The Landscape Model

Mapping, understanding and improving pre-transaction support. Why? To make online buying easier.

ScanYours offers an online tool to scan, interpret and compare websites on the consumer market. Our scans are based on the scientific results from a specific online marketing model: the Landscape Model. This model combines the online pre-transaction process with sixteen purchase-related factors, showing what is required to support consumers in their online purchase process. Because insufficient pre-transaction support may lead to less paying customers. Giving adequate support to all sixteen factors involved means more customers will finish the pre-transaction process.

This assumed relationship is corroborated by scientific research. Countless empirical results demonstrate that pre-transaction support is essential for the conversion rate, the number of items sold per hundred website visitors. The Landscape Model: how does it work?
 

Introduction: the basis
The Landscape Model was introduced in July 1999 by Tibert Verhagen in a publication called ‘Towards an internet-generation pre-transaction model’ in the VU Research Memoranda Series. The model is based on earlier research by Champy (1996), Ives and Learmonth (1984), and Creemers (1997). It describes the support of the online pre-transaction process. 

The pre-transaction process is the process any customer will go through before an actual purchase is made. It starts with the recognition of the need to acquire a product or service and it ends just before the definitive agreement (concluding the transaction). This process is also referred to as the ex ante process, the full purchasing process or the full buying process.
 

The pre-transaction process consists of the following stages:

• - Recognition of the need: the consumer feels the need to buy a product (or service).
• - Search for information: the consumer will look for adequate information to support the decision to buy.
• - Evaluation: the consumer evaluates both the product and the information on the product.
• - Decisional stage: the consumer decides whether the product will be bought, what exactly will be bought and when, and how the product will be paid for.

This is a complex process! During the pre-transaction stages the consumer embarks on a number of overlapping activities. Take, for instance, the looking for price information or security conditions. This will coincide with a comparison of various product variants or a search for additional products or services. Consumers will do this because this is the first requirement for the right decision to buy. If the pre-transaction requirements are supported insufficiently, the basis for a decision will probably be too weak. The result: the consumer will break off the pre-transaction process too early. There will be no definitive transaction.

If we apply this to online buying, it becomes clear that it is important to identify the online pre-transaction requirements. Based on the scientific literature on marketing and eCommerce we distinguish sixteen factors that support the pre-transaction:

1. Information – the consumer needs relevant information about the product, the supplier and the security conditions in order to make a choice. 
2. Interaction – the consumer wants to be able to communicate with the supplier.
3. Network – the consumer wants information about the product, meaning that he wants to be able to contact other consumers who bought the product or are planning to do so.
4. Experience – before making a decision the consumer wants to see, hear, smell and touch the product.
5. Ubiquity – the consumer wants to be able to choose where, when and how he or she receives the product.
6. Aggregation – the consumer wants the supplier to provide a number of required goods, services and information.
7. Personalisation – the consumer wants the supplier to adapt the product to his or her specific needs.
8. Quote – the consumer wants the supplier to provide a clear quote for the product.
9. Selection – the consumer wants to have a deep and broad product range.
10. Comparison – the consumer wants to be able to compare the various products/services of one or more suppliers.
11. Adaptation – the consumer wants to be able to adapt the pre-transaction process to his or her specific needs.
12. Facilitation – the consumer wants product-supporting facilities like a shopping cart.
13. Advice – the consumer wants the supplier to be active in the pre-transaction process by giving advice.
14. Bargaining – the consumer wants to be able to bargain about the product.
15. Decision – the consumer wants the possibility to evaluate when taking a definitive decision to buy.
16. Agreement – the consumer has decided to buy a product, making a clear conclusion of the information supply at the end of the transaction important

The Landscape Model
We now know what is so important about pre-transaction support. But the online buying behaviour is very complex. If we show the support of the online pre-transaction process as a model, things become more simple. At the same time we are creating a guideline for understanding and influencing online buying behaviour. By using the Landscape Model.

The Landscape Model views the online pre-transaction process as a structure of factors that support this process. This is a flexible model, offering the possibility to describe the online pre-transaction process for purchases that differ in complexity. We will first illustrate the main pillar of the model using the simplest online pre-transaction processes. We will then discuss the pre-transaction processes of more complex purchases.

The online pre-transaction process in its simplest form
In the online pre-transaction process the intensity and complexity are determined by aspects like customer characteristics, experiences and complexity of the product. In its simplest form, e.g. with usual or repeated purchases, the online pre-transaction process is very limited in scope. In this situation we only have to support the basic needs. In the Landscape Model this looks thus:
 

figure 1: The central path inside the Landscape Model

This structure forms the heart of the model. It is a relatively simple online pre-transaction process. This sequence is the central path inside the model. We may compare it to the general pre-transaction process as described in the literature. All online pre-transaction processes require support for these factors. In fact, the central path may be seen as the shortest and simplest way to do business.

More complex online pre-transaction processes
If the pre-transaction processes become more complex, e.g. a first purchase of the buying of a complex product or service, the four factors mentioned above will not be enough to meet all pre-transaction requirements. Customers may want to see or hear the product (sensory experience), change the currency (adaptation) or communicate with other customers (networking). These and nine other pre-transaction requirements are listed in the outer circle of the model below (with the exception of ‘decision’):
 

figure 2: The Landscape Model

Just like with the usual or repeated purchase customers will enter the pre-transaction process through a square consisting of information and interaction. The next stage is the flexible use of other pre-transaction factors. The question which supporting factors will actually be used mainly depends on the activated pre-transaction requirements. Following this, the consumer will enter the decisional stage. If the result is positive the customer will conclude an agreement, leading to the definitive online transaction.

figure 3: The Landscape Model for more complex online transactions

Still, the online pre-transaction process does not always follow the stages described above. The empirical results show that only a small percentage of website visits ends with a customer buying a product or service. Research based on the method of the Landscape Model demonstrates that there is a positive link between this percentage and the support of the pre-transaction process. An adequately supported online pre-transaction process will satisfy most of the pre-transaction requirements. Fulfilling these requirements is an important condition for a definitive purchase. Unfulfilled pre-transaction requirements – e.g. insufficient information, little choice, few possibilities for interaction, no possibilities for comparison – may discourage people from buying. In that case, this is where the pre-transaction process stops, because other suppliers will be easy to find. That is why support of the online pre-transaction process is essential.

Some remarks

Up to this point we have only described the basis of the Landscape Model. But before we reach some of the methodological aspects there are some remarks to be made.

The model describes a website as a landscape of purchase-supporting factors. However, there is little to nothing to keep customers from visiting other websites, meaning that the landscape of purchase-supporting factors probably consists of much more than a website. In order to limit the chance that a customer will visit another website, the website will have to offer optimal support of most pre-transaction factors.

The Landscape Model represents the online pre-transaction process. This consists of sixteen factors that were developed to encourage online buying. These factors are also called functions or functionalities. To optimise the pre-transaction process we also have to meet two other requirements. First, all factors have to be available all the time. Bad availability – pages that aren’t loaded, server error and bad links – influence the number of completed transactions in a negative way, simply because functionalities are not available to the customer. Second, we have to look at usability. Usability means the pre-transaction process has to be clear and easy to go through. If we apply this to our model, we arrive at the design of the online landscape, containing e.g. website structure, navigation, layout and graphs. Both dimensions are important for a successful pre-transaction process.

Methodology
Compared to offline buying the online pre-transaction process is an open process. Instead of interaction with actual sellers to fulfil the pre-transaction requirements, websites can turn this into a supporting process at any time of the day and at any location.

Our methodology was mainly developed to determine these website characteristics. A checklist of 155 items gives an insight into the degree in which a website contains the characteristics that support the sixteen pre-transaction factors. A percentage of the maximum score for each factor and the website as a whole is used as measure. A 33% score for ‘information’, for instance, means that only one-third of the possible support is in place. By placing the focus on ‘feature presence’ we will obtain reasonably objective results. 
 

Implications at company level
One of the most interesting aspects of this research is the proven relationship between pre-transaction support and the conversion rate. This implies that a scan based on the ScanYours checklist can be used as a starting point for turning more hits into sales. The possibilities offered to companies are:

• - Scanning websites to analyse the pre-transaction process
• - Using the scan to implement improvements
• - Making various comparisons, e.g. of the own website versus the competition, of one site against an earlier scan of the same site or of a site versus the average in a specific sector (see figure below):

figure 4: The online pre-transaction support by the Bank of Montreal (blue) set off against the average in the sector (orange)

• - Viewing and interpreting the differences in support in various sectors (selling mortgages online calls for a different approach and support than buying books online).
• - Viewing and interpreting the differences in support in various countries or regions: are the United States still in the lead? What are the main differences and what do they mean for the future in Europe?
• - Analysis of changes in the course of time.