The consumer decision-making process is a process that the customers follow while making their purchase decisions as per their needs. It refers to a consumer’s behavior before and after making a purchase.
It is also known by other names such as buyer’s journey, buying cycle, marketing funnel, sales funnel, etc. It details a consumer’s journey of identifying their needs and fulfilling them through research and optimal purchasing.
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What is Consumer Decision Making Process?
Definition: The consumer decision-making process is the behavioral patterns of a customer while identifying his or her needs, searching for relevant information, analyzing alternatives, making a buying decision, and doing the post-purchase evaluation.
Most consumers today won’t just buy a product on a whim. There is a detailed framework behind their decision process. This framework is considered as a customer journey by businesses that want to analyze consumer behavior before promoting their product, service, or brand.
John Dewey, an American educator, has underlined 5 stages consumers go through during their purchase decision-making process:
1. Need Recognition – involves the realization of needing a product or service.
2. Information Search – deals with searching about different product options.
3. Alternative Evaluation – consumers compare different products in this stage.
4. Purchase Decision- is concerned with confirmation of purchase.
5. Post-Purchase Behavior – is the process in which customers consider the value of the product.
In the competitive business arena, having a stellar product isn’t enough. Companies or brands need to supervise every stage of the consumer decision-making process to optimize conversions and sales of their company. Let us now delve into those 5 stages right away-
5 Stages of the Consumer Decisions Making Process
Here’s an in-depth analysis of each step in the Consumer Decision Making Process:
Need Recognition Stage 1 (Awareness)
The first stage of the consumer decision-making process is needed recognition. In this stage, a customer becomes aware of an imbalance between his present state and desired state. What results is the need for a product or service to bridge that gap?
Without sensing a need, customers won’t make a purchase. For example, a hungry person might consider ordering food online, given that he’s too busy to drive.
Several factors can engender the need for recognition such as-
a. Internal Stimuli
Emotional and physiological needs such as distress, fear, jealousy, hunger, thirst, cold, or sleepiness might trigger a purchase.
b. External Stimuli
Newspaper ads or marketing campaigns online can attract the customer into buying your products. Word-of-mouth promotions can also influence the consumer decision-making process.
Marketers must put themselves in the shoes of consumers. They must try to tailor their campaigning towards how a product satisfies a need or solves a problem.
At this stage, businesses must focus on building brand awareness. Without knowing about the brand, consumers will be unable to connect their needs with the product. To get consumer’s attention, they can:
- Improve the noticeability of the brand by increasing organic search results.
- Maintain an active social media presence.
- Encourage customers to leave reviews about the product.
Abraham Harold Maslow, who is one of the most popular American psychologists created Maslow’s hierarchy of needs (a theory of self-actualization) that helps in understanding the need or problem recognition that can influence our personal decision-making processes. The hierarchy of needs revolves around the following human needs-
- Basic needs or Physiological needs
- Safety Needs: Security, Order, and Stability
- Love and Belonging
- Esteem level
- Self Actualization
Information Search Stage 2 (Research)
The next step in the Consumer Decision Making process is searching for information. At this stage, the need for a product is cemented. So, consumers will try to gauge as much information as they can to find the right product.
Their primary motivation is risk management. People don’t want to make the wrong choice and invest poorly. So they seek resources. They will consult many sources such as:
a. Family and Friends
Many buying decisions stem from suggestions from people who have already used a particular product.
b. Product Reviews
Would-be buyers would refer to comments on company websites or watch YouTube videos to know more about the product.
c. Blog Articles
Blog articles often give an in-depth analysis of products and are just a click away from viewing. They make an accessible information source for web users.
d. Marketing Copy
It is created by the company to introduce its products and their benefits. They are more persuasive and serve to educate the target customers.
For example, imagine a user XYZ has discovered that a tap was leaking in his apartment. He will either search online for good plumbers in his hometown or ask his family or friends for suggestions.
Most online shoppers spend a lot of time on the web researching for products compared to traditional shoppers. You are seeing a positive comment on a product that can attract consumers to your brand.
For targeting customers at this stage, companies should concentrate on increasing their brand visibility. Using SEO-friendly content can help your company pop up in search results.
You need to provide sufficient information so that the consumers leave your website with valuable insights. Try to brand your company as a reliable source of information rather than just appearing as a money-grubbing entity.
For example, if you own a nutritional supplements company, you can publish informative articles on health and lifestyle or even about ingredients in your product. This strategy will give your brand credibility.
Evaluation of Alternatives Stage 3 (Consideration)
After reviewing a product, customers might still be hesitant to make a purchase. Given the sheer volume of options, people are more likely to analyze them.
So, they will move on to different products before making the right pick. This stage of the Customer Decision-Making process entails the comparison of other product features.
For example, a customer XYZ might consider buying a Smartphone from Company A over Company B’s because of their lower prices. However, upon discovering that Company A’s products had a couple of bad reviews, she might change her mind.
There are a few considerations universally applicable to all products while thinking for different alternatives to move ahead on the consumer decision-making process-
- Uses: Which product meets consumers’ needs most efficiently? How many benefits does it have?
- Price: Which product has the least cost?
- Reviews: Are the reviews about the product good or bad?
- Materials: Is the product made of high-quality materials?
- Look and Feel: Are its design and color appealing?
- Availability: Is the product in stock?
- Shipping: How long will the shipment take to reach? What is the cost of shipping?
People tend to evaluate a product on multiple levels before making a choice. The marketer should seek to establish their product as the best solution. The objective of the marketer is to make a product stand out. If a product shares all its features with another one, the scale won’t likely happen.
Make sure that you encourage customers to leave a review of your product. Customers trust each other more than businesses. Studies will enhance trust in your brand’s image.
Purchase Decision Stage 4 (Conversion)
At this stage, a person confirms his or her purchase after analyzing the different product alternatives. This process is also known as conversion.
Conversion can be induced by subjective factors (e.g., memories associated with a brand) or objective factors (e.g., Google reviews). The purchase decision isn’t the end of the consumer decision-making process, though.
People can still drop out of buying the product at the last minute. This is known as the cart abandonment rate. This phenomenon can be triggered by unanticipated situations like losing one’s job or inconvenient modes of buying.
For example, a customer ABC was settled on buying a computer from XYZ brand for her new job. Before she clicked the ‘buy’ option, she realized that the shipment would take much longer to reach her. So she decides to go for another company.
There are a couple of strategies companies can use to reduce cart abandonment rates at this stage 4 of conversion-
Companies need to be as transparent as they can. They need to provide sufficient pricing information. If a company doesn’t consider shipment costs with the product’s price, customers might be dissuaded from purchasing due to extra charges.
b. Sales Optimization:
The sales process must be optimized, that is, made easier as possible. If buying online is a troublesome task, people would be discouraged from making the purchase.
c. Google Analytics:
Using Google Analytics can help you track your website traffic and understand what customers are looking for.
d. Checkout Offers:
Giving offers at the checkout counter, such as double sales offers, will make customers remember the gesture and, by extension, your brand.
Post-Purchase Evaluation Stage 5 (Re-purchase)
Post-purchase behavior is the final stage in the Customer Decision-Making Process. It is concerned with the aftermath of the consumer’s decision to make a purchase. In this stage, consumers will decide the value of the product.
They will try to determine whether the product was worth their money. If the product doesn’t meet their needs, they might leave a bad review for the product. In this case, you can offer them a refund and a free product, requesting to remove their review.
One thing to consider is alleviating buyer’s remorse. People might regret buying a product upon seeing other products offering better feature sets or similar products at affordable prices. You can alleviate their feelings of entrapment by offering them money-back guarantees.
It’s an important stage with the potential to transform customers into brand ambassadors or brand advocates of the product. The key is to maintain audience engagement after the sale. People love to feel special.
For example, ABC just purchased a TV from Samsung. He is happy with the TV. What can elevate his happiness is discount cards or coupons for future purchases. Sony can send him emails to exclusive offers, making him feel special. Now, Ray will go to the same company for future purchases. He will also recommend the company to all his friends and family.
On average, 1/3 of all business revenue is from loyal customers. By providing a high-quality product and establishing trust will bring in more long-lasting customers.
Businesses can increase their reach by accurately analyzing the customer decision-making process of their target audiences and tweaking their campaigns to ensure a personalized experience for the existing as well as potential customers.
Accordingly, companies can profit by augmenting brand awareness, alleviating consumer concerns, and engaging with them deeper. The key is to support every step of the buying journey for a favorable consumer decision.
How crucial do you consider the analysis of the consumer decision making process for optimizing the effectiveness of advertising and marketing campaigns?