales and distribution.

No matter whether my question was positive or negative. I think that shows a lot of transparency and ability to connect with a consumer and listen to them. I would love to have a company respond back to what I post.

“

”

29

Marketing Take Aways

Consumer reviews impact each step of the purchase decision-making process. Rural lifestylers are very active in social media spaces, asking advice from influencers.

There is a strong pattern of influence happening online among complete strangers with a common interest. While not as powerful as macro influencers, micro influencers are becoming more and more important to the decision-making process.

Build an advocate community of macro and micro influencers to support your brand in consumer reviews. Aspire for a handful of influencers who frequently share brand updates with friends versus merely having many with little value.

Search is an important way to bring influencers into the purchase decision-making process by bringing up not only product results, but product reviews, too. Use offline media to direct audiences online where there is social activity and reviews.

Point-of-purchase interactions have become a more powerful touch point. Rural lifestylers are armed with mobile devices to scan QR codes and bar codes, as well as poll Facebook friends. Be responsive in social spaces when and where customers are asking questions.

30

This study identifies the important role of macro and micro influencers and their impact upon the Modern Purchase Process—especially as it relates to a rural lifestyle audience.

The question now is, how do marketers compete in this new environment?

The data and opinions collected for this study will be used to support additional thought papers in the near future. Paulsen Marketing will address specific marketing tactics to effectively reach the rural lifestyle market, create a positive online community, convert sales and sustain relationships. Paulsen Marketing will also provide additional insight and recommendations related to brand monitoring and social media measurement.

What’s Next?

Paulsen Marketing in Sioux Falls, South Dakota, specializes in rural lifestyle and agricultural marketing. For further details regarding this study, please contact Alicia DeGeest.

605-336-1745 • www.paulsenmarketing.com

the ag and rural lifestyle specialists

www.paulsenmarketing.com • 605.336.1745

3510 S. First Ave. Circle • Sioux Falls, SD 57105

Follow us:

We welcome you to continue referencing this study at www.paulsenmarketing.com/agri-thoughts.

A special thanks from Paulsen to all who participated in this study.