Consumer Decision Making Process

In order to most effectively market, sell, and interact with consumers, retailer’s need to maximize their understanding of buyer behavior and the decision making process consumers go through with every purchase decision.  It may seem like common sense, but good salespeople and retailers are in the best selling position, when they are able to get into the minds of the people they sell to.

Step one is to understand why people buy products and services.  Simply put, people buy in order to fulfill a need.  Needs can be functional or rational, or they can be hedonic or emotional.  Simply knowing what type of need a customer is looking to fill is a great start for a retailer.  Emotional appeals tend to be stronger selling points on most occasions, according to David Peoples in his book “Selling to the Top.”  He suggests that whether people buy for functional or emotional needs, there are generally underlying emotional appeals that must be met.  The other benefit of knowing that people buy out of need is that retailers can help us discover what are needs are.  Most successful retailers and advertisers do not wait for customers to figure out their needs.  Instead, they use advertising, promotions, salespeople, visual displays, and more, to draw our attention to needs, or in other words, to get people thinking about how their lives could be better with what they are offering.

Once consumers have discovered or been persuaded that a need exists, they will begin to search for information on how to best fill their need.  This information search generally contains two key elements.  First, consumers determine what criteria are most important as they seek to meet their need.  There are an infinite number of potential criteria, including price, quality, convenience, durability, and service.  These criteria are used to select a retailer, and then a particular product or brand.  The other part of this step is to develop a consideration set.  A consideration set includes all of the retailers, or brand options that consumers will consider when performing their evaluation.  Once the consideration set is established, customers evaluate each retailer or brand on key criteria, giving more weight to the criteria more important to them.  This process is completed using a multi-attribute model, which will be discussed in the continuation (part II) of this article.

Upon completion of the evaluation process, consumers determine what retailer and brand option best meet their need.  This is step three.  Essentially, they are answering the question, “What option gives me the best value.”  The answers to this question vary greatly depending on the quality to price relationship different consumers look for.  The result of this step is the product or service purchase.

Finally, consumers perform a post-purchase evaluation.  Once the product or service is used, consumers evaluate whether their purchase was a good one.  If the product meets or exceeds their expectations, based on the price paid, they will feel satisfied and are likely to be a repeat visitor or customer.  On the contrary, if the value derived is less than what was expected, a feeling of being ripped off or unsatisfied will cause a customer to avoid making the same decision to fill the same need in the future.  Additionally, they often encourage friends and family to avoid making the same mistake.

Retailers must understand the entirety of this process to encourage traffic to their stores and consideration by consumers looking to have their needs met.  Once people come, retailers must have knowledgeable salespeople and good information systems to help consumers.  They must also know the criteria important to their customers in order to provide a good mix or product and service features.  Finally, retailers must follow up to determine whether customers are satisfied and likely to return.