Yahoo Local-Vertical Study: Internet And Search Heavily Used By Consumers In Research And Decision-Making

Yahoo, perhaps more than any other entity online, has been a tireless producer of consumer and advertiser research. The efforts have broadly been intended to communicate how important the Internet is in consumer purchase behavior and decision making. Last week I was given new findings from a set of Yahoo research studies, conducted earlier this year among 2,500 consumers.

The surveys and interviews examined consumer behavior in choosing local services and providers in five vertical categories: legal, real estate, home improvement, health care and vocational education. In all cases the consumer-respondents had actually completed a transaction.

While the internet and search engines were a critical part of the consumer research and decision-making process in all five categories, consumer behavior and emphasis on resources varied by category somewhat:

• Vocational Education – 67 percent of respondents used a major search engine compared to 41 percent who used local search
• Healthcare – 53 percent used insurance provider directories while 44 percent relied on a search engine
• Real Estate – 51 percent used a real estate vertical search engine versus 44 percent who used a major search engine
• Legal – 36 percent of respondents referred to a search engine while 25 percent used the internet yellow pages
• Home Contracting – 36 percent used a search engine while 26 percent used the internet yellow pages

Consistent across categories was word of mouth. Yahoo found in every category that 75 percent of consumers relied on recommendations from friends and family during the research process. This also translated into interest in online reviews: “Yahoo’s study found that local merchants who encourage customers to post online reviews and ratings benefit from the same kind of impact seen through word-of-mouth endorsements from family and friends.”

Here’s a high-level breakdown of some of the specific findings by vertical:

Legal services:

In this category, 62 percent of consumers surveyed used the internet in their attorney research. They typically spent eight hours doing research online and made their decision within a week on average. Apparently equal numbers used search engines and the traditional yellow pages (36 percent). According to Yahoo the top query patterns that consumers used in searching for legal help were the following:

• Type of attorney or attorney sought — 85 percent
• City and/or zip code  — 57 percent
• General category keywords — 37 percent
• Specific business name — 23 percent

Real estate:

In looking at how buyers and sellers select realtors, Yahoo again found heavy reliance on word of mouth. But then 77 percent of consumers conducted follow-up research online to verify the agent was a good fit for their needs. Yahoo also found that consumers selected agents in a process that was “intense and quick.”

According to the study, “consumers spend an average of 12 hours online researching agents and 75 percent selected an agent within one week of starting their search. The selection of an agent is usually confirmed with an in-person meeting: 85 percent said that their final decision was influenced mainly by their in-person interactions with the agent.”

Agent websites were also found to be critical to the perception of credibility and search was found to be a big driver of traffic to agent sites.

Home improvement:

Here Yahoo found that 59 percent of homeowners used the internet to do research on contractors for home improvement purposes. In terms of the categories of search queries used in this context, they were as follows:

• Type of service needed — 77 percent
• City and zip code – 56 percent
• Specific business name – 39 percent
• General, like “home services  or contractor”  — 32 percent

Here too contractor websites were very important in the consumer decision-making process. According to the Yahoo findings “63 percent of homeowners reached a contractor’s website through a search engine and 63 percent of homeowners who visited a personal contractor website ended up choosing a contractor that had a site.”

Here were the items and features that consumers clicked on when on contractor sites:

• Photos/visuals — 87 percent
• Contact information — 83 percent
• Learn more about their services –80 percent
• Read reviews and testimonials — 67 percent
• Look for special deals or promotions — 63 percent
• Get approximate costs — 23 percent
• Schedule an appointment — 17 percent

Healthcare:

In looking for a doctor (in an elective context) 84 percent of those surveyed by Yahoo used the internet in their research. This was the second highest online research percentage among the categories examined. In addition, 71 percent of consumers who visited a physician with a website ended up choosing a doctor that had a site. In getting to those sites, 50 percent of consumers used a search engine.

Vocational education:

In the category of users looking for vocational eduction, 92 percent used the internet before enrolling in a program. Prospective students spent roughly 17 hours doing research online and made their decisions within a period of two months. Here again word-of-mouth was very important as one of many sources of information.

Here were the query types used by prospective students in conducting searches:

• Type of program interested in — 73 percent
• Specific school name  — 43 percent
• General category keywords, such as career colleges or financial aid — 43 percent
• City and/or zip code  — 30 percent

What does all this mean?

Generally speaking consumers are using a range of online and offline resources to do research before making purchase decisions or choosing service providers. From a marketing perspective, the world is a great deal more complex than it used to be. And while traditional “word of mouth” remains powerful and influential, the internet is heavily used in the research process; so is search, in a majority of cases. In addition, websites are often a very influential factor in the ultimate choice of local contractor or service provider.

The practical message for local businesses and service providers is this: have a professional website and make sure that it’s properly indexed and can be found by consumers using search engines.