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Marketing and product development best practices for a fragmented economy The rules for marketing and product development have changed forever. You no longer control where and how consumers receive marketing messages. The consumer is in charge, with ever-growing choices and a shrinking decision window. Therefore, it is crucial to understand what drives customer behavior to design products, marketing, and experiences that will succeed. Laddering explains how to better understand your customers' core values. Learn to ask the right questions from your customers, use it to analyze your data, and unlock the true potential of your product or service. Use Laddering techniques to map your customer's DNA and understand why consumers buy from you. * Helps you look at your customers in a new way and as a result maximize your profits and reduce your support costs * Provides a framework for evaluating what marketing messages, campaigns and experiences are appropriate * Author Eric V. Holtzclaw is CEO and founder of User Insight, a user experience research firm and Laddering Works, a marketing strategy and consulting firm. His weekly radio show, The 'Better You' Project, shines a spotlight on entrepreneurs' business journeys, his column Lean Forward appears weekly on INC.com and he is regularly contributor to CMO.com. You must understand what is truly important in order to build relationships with consumers and to market for success in the new many-to-many economy. Laddering offers the tools and knowledge you need to thrive.
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Seitenzahl: 285
Veröffentlichungsjahr: 2013
Contents
Preface
Chapter 1: History
Edward Bernays
The Problems of Production
The Opportunity
The Rise of Mass Media
Keeping Up with the Joneses
Product Was Tangible; Information Was Scarce
Population Was on the Rise
Customization and the “Experience Economy”
Chapter 2: The Need for Laddering
The Answer: Laddering Your Consumer
Laddering Is Continual Learning
Laddering Uncovers Relationship
Laddering Is Long Lasting
Laddering Establishes a Common Language
Laddering Uncovers Influence
The Need for Laddering the Consumer
Chapter 3: Laddering Defined
Laddering in a User-Centered World
Laddering Understands the Consumer’s Context
The Inadequacy of Focus Groups
You Cannot Use Online Surveys to Conduct True Laddering
Start with What You Already Know
Chapter 4: The Steps to Laddering
Step 1: Have a Broad Conversation
Step 2: Document Their Environment
Step 3: Talk to Enough Consumers Until You Have Talked to Enough Consumers
Step 4: Make Sure You Are Talking to the Right Person (or People)
Step 5: Keep Your Data and Your Information Clean
Step 6: Keep the Conversation on the Topic at Hand; Avoid Distractions
Step 7: Your Results Should Make Sense at a High Level
Chapter 5: Confirming and Fine-Tuning Your Ladders
Blue-Sky Brainstorming
Talk to the Expert—the Consumer—to Confirm the Clusters
Create Targeted Questions
Quantifying the Clusters
Listening to and Learning from the Clusters
The Importance of Transitional Clusters for Reach
Chapter 6: Latticing: Finding the Overlap in Ladders
Take into Account Standard Demographics
Common Consumer DNA
Look for Overlap
Building the Construct
Can a Consumer Move between Clusters?
Using the Lattice for Better Measurement
Chapter 7: Lensing
Understanding Your Brand
Breaking Down Internal Barriers
Influence and Affirmation Has Changed the Buyer’s Journey
Stop Trying to Change Consumer Behavior
Staying Top of Mind versus Acquisition and Support
Content Source and Distribution Are Paramount
Identify the Primary and Secondary Clusters
The Result—Actionable Project Briefs, Product Roadmaps, and RFPs
Chapter 8: Practical Application of Laddering
Bringing the Consumer DNA to Life
Practical Applications of Laddering Knowledge
Chapter 9: The Way Forward
The Control of Consumer Preference
Not Buying a Product; Buying My Product
Creating My Own Experience
The Rise of Perfectly Imperfect
Desire for Connection and Authenticity
Less Control over Entry Point and Multichannel
The Rising Phenomenon of the Unseen Brand
It’s about Relationship
Index
Cover image: Michael J. Freeland
Cover design: © Anthony Harvie/Digital Vision/Jupiter Images
Copyright © 2013 by Eric V. Holtzclaw. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
Illustrations by Kaitlyn Holtzclaw
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Library of Congress Cataloging-in-Publication Data:
Holtzclaw, Eric, V., 1973–
Laddering: Unlocking the Potential of Consumer Behavior/Eric V. Holtzclaw.
pages cm.
ISBN: 978-1-118-56612-1 (cloth); ISBN: 978-1-118-65297-8 (ebk); ISBN: 978-1-118-65357-9 (ebk)
1. Consumer behavior. I. Title.
HF5415.32.H637 2013
658.8′342—dc23
2013008506
To my girls:
April, who is always my greatest cheerleader and my unwavering constant.
Kaitlyn, who is both the reflection of who I am and the example of whom I aspire to be.
Preface
The only constant is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be.
—Isaac Asimov
I LOVE TO travel. It’s the ultimate way to support my underlying need and desire for change—a new location every day, a new city to experience, new cuisine to try. My future self has no permanent address or day-to-day responsibilities. The world is a huge, ever-changing place that’s just too enticing for me to refuse. I absolutely must explore it, understand it, and consume it.
Until I can afford to hang it all up and travel the world endlessly, I have built a career that has supported my core need for something new, something different. The companies I have built or helped build have covered a wide range of industries and products. This experience has granted me a unique perspective and made me an expert witness to the dramatic and disruptive changes technology has had on how individuals work, live, play, and interact.
Unlike the typical stereotype of technically oriented people—who desire only to work heads down on coding or building something cool or new—I view technology as an enabler, a way to make life better and more efficient. I knew very early in my career that I wanted to understand both the technology as well as how its use affected or changed the world. But even with this slightly more open attitude toward technology, I still had a blind spot.
I thought I knew what my consumers needed. After all, I had been trained and educated on how to implement technology to meet a problem; they hadn’t. I was surrounded by other smart individuals who had equal or better experience deploying technology to consumers. What could we possibly be missing?
My passion for seeing technology from the users’ perspective was solidified in 1995. It was the first time I was ever in a lab like the one at User Insight. I was working for a company called Information America, a division of West Publishing. We were a skunkworks who’d been commissioned to take an outdated mainframe system that allowed electronic access to public record information to the Internet. (I kiddingly say it was the first nonporn website on the Internet that was actually making money.)
We were about a week from launch when the marketing manager suggested we take the product through something she called usability testing. As a computer science geek at heart, I thought she was crazy. What could the user know about a system that our incredibly intelligent team didn’t? I believed that the organizations supporting or selling the product needed to understand the technology, but I couldn’t quite wrap my head around how the user could provide any meaningful direction.
I went along with this idea because I honestly thought it would help the marketing manager out more than me. She was interested in understanding what most marketers would care about with this type of product:
What messages would resonate with consumers to make them use this new service?
How much were they willing to pay to search for or retrieve a record?
What concerns would they have about providing their financial or personal information?
So I begrudgingly agreed to play along in order to help her out—but threatened that it better not impact my precious timeline. As someone who always makes the dates in my project plans, I was concerned this distraction might derail our launch date.
The experience was very much like what you see on a television show when detectives interrogate a suspect and try to get them to admit to committing whatever crime is being investigated. My team sat huddled in a dark room behind one-way glass and watched a moderator take a consumer through a set of predefined tasks. They ranged from activities as simple as reviewing the site to understand what purpose it might serve to those that were a bit more complicated, allowing users to actually register and submit a search to see how they interpreted the results returned.
Fifteen minutes into the first user session, I was hooked—and my world had been changed forever.
The poor user couldn’t even figure out how to enter his registration information. He failed at understanding how to submit payment information, he didn’t know how to execute a search or interpret the results when they came back, and he wasn’t even sure how to start over when he made it down a path that didn’t meet his expectations.
In other words, it was a fantastic, beautiful failure.
The failure continued throughout the day as one consumer after another suffered through the same issues that the first had. My team started to desperately plea with them through the glass to “click that button” or “just scroll down.” At one point, I was trying to send telepathic messages to the individual to help end his suffering in trying to properly enter his credit card information. I remember saying out loud (and being reprimanded by the facilitator because he was afraid the consumer would hear me), “Just look at the example; it’s showing you that you need to break it up into sections. Why can’t you see it?”
We had made the classic mistake of placing the submit button just below the fold. As a result, the primary designer kept repeating, almost as if she had lost her mind, “Just scroll down; just scroll down.”
But no matter how much we tried to will the users from our darkened control center, they never learned. Each new user confirmed the system’s overarching issues—and often pointed out something new that we didn’t expect but needed to know.
My team walked out of that dark, cold room on a sugar high after consuming way too many M&M’s, gummy bears, and salty snacks. We were not in a state of despair, as you might expect; rather, we had a developed sense of humility and a renewed passion for fixing this product. We wanted our consumers to understand what we were trying to provide and wanted to remove the barriers that were getting in their way. An unintended but positive consequence of every experience we had in lab was a renewed team spirit.
This evaluation was one of the best team-building experiences I have ever taken a team through. For the companies who come through our process and take it seriously, I see it bond them in a way no corporate retreat or motivational speaker could ever accomplish. It’s especially amazing and fulfilling to watch individuals—many who have never met in person but work on the same product—introduce themselves in the lab and view what they have built through the eyes of a completely unbiased judge, a judge who can make or break the success of their efforts.
This initial experience did something incredibly crucial for me and my career. It opened my eyes to how important it was to look at whatever I was building from the perspective of the person who is intended to use the product. I immediately knew that if I was ever given the opportunity to create a company that worked in this area, I would jump at the chance. Eventually, it did lead me—along with my two cofounders—to build a company that became one of the fastest, highest-quality research companies in the world. We shepherded some of the largest companies and leading brands through the process of looking at their marketing and product development problems through their consumers’ lens.
The company that spawned from this early experience is User Insight, which conducts 150 research projects a year across 30 different industries and works with some of the world’s leading brands to understand why the products, services, and experiences they build work or don’t work. It is the ultimate laboratory for exploring the intersection of the human with technology. As cliché as it sounds, the world has changed, and I have had the chance to watch this change happen from the consumer’s perspective.
Over the course of just one decade, the world’s focus shifted, from selling what could be produced (mass production) to asking the people consuming the product, technology, and marketing message (mass customization) what they want.
The changes have happened so quickly, dramatically, and permanently that few people with whom I talk truly understand the impact. We are essentially numb to advances in technology. We have gone from being excited by the newest technological advance to expecting and quickly absorbing the “next big thing” into our ecosystem. And we give very little thought to how far-reaching the implications these new advances will have on the world in which we live.
I remember signing up for one of the first bill paying services in the mid-1990s. It took forever to get the bill set up in the first place, not to mention that the company was still cutting a check and actually sending it to the biller. I can remember telling my friends and family excitedly about this new way to pay bills. I knew that this was a significant transformation in the way financial services and end consumers would interact with one another moving forward, a noticeable and understood disruption. I was willing to overlook the inefficiency of this new system in order to participate.
If it takes longer than a few seconds to pay a bill nowadays, we are annoyed. The conversations and presentations at a recent payment conference I attended centered on how consumers would soon be able to pay for items without even taking their phone out of their pocket at a local coffee shop or restaurant. This is the new norm; it’s not considered earth-shattering, even if it is a dramatic departure from how commerce has been transacted in person to date.
An amazing amount of disruptive technology has been introduced over the past 20 years. I have had the unique opportunity to participate as an observer to and an agent of this disruption—a witness to how it has been implemented, why it’s important, and what the impact has been on the average consumer.
Personal computers, cell phones, the Internet, MP3 players, smartphones, apps, and social media are just a few of the more memorable advances that have become commonplace. And with each new advancement and related disruption, the environment has changed forever. Humans are resilient; they accept these changes and move on. This is one of our greatest assets—and the reason we sit at the top of the evolutionary pyramid. But as a result, we rarely stop to take an audit of what these changes mean; how they have, in turn, changed us; and how they influence the way we interact with the world around us.
The recent disruption that all of this technology has caused at such an amazing pace—as well as their reduced costs—have forever changed the development of all products, services, and experiences. As a result, product development and marketing must also make a substantial modification to the way they approach their jobs.
This most recent set of disruptions and advances has led to the long prophesied “rise of the individual.”
The point of this book is to synthesize conversations I’ve had and have overheard over the past few years into a sense of awareness, awakening and a change of focus to what’s really important. Marketing and product development teams need the same wake-up call I received on that first day of usability testing in the mid-1990s. They must focus on their consumer and see their marketing messages and products through the consumers’ eyes. Only then will relational marketing work and be implemented correctly.
The norms, and even industries, that we held true just a few short years ago no longer exist. This fallout is the direct result of focusing too much on what has worked in the past and not enough on what we need to do in the future. We must take a look at how we are building products, creating marketing messages, and determining the way forward differently than before.
The world is no longer operating according to business as usual. And without a realization of this change and a different approach moving forward, many more companies and industries are going to go the way of CDs, Blockbuster video stores, and Borders bookstores. Consumers are choosing the brands that understand and support them on an individual level, engage them through an authentic relationship, and give them what they want in the form that they want it.
The goal of the techniques I propose in this book—and practice in my work—is to accept and understand people for who they are, at whatever stage, personal or professional, they happen to be. I aim to understand how to talk to them at this core level to create a brand, experience, or service that meets their unique needs. And you should, too.
Companies need to learn how to thrive and accept the fragmentation that has occurred, not resist it. It’s not about one message or product; it’s about the right message or product. Companies must learn to support the individual as an individual and stop treating all customers like everyone else or treating them like they’re part of a group into which they may not self-select.
The big secret is that the core of a consumer rarely changes; it takes a life event, not a life stage to dramatically affect the consumer’s basic drivers. They simply manifest their core differently in different contexts or suppress it based on other influencers. Companies that expend the time and effort to truly understand this core instead of guessing or assuming are the ones who win. They become the brands everyone envies in our new relationship-driven, many-to-many economy.
And once you understand the core, the technology no longer matters. It becomes secondary. You view every product, marketing, or experience decision from the point of view of the constant: the consumer’s DNA.
As a practitioner of laddering, it’s important to me to explain how we got to where we are today. The first part of this book explains the rules we as marketers and product developers followed until just recently, why we followed them, and why, until just recently, they worked.
We are currently experiencing one of the most life- and industry-transforming periods of technology to date. You will find as you read through this book that each time a new disruption occurs, you must take time to review how it has affected the end consumer you are targeting or learn that the consumer you are targeting is no longer appropriate to your brand.
For those people who like change like I do, it’s one of the coolest times to be in the marketing and product development space. It’s time to create new rules, new ways of doing business and measuring success. And the very cool thing is that the secret to being successful in this endeavor is to do something that’s so basic to each of us as human beings that we have forgotten how to do it: we need to understand one another.
Laddering will teach you how to do just that.
Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.
—Tyler Durden, Fight Club, 1999
It’s a cold day in New York City in December 1918. World War I has just ended. Twenty-seven-year-old Edward Bernays ducks into a local drugstore to buy a Coca-Cola. As he sits at the pharmacy counter and enjoys his soft drink, he contemplates the new career he is about to begin. Edward is on the verge of a vocation that will impact the very product he’s enjoying—in addition to countless others that sit on the shelves of that drugstore and many other stores in the years to come.
Edward, the nephew of Sigmund Freud, has just completed an assignment working for the war effort as a part of the Committee on Public Information, a group that was instrumental in promoting the American dream of democracy across the world. After many failed attempts to enlist and help out with the war effort, flat-footed and nearsighted Edward finally landed a chance to serve. He managed to secure an interview after his dogged pursuit of Ernest Poole, the head of the Foreign Press Bureau of the US Committee on Public Information. During his tenure with the committee, Edward worked with companies such as Ford, International Harvester, and many other American firms to distribute literature on US war efforts to foreign contacts and by posting US propaganda in the windows of 650 American offices overseas.
Edward’s contributions to the Committee on Public Information helped make American citizen’s perception of what had been an unpopular war much more positive. He used techniques he had successfully mastered in prior endeavors, including promoting a play called Daddy Long Legs and working with a touring ballet called Ballets Russe.
As a result of his work, Edward was invited to travel with Woodrow Wilson and attend the Paris Peace Conference in January 1919. During his time abroad, Edward witnessed firsthand how powerful propaganda could be in influencing the general public’s belief systems. This experience further convinced him that one could indeed shape the behavior of the masses by understanding what instincts and symbols motivate individuals. Edward explained, “The impact words and pictures made on the minds of men throughout Europe made a deep impression on me. I recognized that they had been powerful factors in helping win the war. Paris became a training school without instructors, in the study of public opinion and people.”
And as it turned out, Edward’s schooling and realization couldn’t have come at a more opportune time.
Although the United States had left the war in a state of euphoria—and with the status of being the most powerful, richest country in the world—the country was facing several problems. American companies had perfected the practice of mass production primarily out of necessity to keep up with the demands of the war effort. Now that the war was over, they needed a way to maintain their prominence with this new capability. As such, they needed to address two problems, the first of which was that these companies needed someone to buy their products.
Before the ability to create products in mass was perfected, purchasers of goods were not referred to as consumers. This word comes from the Latin term consumo and means to “eat up completely.” Prior to the war, people bought only what they needed, primarily locally. Only the very wealthy participated in conspicuous consumption. Therefore, the definition of what an individual needed had to change to support mass production.
Consumerism and the concept of a consumer were invented in part to support and perpetuate the mass production cycle. Richard Robbins, in his book Global Problems and the Culture of Capitalism, explained it this way1:
[T]he consumer revolution of the late nineteenth and early twentieth centuries was caused in large part by a crisis in production; new technologies had resulted in production of more goods, but there were not enough people to buy them. Since production is such an essential part of the culture of capitalism, society quickly adapted to the crisis by convincing people to buy things, by altering basic institutions and even generating a new ideology of pleasure.
The second problem was that in order to mass produce something, choice must be limited. Henry Ford is famously quoted as saying the following when discussing the Model T in 1909: “Any customer can have a car painted any color that he wants, so long as it is black.”
For mass production to work, a product had to be standardized; nothing could be handmade, and everything had to be manufactured via machines and molds. The product’s assembly must permit workers with low skill levels to operate assembly lines where each worker does one task over and over again. For instance, a Model T assembly worker might spend every day putting the same screws into the same part of the vehicle chassis.
The introduction of variety or choice would require time to retool a very expensive process, or even more daunting—to create a whole new assembly line to take on the new work. The technology at the time simply didn’t exist to support the concept of choice.
Edward and others in his industry saw both of these problems as an opportunity to apply the principles of propaganda in a completely new way. They believed that propaganda could serve to move society from one of need to one of want. Furthermore, they believed that using the right symbols, words, and influences could convince consumers to buy the products that companies were creating.
Edward knew that he couldn’t use the word propaganda itself because it had been tainted by the Germans during the war. So he opened up a publicity direction office, which became what we now all know as public relations. This new office’s charter was to create demand for the products companies were already making—and to find ways to expand a product’s reach to new consumers.
Edward believed that if they approached customers the right way, those working in publicity direction could actually adjust the customers’ preferences—and get them to consume what an industry was already creating.
One example of this approach is the way in which Edward handled American brewers. The brewers hired him after prohibition was repealed in 1933 to put themselves in a stronger position than liquor makers.
To create demand for beer among those who usually indulged in alcoholic beverages, Edward touted beer as the “beverage of moderation.” It was an attempt to distance it from distilled liquor and set it apart as distinctive. He persuaded beer retailers to cooperate with law enforcement to ensure that their product was used responsibly, and he published evidence that beer was not fattening and had a caloric value equal to that of milk.
To expand the product’s reach to new consumers, Edward told homemakers that beer would make for richer chocolate cake. He told farmers that brewers were major buyers of their barley, corn, and rice and told laborers that beer was the one alcoholic beverage they could afford. In addition, he published booklets and wrote letters claiming that beer was the favorite drink of the ancient Babylonians and the monks of the Middle Ages, as well as of George Washington, Thomas Jefferson, Patrick Henry, and the Pilgrims.
Edward’s work affected products across the board, from hairnets to automobiles to cigarettes to even people. Politicians called on his services to help them move their campaigns forward. His approach was always similar: make people want to consume the product as it was presented or how it could be manufactured.
Edward primarily used the printed word to persuade individuals that they needed to buy a product. The advertisements were directive: they told the consumer what to buy.
“Isn’t it time you gave
yourself
a Christmas Gift?” (advertisement for a Colt revolver)
“Christmas morning she will be happier with a Hoover” (advertisement for Hoover vacuum)
“How Television Benefits Your Children”; “Own a Motorola and You
Know
You Own the Best” (advertisement for Motorola television set as a advertorial)
“For a better start in life, start cola early” (advertisement for the Soda Pop Board of America)
And the approach was very effective: companies did succeed in getting individuals to buy what the company could manufacture.
Edward Bernays and his cohorts’ efforts received support from an invention whose advancement was just as important as mass production at the time: the rise of mass media.
Before the early 1900s, most people got their news and information via word of mouth. They heard about things when they visited the town square or from a sparsely distributed network of newspapers when they were out and about buying the things they needed. Technology to send messages cheaply wide and far didn’t exist.
But the introduction of new disruptive technology in the early 1900s—such as the telephone, radio, movies, and television—greatly enhanced people’s ability to send information, entertainment, and news directly into the household from a central location. Those who were able to afford to do this had a set number of channels, and these discrete channels allowed them to closely control what was said and how it was said.
However, not everyone had this luxury. Only large players with deep pockets could fund the entertainment and information to distribute across these channels. As a result, channel owners needed the advertiser to help support their endeavors. A symbiotic relationship developed—a long-standing institution of which we’ve begun to see fractures only recently.
The kind of control and distribution power that mass media held was perfect for sending the advertisers’ messages intended to drive consumer demand for a given product or service.
The country that came out of World War II was one composed of citizens who were accustomed to skimping by to support the war effort. Once the war was over, people had the money to spend on things they wanted—and the freedom to do so. The economic and societal environment of that time helped move the consumerism trend forward. Creating consumer demand continued to evolve in a way that further bolstered the burgeoning industry of public relations and advertising and reinforced the belief that advertisers were in charge. The consumer was a pawn, willing to purchase what was created as long as it was positioned with the right spin.
The government helped, too. To encourage spending, the government began doling out cheap money via the GI Bill to anyone that wanted a house. Suddenly, the American dream was within most people’s grasp. Cities and towns everywhere began building affordable housing. Transportation systems were constructed to and from the city that made it easy for families to move out to the suburbs.
This was a society where people lived near others “like them”; in this way, neighborhoods truly did represent the groups in which they decided to live. Block parties were common, kids played with their neighborhood friends, and the influences of social hierarchy impacted which products and services people chose to buy.
The avenues through which these consumers received information were very closely controlled. In those days, you couldn’t skip through commercials, you had very few channels, there was no Internet, and you spent substantial time with your neighbors. It was easy in this type of situation (which lasted well into the 1990s) to create an environment that made people feel as though they had to “keep up with the Joneses”—in other words, buy the things their neighbors were buying. It was practical for companies to view this society through a wide lens of demographics and segmentation—and to use these divisions to appeal to the various audiences.
Based on social pecking order, work’s structure and rhythm, and a desire to fit in, the next big thing depended largely on placement and whether the right group or person liked it enough to make it sell. Use the right promotion, change a tagline, increase or decrease the price, and you could watch the numbers of units sold go up or down almost instantly.
Unlike today, another important difference back then was that people were mostly buying tangible items. They were products, and you had to visit the store to purchase them—an undertaking that required quite a bit of effort and commitment. Consumers needed to understand the features and functions of the item they were buying to ensure they were selecting the right product for them.
This meant that consumers were influenced by what they saw others doing, reading, or using. It required no effort to find out what books your friends or colleagues thought were interesting because you could see them carrying the books around. You could tell what music they were listening to because the record sleeves were mobile advertisements for the artists they contained.
Consumers didn’t have many resources of information available to understand the difference between products, and what they did have was scarce, was hard to obtain, and often came with an associated cost either in terms of time or money. They relied heavily on feature and function comparison to determine which product or offering was most appropriate to them. The commitment to making a purchase was therefore far greater—and the consequences of making a “choice” all the more critical.
As a result, consumers were forced to rely heavily on what they saw in mass media—and what the store’s friendly salesperson told them about any distinctions between available products. It was a marketer’s job to get consumers to the store and the salesperson’s task to establish a relationship with them. The retailer garnered the consumers’ trust and advised them in selecting the right choice based on their needs.
