How Location Data Influences Consumer Buying Decisions

The inconsistencies might seem minor, but slight differences in the way a merchant’s business information is listed on search engines and directories are enough to turn off potential customers, according to new research from YP. The local marketing solutions provider teamed up with Thrive Analytics and the Local Search Association to survey more than 5,000 U.S. adults about their local shopping activities. The results, which have been published today in a new report, show just how important it is for local businesses to stay active on digital channels and connect with consumers, regardless of what devices they’re using.

According to YP’s report, more than one-third of consumers (37%) won’t consider local businesses with inconsistent information online, and 32% won’t consider a business with the wrong information listed on its website. Even inconsistent messaging and website content is enough to dissuade multi-channel shoppers.

More than one-in-three consumers say their buying decisions are influenced by a business’ location. While there’s nothing a merchant can do about his or her store being too far away from a shopper’s home, YP discovered that there are things merchants can do to make their businesses more attractive to smartphone users who listed location as an important factor. For one, merchants can check to make sure their store locations are showing up when consumers search for “nearby businesses” on their mobile devices. They can also add click-to-call features to their websites and paid search campaigns.

“What businesses should be doing better is to make sure they have a comprehensive plan in place that gives them a strong online foundation and presence that is optimized for the desktop and mobile devices,” said Holly Bowyer, VP of portfolio marketing at YP.

More broadly, YP found that consumers value two types of information when they research businesses online, which fall into the categories of basic and secondary. Basic information includes relevant prices and location, while secondary information typically includes ratings, reviews, and special offers. Although the study found that price was the most important factor in determining which business a consumer visited, that was followed by products/services offered, availability of the service, customer service, and location.

Interestingly, YP discovered that consumers who make buying decisions based on secondary information spend twice as much money, on average, as those who rely on primary information. YP also looked to answer the question of what types of secondary information these high-spending consumers are looking for, and they found that offers are the most important type of information, followed by testimonials or reviews, and personal recommendations from family and friends.

“Many of the reasons consumers choose one business over the next are linked to the business’ online presence—something that a business owner can control by correcting misinformation or inconsistent information, encouraging customers to write reviews and sharing video or photo content,” Bowyer said.

Although primary information is important to all consumers, with little to no difference across industries, the research found that the importance of secondary information does vary between business categories. For this report, YP focused on eight business categories, which included home improvement, healthcare services, personal care, automotive services, entertainment, pet care, moving and storage services, and legal services. They found that consumers looking for home improvement products or services value secondary information like testimonials, ratings and reviews, recommendations from friends, and being familiar with the business, over others to help them decide. In the personal care category, however, consumers would rather have coupons and deals, testimonials, ratings and reviews and photos or videos of the business to help them make buying decisions.

“Businesses that have just basic information available without secondary information could be losing out to the competition one out of every two times,” Bowyer said. “What’s more, those customers who use secondary information to make a decision are more likely to spend two times as much.”

Stephanie Miles is a senior editor at Street Fight.