16 Minute Read

The decision-making process of a customer can be fairly complex, but it is vital for effective marketing. Once you understand why and how a customer makes a purchase, you can take your sales and engagement to the next level. We explain it step by step in this blog.

consumer decision-making process

When you think about sales, you might believe that the most important part of the business is the moment when the customer gives you money in exchange for goods or services. But, convincing potential customers that you will provide them with real value is more important than simply taking their money. From the initial sales pitch to providing after-sales services to the customer, each step of the consumer decision-making process plays an important role in determining whether you will land the sale and get repeat business from that customer.
When someone spends money on something, they haven’t made that decision out of the blue. There is instead a combination of external and internal factors that drive them to buy it. The buying behaviour of someone is determined by a number of factors, ranging from overt advertising to subtle suggestions to get the customer to choose your product. A lot of businesses make the mistake of focusing on improving individual aspects of the sales process, such as using SEO optimisation to attract customers to their website or improving checkout procedures, while ignoring the bigger picture. All aspects are important and need to be worked on as a whole to enhance the customer’s decision-making journey and influence it in your favour.

Stages of the Consumer Decision-Making Process

The consumer decision-making process refers to the mental workings of the customer leading up to a purchase choice.

The consumer decision-making process refers to the mental workings of the customer leading up to a purchase choice. The main stages of this process are:

  1. Need Recognition (becoming aware of something the customer needs). This is the first and most important stage of the buying process that can end in a purchase from your business.
  2. Information Search. This is when the customer finds out what options are available to them as means of fulfilling their needs.
  3. Evaluation of Alternatives (comparison). In this stage, the customer compares the options available to them to determine the best option in the end.
  4. Purchase (conversion). This is the stage where the customer has reached a final decision and makes a purchase.
  5. Post-Purchase Behaviour. After buying something, the customer evaluates whether they got their money’s worth. If the customer is satisfied with what they purchased, they are more likely to buy from the same retailer in the future and recommend the product/service to other people.

Understanding all the steps of this process is vitally important for any business, and e-commerce businesses have the benefit of having a platform where they can optimise this process to attract new customers and retain current customers. Brick and mortar storefronts can only collect so much customer data, which is dependent on the physical interaction with the customer inside the store. In contrast, online retailers can find or generate significantly more customer data to use in implementing conversion strategies for each stage of the consumer decision-making process. We believe these stages are worth discussing in detail:

1. Need Recognition

Customer needs can be boiled down to real or perceived emotional and physiological needs.

This initial stage in customer decision making occurs when a customer first becomes aware that they have a need that isn’t being fulfilled. There are two reasons for a need to arise:

Internal stimuli – This includes emotional or physiological needs such as thirst, hunger, being tired or cranky, etc.

External stimuli – Commonplace examples of this are advertisements or emotional associations to objects stored in the customer’s memory.

The root cause of a need can be a variety of things, but at their most basic level, customer needs can be boiled down to real or perceived emotional and physiological needs. For example, someone who wants to appear attractive to other people will need clothes and accessories that can help them look their best. This is an example of a social stimulus causing a need for attractive clothing. A need can also be driven by functional desires, such as needing food to satisfy hunger or warm clothing to stay protected from cold weather. Other examples of functional needs can include the need for a car to be able to get to work, or needing a laptop to work from home, etc. At their core, all needs are caused by internal or external stimuli.

2. Information Search

After a customer has identified a need, their next step is to look for a way to fulfil that need. This is the stage where you can start leveraging the enormous potential of being an online business. For the majority of customers today, their first stop for finding solutions to problems is to Google it. It is vital that your online store should be visible to the customer, and the best way to ensure that is to get a high ranking in Google searches for the products and services that you are selling.

As an online business, you will need to have a well-optimized online storefront to rank high for the keywords related to your brand. You can turn interested people into customers by optimising your website for SEO and being the first thing people see when they search for keywords related to your business. Your older customers can be of help writing reviews that you can publish on your site. This will help to attract interested customers and your brand will make an impression on visitors. The reviews from your old customers will help your SEO efforts by providing keyword-rich content that is relevant to your business. You can leverage the full potential of reviews by integrating them with your product listings and by using Google Rich Snippets.

3. Evaluation of Alternatives

After the customer has completed their search for information, the next stage is the evaluation and comparison of different options in order to find the most promising alternative. In this stage of the consumer decision-making process, the potential customer is aware of your brand and visits your website to help decide whether to buy from you or from someone else. A customer’s decision will depend on the availability of options that best suit their needs and whether the purchase will be worth the money. Two key factors influence the evaluation of alternatives:

Subjective: This includes the feelings a customer has about your brand. These feelings are influenced by past experience with the brand and by reading reviews from other customers.

Objective: This includes attributes such as functionality, price, ease of use, and product or service features.

Good reviews and testimonials from past customers can increase customer trust and engagement, helping convert more leads into sales.

Good reviews and testimonials from past customers can increase customer trust and engagement, helping convert more leads into sales. Putting user reviews on your homepage is a good idea as it will make sure that they get seen as soon as potential customers visit your website. The other place to put user reviews is on your product pages. It is recommended that you use a home page carousel for the reviews to reduce the bounce rate and increase visitors’ time on your website. This increase in engagement will get the customer to learn more about your business and leave with a positive impression of your brand.

Along with user reviews, another powerful example of user-generated content is community questions and answers. They help in showcasing your brand as receptive to questions and queries about your products.

4. Purchase

The process of making a purchase from your website should be as easy as possible.

As the name implies, this is the stage in which the customer has decided where they want to buy from and are ready to make the purchase. You might be thinking that if someone has come this far in the consumer decision-making process, a sale is guaranteed. But, it is still possible to lose a customer at this stage. The most important element in this stage is ensuring a good purchasing experience for the customer. The process of making a purchase from your website should be as easy as possible. You can optimise for it by displaying reviews on the checkout page, but make sure that they do not distract the customer from completing the purchase.

5. Post-Purchase Behaviour

In this stage, customers decide whether the purchase was worth it. This stage will determine if they decide to return to you for future purchases and if they recommend your brand to others. To increase the chances of returning customers and referrals, you need to have a post-purchase strategy that encourages future engagement. Return customers make up a significant fraction of a store’s total revenue, so make sure that you have a good strategy for the post-purchase stage.

You can encourage further engagement from a customer by requesting them to leave a review. It will help you better understand your performance while providing valuable user-generated content that can help attract more customers. You should also consider setting up a loyalty program that rewards customers for their continued business with your brand. Customers who are part of a loyalty program offer a higher lifetime value than customers who are not.

What are the types of Customer Decisions?

types of consumer buying decisions

Learning what the customer wants and influencing their decision-making process is at the very core of marketing. Behind every purchase decision, there are numerous thought processes, all of which combine to affect purchasing decisions. For example, a customer can spend very little time thinking before making an impulse buy, or they might take time to do their due diligence and make a well-researched purchase. Because of the gap between these two extremes, it helps to categorize the types of processes that lead to making a decision. 

Nominal Decision-Making

Nominal decisions are those that involve low-cost products and can include recurring purchases of a familiar product or brand. These products do not require a lot of research or involvement on the part of the customer. An example of these kinds of products is kitchen or laundry items. If you have been using the same brand of shoe polish for the last decade, you will not think very hard when you decide to buy it in the future.

Nominal decision-making does not have to always start off as such. You might have started with a lot of research into finding just the right shoe polish for your needs and budget before you decided on what to buy. Over time, however, the purchase decision becomes nominal because of the familiarity and loyalty to the brand. 

Limited Decision-Making

Limited decisions are those that require more involvement on the part of the customer. It is the primary type of customer decision making when it concerns products that are mid-range in price or are purchased semi-frequently. When a customer makes a limited decision, they take some time to evaluate the options available to them, but they are less likely to make their decision based on reviews and testimonials alone. Instead, they rely on their own memory of that product and make the next purchase according to their own reasoning.

For limited decision making, marketers and businesses need to examine all the data they have on their customers to help them understand the factors that influence customer decisions. These factors include the quality of the product, the accessibility of the product, the price and other attributes that affect customers.

Extended Decision-Making

High-cost purchases come with increased risk for the customer, which motivates them to thoroughly evaluate their decision.

These are decisions that involve products that are high-cost and not very frequently purchased. As a result, the customer is more involved in gathering information about the product and they can be unfamiliar with the brand and its products. Examples of this kind of decision making include expensive items such as flat-screen televisions, cars, laptops, smartphones, etc. Because of the price of these kinds of products, and because people don’t buy them on a regular basis, the customer tries to ensure that they are making the right purchase decision.

High-cost purchases come with increased risk for the customer, which motivates them to thoroughly evaluate their decision. The customer will base their final purchasing decision after consulting friends and family on available options, and reading customer reviews and testimonials.

For this type of decision making, the ideal thing for any business is to build a positive online presence where people can share their opinions about your products.

What Influences Customer Decisions?

What Influences Customer Decisions

Understanding the nuances of the factors that go into influencing a customer’s behaviour helps anticipate the conscious and subconscious needs of the customers. If you know what factors can lead someone to become interested in your product, you can tailor your marketing strategy accordingly.

As an example, one of the visitors to your website might be interested in buying a Rolex watch, while the next visitor may be interested in buying a cheaper but functional electronic wristwatch. Understanding what reasons drive the choices of these customers is needed if you want to succeed in swaying their individual customer behaviour. This will help you determine who you should target your marketing at and convert both visitors into sales by meeting their needs. Let’s talk about some common factors that influence customer behaviour.

Product Reviews

We pointed this out earlier, but we will further elaborate on it here. Many recent studies have confirmed that customer reviews play an important role in the final decision of a customer. One study revealed that over 88% of people trust online reviews as much as they trust personal recommendations from people they know. 

The more positive Reviews you get, the more they will drown out any few negative Reviews as well. But, make sure that negative Reviews are not entirely hidden. A few negative reviews can actually suggest transparency on your part and benefit your sales. If all you have are positive reviews, it can make potential customers wary of what you’re offering and keep them from making a purchase.

Peer Recommendations

Customers make their purchasing decisions using a mixture of the internet, older forms of media and talking with friends and family.

Although social media and the internet are used by the majority of people, there is still value in focusing on the real world to influence customers’ decisions. Customers make their purchasing decisions using a mixture of the internet, older forms of media and talking with friends and family. According to one study, over 59% of people consult their friends and family before making a purchase.

Social Opinions & Trends

Humans are social animals that have an innate desire to belong to a group. This explains why the psychology concept of social proof works so well for marketers and why people follow popular trends. Whether a purchase is cheap or expensive, people get influenced by those products based on the opinions of their friends and family. The cultural practices and trends of a region also influence the way people consume certain items, and you will need to curate your strategy to align with them. 

The Complexity of the Product

There is a concept in psychology called cognitive fluency. It relates to the human tendency to prefer things that are simple and easy to understand. This is why marketers need to make their products and services easy to understand. Even if the product itself is complicated, the customer should be able to get the gist of it through a brief overview. If most customers become confused by what you are selling, they are less likely to buy it.

Personal Tastes

The purchasing decision of a customer has a lot to do with individual tastes and preferences.

The purchasing decision of a customer has a lot to do with individual tastes and preferences. Personal factors such as lifestyle choice, beliefs and aesthetic sensibilities tend to influence what a customer likes. There isn’t much you can do to change the personal taste, but you can use targeted advertising and branding to reach customers with compatible tastes.

If you draw upon all the information provided in this blog, you are sure to succeed in your marketing outreach. It can be a bit daunting at the start, but we have you covered at Apex Pro Media (APM). We stand ready to uplift your brand profile and get you the audience that you deserve. So make your Customer’s Purchase Journey more effective with APM, today.

Summary:

  • The ‘consumer decision-making process is the collection of processes that a customer’s mind goes through before, during and after they make a purchase decision. It comprises the following stages:
    • Need recognition
    • Information search
    • Evaluation of alternatives
    • Purchase
    • Post-Purchase behaviour
  • The types of customer Decision-Making can be broken down into:
    • Nominal decision-making – In which the cost of the product/service is low and it is a recurring purchase. This type of purchase requires little to no research beforehand.
    • Limited decision-making – For mid-range prices and semi-frequent purchases. In this type of purchase, some time is taken to evaluate and research the options available.
    • Extended Decision-making – For high-cost and infrequent purchases. The customer does extensive research before making a purchase decision.
  • Customer’s purchase decisions are influenced by the following factors:
    • Product reviews
    • Peer recommendations
    • Social media
    • The complexity of the product and its marketing
    • The personal tastes of the customer
100% LikesVS
0% Dislikes

Leave a Reply

Your email address will not be published.

CONTACT

ARE YOU READY TO BE AT YOUR APEX?

CONTACT

ARE YOU READY TO BE AT YOUR APEX?