The customer decision making process, influenced by the rise of communication technologies, now offers customers various options for interacting with suppliers, such as through social media platforms like Facebook and Twitter. This increased communication availability complicates purchase predictions. Unlike the linear process in the traditional market, customers in the digital market can communicate with service providers anytime, anywhere, making decision-making less predictable.
Marketers grapple with the challenge of influencing consumer buying behaviour, requiring a deep understanding of customer needs. In the digital age, consumers, armed with vast information, are more discerning and likely to fact-check advertising messages. Marketers must be cautious as false information can easily proliferate through social media and other sources.
To navigate this landscape, marketers can tailor strategies by gaining insights into consumer preferences through quantitative research. For instance, understanding that consumers view social media as a platform for expressing personalized views rather than making purchases can guide marketing efforts. The impact of the pandemic on consumer behaviour, influenced by societal, familial, and media changes, becomes valuable knowledge for marketers aiming to enhance their strategies in 2023.
In the words of Hawkins, Mothers Baugh & Best, “All marketing decisions are based on assumptions and knowledge of consumer behaviour,” emphasizing the critical role of understanding consumer behaviour in shaping effective marketing strategies.
What is the Customer Decision Making Process?
The decision-making process is what a customer goes through before, during, and after acquiring a product or service. It is also referred to as the customer’s buyer journey, the purchasing cycle, the buyer funnel, the consumer’s purchase choice process, or the buyer’s decision procedures. Whatever you call it, the vital thing to remember here is that the average client goes through five decision-making phases or steps in their purchase cycle. The decision-making process might be easy or complex depending on a consumer’s view of a specific product or service. I cannot easily compare it to assessing, selecting, and acquiring various items or services. The standard procedure consists of five parts. However, researchers and organizations frequently lengthen the purchase procedure. For example, Amazon, with its extensive product offerings, user reviews, and personalized recommendations, plays a significant role in influencing and facilitating the customer decision-making process by providing a user-friendly platform for informed choices.
5 steps of the Customer Decision Making Process
In the intricate web of the customer decision-making process, external influences such as social factors, cultural values, and personal experiences play a crucial role in shaping preferences and choices. Kotler states that recognition of need is the first step in customer decision-making. Recognition of problems is an essential need, such as climate, water, food, and shelter. It might also start with a step ahead of essentials. The business needs to realize and satisfy the demands of consumers. After recognizing the consumer necessity, a business will develop marketing campaigns. For example, a person is starving, so food is his wish. However, good food will please him. The company should then concentrate on satisfying the consumer’s needs. The next step is knowledge searching after this point. External or internal factors may cause the condition, but the consumer must be given a reason to believe they want or need something.
A survey took place by Mintel in January 2021 to understand the changes in shopping habits of UK consumers since the start of the coronavirus outbreak. The participants are 500 internet users aged 16+. It is observed that 50% of the participants spent more time purchasing online, whereas 48% of participants stopped visiting in-store. On the financial aspects, it is found that cost-cutting and electronic pay are the preferred choices. Participants are going to local stores to help friends and families.
At the inception of the decision-making process lies the seed of desire. Customers are often prompted by emotional needs, whether it’s the desire for status, the thrill of novelty, or the need for comfort. Successful businesses tap into these emotional triggers in their marketing strategies, creating a connection that goes beyond mere product features and specifications.
Search for information:
Market research is a critical tool for businesses, providing valuable insights into consumer preferences, market trends, and competitive landscapes. By conducting thorough market research, companies can make informed decisions, tailor their strategies, and stay ahead in the dynamic business environment. Marketers strive to comprehend the psychological intricacies of the customer decision-making process, recognizing the profound impact of emotions and perceptions on how individuals evaluate products or services before committing to a purchase. At this critical juncture, marketing campaigns wield significant influence, shaping consumer perceptions. According to Kotler, consumers draw information from diverse sources, including private channels like family, friends, and acquaintances, commercial sources such as advertising and salespeople, and public sources like mass media and social media. Notably, a Google report reveals a 40% increase in the use of “near-me” search terms in the UK, emphasizing the trend of people seeking services based on proximity. This presents a valuable opportunity for local businesses to leverage free multi-featured business listings, such as Google My Business and Bing Places, to enhance their visibility on Google Search and Google Maps.
During the informative search phase, consumers pinpoint a need or problem and then seek the optimal solution. Before settling on the best solution, consumers engage in an information hunt, choosing between internal and external search methods. Internal searches leverage memories and past experiences, enabling consumers to make decisions without external input. Alternatively, external searches involve seeking opinions from friends, and family, or relying on public sources like blogs and product reviews when lacking personal experience. The internet, particularly search engines like Google, has become the primary medium for obtaining product information.
The duration of each stage in the information search process varies, influenced by factors such as a consumer’s prior experience and interest level. Consumers unfamiliar with a product spend more time researching, and their level of interest correlates with the time invested in the information stage. Additionally, the perceived risk of making a wrong purchase decision impacts the time allocated to information research. For instance, products related to personal care may warrant more extensive research than less critical items like bags or shoes.
Evaluation of alternatives:
Evaluating alternatives is the third step in the customer decision-making process in purchasing. When a customer gathers a product or brand’s information, the consumer classifies it and assesses it in the next phase. For example, when customers want to purchase a vehicle, they want to gather knowledge from alternate car brands to evaluate. More than 400 % of UK audiences are using the “Best” Keyword to confirm their product details by asking questions, reading reviews, and comparing products before making a favourable purchase decision.
In this second stage, consumers assess different options and correctly classify the “Best” option. For example, a buyer who wants to buy a laptop first searches e-commerce websites and adds items in carts or in a favourite list that fulfils the criteria. Then, the options are assessed to pick the best one in any regard. However, User-generated Content positively affects product success, sales, and purchase intention. It helps in resolving contradictory conclusions integrated into customer purchase decisions.
The decision to buy:
It represents the fourth stage in the customer acquisition continuum. After gathering information from various sources, the buyer proceeds to assess and determine when to purchase before making the final decision. Consumers tend to choose the brand or product they perceive as the best during the assessment phase, driven by the belief that what they consider the best is indeed the optimal choice. This principle underscores the importance of not attempting to sell every product, as selling what the customer truly needs is more effective in retaining their loyalty. The buying process mirrors the information-gathering phase, with consumers evaluating their understanding of the product or service before deciding to make a purchase.
According to Google, over 100% of customers search for promo codes to make more informed purchase decisions. Shopify has responded to this trend by implementing a discount strategy, offering fixed value, percentage, or in-store discounts for items, sets, or variants. Discount codes provide precise price management and promotional controls, contributing to an increase in the Average Order Value (AOV) through incentives like “purchase X get Y” discounts. These codes can be limited by specifying valid dates, restricting usage frequency, setting minimum spending thresholds, and determining eligible items, collections, and variants.
In the context of discounted prices, buyers are often swayed to make a purchase decision, with less concern about the reduced price being lower than the commodity’s value. The allure of acquiring something at a discounted price is often sufficient to prompt a purchase, highlighting the psychological impact of perceived bargains on consumer behaviour.
Decisions after purchase:
The decision after purchase is the fifth and last phase of the customer decision-making process in purchasing. If the buyer orders a good, the enterprises should recognize the consumer’s behaviour or opinion of the goods. The consumer may be pleased or disappointed after the application of the substance. If the buyer is pleased, the same product’s retention odds are more significant, and the satisfied consumer will even persuade others to purchase the product. If the consumer is dissatisfied with the purchased goods, it is necessary to understand the reason for the negative response. The consumer can buy the merchandise in a store with high-quality standards but still purchase something of low quality. It is necessary to understand why consumers are unhappy with their purchases. It is also essential to understand the reason for the dissatisfaction and find a way to prevent such situations in the future. The primary thing is to prove that you appreciate the client. It needs only a brief “Thank you”, but these two terms will affect the after-sales experience of your customer and help create a longer-term relationship.
Emotional Intelligence in Marketing:
- Understanding Customer Emotions:
- Emotional intelligence in marketing involves recognizing and understanding the emotions of customers.
- It goes beyond demographic data, aiming to comprehend the feelings and motivations driving consumer behaviour.
- Tailoring Communication:
- Marketers with emotional intelligence can tailor their communication strategies to resonate with the emotional needs of their audience.
- This includes crafting messages that evoke specific emotions relevant to the product or service.
- Building Trust and Connection:
- Emotional intelligence enables marketers to build trust by empathizing with customer concerns and needs.
- Establishing a genuine connection fosters brand loyalty as customers feel understood and valued.
- Creating Memorable Experiences:
- Successful marketing with emotional intelligence focuses on creating memorable experiences for customers.
- Positive emotional experiences contribute to brand recall and influence long-term customer relationships.
- Anticipating Customer Needs:
- Emotional intelligence allows marketers to anticipate and respond to customer needs before they are explicitly expressed.
- This proactive approach can lead to a more personalized and satisfying customer experience.
- Effective Product Positioning:
- Emotional intelligence plays a crucial role in product positioning, aligning the brand with the emotional aspirations of the target audience.
- It helps in conveying not just product features but also the emotional benefits customers seek.
- Handling Customer Feedback:
- Marketers with emotional intelligence adeptly handle customer feedback, addressing concerns with empathy and sincerity.
- This approach turns negative experiences into opportunities to strengthen customer relationships.
- Social Media Engagement:
- Emotional intelligence is essential in navigating social media, where understanding and responding to the emotional tone of conversations is crucial.
- It involves proactive engagement and addressing customer sentiments on various platforms.
- Crisis Management:
- In times of crisis, emotionally intelligent marketing involves thoughtful and empathetic communication.
- Addressing concerns, showing empathy, and providing solutions contribute to maintaining trust during challenging situations.
- Data Interpretation:
- Emotional intelligence aids in interpreting customer data beyond quantitative metrics.
- It involves understanding the emotional context behind customer actions and using qualitative insights to refine marketing strategies.
- Employee Engagement:
- Internal marketing efforts benefit from emotional intelligence by fostering employee engagement.
- Engaged employees are more likely to convey brand messages authentically, resonating better with customers.
- Continuous Learning and Adaptation:
- Emotionally intelligent marketers engage in continuous learning, adapting strategies based on evolving customer emotions and market trends.
- Flexibility and adaptability are key components of emotionally intelligent marketing approaches.
Why Do We Need a Customer Decision Making Process?
The customer decision-making process is a crucial framework for several reasons, providing structure and insights that benefit both businesses and consumers. Here’s why we need a customer decision-making process:
- Understanding Customer Behavior:
- The process allows businesses to comprehend the various stages customers go through before making a purchase.
- Understanding customer behaviour helps tailor marketing strategies and product offerings to align with their needs and preferences.
- Predicting Purchasing Patterns:
- By delineating the steps customers take, businesses can predict and anticipate purchasing patterns.
- This predictive insight is invaluable for inventory management, marketing planning, and overall business strategy.
- Effective Marketing Strategies:
- The decision-making process serves as a guide for developing targeted and effective marketing strategies.
- Businesses can align their messages and promotions with each stage of the process, increasing the likelihood of resonating with the customer.
- Optimizing Customer Experience:
- Knowing the steps customers go through allows businesses to optimize the customer experience at each touchpoint.
- Improved customer experiences contribute to higher satisfaction, loyalty, and positive word-of-mouth marketing.
- Personalization and Customization:
- A well-defined decision-making process enables businesses to personalize their interactions with customers.
- Personalization builds a stronger connection, making customers feel valued and understood throughout their journey.
- Resource Allocation:
- Businesses can allocate resources more efficiently by understanding which stages of the decision-making process are critical for their target audience.
- This ensures that efforts and investments are focused where they are most likely to yield positive results.
- Building Trust and Credibility:
- The decision-making process emphasizes the importance of building trust and credibility at each stage.
- Trust is a fundamental factor in influencing customer decisions, and businesses that prioritize it gain a competitive edge.
- Enhancing Product Development:
- Feedback from different stages of the decision-making process can inform product development.
- Businesses can identify pain points, preferences, and unmet needs, leading to the creation of products that better resonate with their audience.
- Customer Retention:
- Understanding the decision-making process is not only beneficial for acquiring new customers but also for retaining existing ones.
- Businesses can continuously adapt their strategies to maintain relevance and meet evolving customer expectations.
- Adapting to Market Changes:
- The decision-making process provides a framework for businesses to adapt to changes in the market and evolving consumer behaviours.
- Being aware of these changes allows businesses to stay agile and responsive to shifting trends.
In essence, a customer decision-making process is a strategic tool that empowers businesses to connect with their customers more effectively, deliver tailored experiences, and navigate the competitive landscape with greater insight and adaptability.
The customer decision making process reveals a non-linear path from issue awareness to product selection. Instead, a fundamental and potent emotional response, followed by the subsequent rationale for the choice, often guides the decision-making journey. It is crucial to assess the significance or risk associated with a specific transaction and then work backwards to understand the dynamics of customer decision-making. Marketers need to invest time in comprehending the five stages of the consumer decision-making process to ensure that their marketing approach addresses every aspect of consumer purchasing behaviour.
The consumer decision process, shaped by factors such as product information, brand reputation, and personal preferences, guides individuals through the stages of awareness, consideration, and ultimately, product selection. Understanding the interrelation of different decision-making stages is equally important. For instance, consumers may initiate with an overview of information, attempting to make sense of the gathered data and formulating an explanation for their choice. However, if clarity is lacking, consumers may progress to the next decision-making stage.
Tailoring focus to these stages is imperative based on the nature of the product or service. Some products or services naturally align with specific stages. For example, financial transactions like purchasing insurance are more likely to occur in the awareness stage, whereas a new car purchase is inclined to take place during the consideration stage. Recognizing and adapting to these nuances ensures a strategic alignment of marketing efforts with the intricacies of consumer decision-making.