What do you call the processes consumers use when making purchase decisions?

How does a consumer decide whether or not to purchase a particular product? What are the steps involved in the individual decision making process?

When consumers go shopping, they usually start at the storefront and then move through the store, looking for items that interest them. Once they’ve found something they want to purchase, they’ll look at price tags, read descriptions, and even ask friends and family for recommendations before deciding to buy.

As a business owner, you need to familiarise yourself with specific steps your consumers go through before buying your product or service. Consumer decision-making involves these five steps mentioned below.

You are no doubt used to wearing many hats during your working day. Chief among them is the salesperson and marketer.

As your brand’s chief salesperson and marketer, you sometimes need to put yourself in your customer’s shoes. See your business from your customer’s perspective.

Studying your consumer behaviour is essential. The knowledge you derive from studying consumer behaviour will help you positively impact your business.

You can either do it yourself or outsource this task to a professional digital marketing agency in Nigeria.

This article will help you understand your consumers’ decision-making strategies or decision-making skills in purchasing your product or service.

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Table of Contents

What Is Consumer Behaviour?

Anyone who purchases products and services from the market for their consumption is called a consumer. According to Business Study Notes, consumer behaviour is about understanding and studying individuals, organisations, or groups of people and their process while selecting, securing, using, and consuming a product or a service to satisfy their needs.

What Is Consumer Decision Process?

The consumer decision process refers to the decision-making stages that a consumer undergoes before, during, and after buying a product or service. We also know it as the buyer decision process, buyer’s journey, buying cycle, buyer funnel, consumer purchase decision, and buyer’s decision process.

Despite what you call it, the vital thing to note here is that the typical customer passes through five decision-making stages or five step process in their purchasing cycle.

The decision-making process can be simple or complex depending on a consumer’s opinion of a product or service. Unlike quick decisions, tough business decisions may include comparing, evaluating, selecting, and purchasing various products or services.

The typical process involves five stages. But researchers and organisations sometimes extend the purchasing process from a five-stage model into a seven-stage model.

So, please do not be surprised if you come across some articles mentioning seven stages rather than five. Regardless, these five processes are usually present in either model.

According to this article, the idea that an excess of choice always paralyses consumers is too simplistic – choice overload depends on the product or service purchased.

The above article mentions a study that found that people demanded and preferred more choices when searching for and choosing a ‘hedonistic’ product than they did for ‘utilitarian’ products.

Hedonistic products are nice-to-have items that generate an emotional response and pleasure, such as perfumes, designer clothes, jewellery, and sports cars.

As a business owner/decision maker, it is your goal to get inside the head of your consumer. You want to figure out how the consumer makes decisions and how you can get them to decide to purchase our product or service.

When your consumer develops a craving that they want to be satisfied with, you do well to guide them to fulfil that craving with your product or service.

As a business owner, you must use marketing-controlled information sources (e.g., radio, online ads, mobile phones, newspaper, television and magazine ads) or any other public source to help educate your consumers so they can make thoughtful decisions about your product or service.

What Are the 5-Step Decision-making Processes?

Once a consumer intends to purchase a specific item, they will typically follow these five basic steps:

1. Problem Recognition
2. Search Process
3. Evaluating Alternatives
4. Selection Stage
5. Evaluation of Decision

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The Importance of the Consumer Decision Making Process

According to this article, the consumer buying decision process is a meaningful way to strengthen your company’s sales function. And develop a sales and business development strategy that will continue to keep your pipeline of prospects full.

The same article notes that it will help you understand and refine your customer buying process/customer journey. It allows you to develop evidence-based strategies and make data-driven choices. An understanding of the above consumer decision-making process is precious for all businesses.

Understanding these stages in your business will help you identify internal or external stimuli in real time. You can use this stimulus to make your product or service more enticing to your consumers.

According to Research Leap, the knowledge of buying behaviour sheds light on the psychological factor, i.e., the psychology of how consumers think, feel, argue, and select alternatives (e.g., brands, products, and retailers).

It also sheds light on how the consumer’s environment (e.g., culture, family, media) influences them and how consumer motivation and decision strategies are distinct between products.

The same article notes that knowing about the consumer decision-making process from a marketer’s perspective is valuable.

It will help you target your customers, improve your products or services, and understand how customers view your products versus competitors’ products.

There are two main factors to consider when developing your marketing strategy based on consumer decision-making.

Either the consumer knows your brand or has your brand in mind when about to buy. Or they may have never heard of your brand at all as a valid option.

These two factors will help you craft your marketing strategy for each stage of the consumer decision-making process.

Now let’s inspect each of these stages one by one. You can take a cue from each of these steps below and change them to suit your marketing efforts and make your customers’ journey a pleasant personal experience.

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Step 1: Problem Recognition

The first step in the consumer decision-making process is awareness. According to this article, the problem recognition or need recognition stage is the first and most crucial step.

If consumers do not perceive a problem or need due to internal or external factors, they will not consider a product purchase from a commercial source.

As a savvy business owner or marketer, you must always strive to create a “need,” i.e. need recognition in your customer’s mind for your product or service. Your task is to present your brand as the best choice.

Your task as a business owner or marketer is to study your consumer behaviour/buying process and take advantage of every purchase situation to move your target customers along the buyer’s journey.

Use marketing automation to assist your consumers through every customer journey stage. Consumers have short attention spans, so marketing automation is essential in the need recognition stage and the purchasing decision process.

Step 2: Information Search Process

It is the second step in the consumer decision-making process. This step involves gathering information about the product from various websites, social media, etc.

As the name implies, the information search process is the pre-purchase stage, where the consumer searches through external or internal stimuli, both online and offline.

This customer search process gathers information on the various available products or services that solve the problem they recognised in the previous stage.

The Internet and search engines have greatly assisted consumers in their information searches. These days, consumers use the Internet to do their primary research and use Google as their primary research tool.

Therefore, business owners must do all they can to take advantage of these technologies to create brand awareness for their business online.

According to this article, in this stage, many consumers turn to Google since it’s the biggest search engine online that consumers go to by default to search for solutions to their problems.

The same article mentions that in April 2018, Rand Fishkin shared that Google properties own over 90% of all searches.

These statistics emphasise the need for business owners to optimise their content to appear in search results. But it is not enough to appear in search results alone. You need to optimise your content to appear in the top 10 search results positions for optimum results.

During the information search stage, the consumer may consider any present or previous experiences they or their family, friends or peers might have had with a brand.

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Step 3: Evaluating Alternatives

This is the third step in the consumer decision-making process. Consumers compare prices, features, and other attributes of competing products.

The consumer would have identified several alternative products or services that could satisfy their needs through the previous step above.

The next step is the alternative evaluation process. The evaluation of alternative solutions is when the consumer takes the time to test all the options to satisfy their needs to ensure they are not taking a wrong decision.

At this stage, the consumer evaluates their options based on product price, quality, service provider, quantity and value-added features.

They weigh their choices against comparable alternative products, services, or brands in the market.

Every consumer wants to find the best option in this decision-making model. They do their best to manage and minimise the risk factor by taking their time to evaluate alternatives.

They need to know they have found the best deal or consumer choice possible to satisfy their needs. This is a strategic decision critical for risk management and to help the consumer arrive at the best logical conclusion for their purchase decision.

Business owners should ensure that they put extra effort into customer service and that their marketing campaign shines above the competition.

In this stage, consumers whose previous bad experiences with your brand will discard your brand, favouring the competition. Therefore, you need to pay attention to your current customer. This will prevent them from considering the evaluation of alternatives.

Step 4: Selection Stage

The consumer decides whether to purchase the product or service at this point. This is when consumers are comfortable bringing out their cash, cheque or credit card. According to Philip Kotler, Keller, Koshy and Jha (2009), [6] negative feedback from previous customers and motivation to comply with or accept the feedback are the two main factors that can disrupt the final purchase decision.

This negative feedback might include word of mouth from previous customers, customer reviews/consumer reviews, the vendor’s reputation, input from family, friends, peers, and the product’s warranty duration. It might also include the convenience of the vendor’s location and any time pressure associated with purchasing the product or service. However, this does not mean you have to neglect any positive reviews you receive.

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Step 5: Evaluation of Decision

The final step is the post-purchase evaluation stage. According to a Business Study Notes article, it is the final stage when the consumer tests or analyses the purchased product. They assess the product’s usefulness, the level of customer satisfaction, and the product’s ability to fulfil the consumer’s needs.

In the post-purchase evaluation stage, as described here, if a customer discovers that the product/service has matched/exceeded their expectations, they will probably become a brand ambassador/brand evangelist. They influence other potential customers in stage 2 of their next customer journey, boosting the chances of a future purchase.

The article notes that if the customer finds the product or service does not match or exceed their expectations, it will cause negative feedback. If this happens in the search stage, it can halt a potential customer’s journey toward your product or service.

We call buyers’ remorse or cognitive dissonance in any post-purchase regrets or negative after-sales service experiences the consumer feels for purchasing your product or service.

Your consumers’ post-purchase behaviour study can go a long way in helping you craft programs that can help you build or improve brand loyalty.

Conclusion

In conclusion, regardless of the types of decisions to be made, understanding the consumer decision-making process will help you identify what consumers need and how they prefer to receive it. This knowledge will allow you to avoid any potential pitfalls and to make more informed decisions in creating products and services that meet their needs.

As you can see from the five steps in the consumer decision-making process, our understanding of this process goes a long way in making our sales and marketing efforts more productive.

It is worth mentioning that the more expensive the product or service, the more complex the consumer decision-making process becomes. Thus, it would help if you considered this in your business model.

So, there you have it. Consumer decision-making involves these five steps to make effective decisions. As a business owner, you must create the best experience possible for your target audience. It will help you develop a loyal customer and brand evangelist.

The customer journey map is complex, especially for the B2B customer. Do you need any further clarifications? Do you need someone to help you iron out any kinks in your customer journey? Do you need help finding your target market in a saturated marketplace? Click here to schedule a call with me. I’ll be glad to help you attract your future customers.

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