Understanding How Consumers Make Decisions
What goes through a consumer’s mind when they’re evaluating a product? What influences whether or not they go through with a purchase? And perhaps most importantly, how can we influence those thought processes to encourage purchases?
Though consumers are unique individuals, their decision-making behaviors generally follow very similar paths. If their evaluation criteria check out, so will they. But sometimes, they may encounter a barrier to purchase—a frustratingly common obstacle that can prevent them from making a purchase.
What is the Consumer Decision-Making Process?
The consumer decision-making process is a five-step process by which consumers evaluate a purchase decision. The five steps help consumers determine which product or service best fits their needs. This process often goes by many different names: the buyer’s journey, sales funnel, consumer purchase process, buying cycle, etc. But each name is referring to the same process.
By gaining a complete understanding of the consumer decision-making process, you can then learn how to optimize it, which will help you improve conversions and maximize your results. You can implement various strategies to refine your marketing tactics at each step of the process and make it easier for customers to say “Yes!” to your products.
When reviewing the five stages of the consumer decision-making process below, put yourself in your customers’ shoes—try to consider what your own customers’ might be thinking during each of these steps.
What Are the Steps in the Consumer Decision-Making Process?
Step 1: Awareness/Need Recognition
Identifying a problem and recognizing a need
The first step in the decision-making process is when a consumer realizes they need a specific product or service. Put simply, they figure out they have a problem and want to buy something that solves it. This awareness can be prompted internally or externally. For example, an internal stimulus would be a consumer realizing they’re hungry and going to buy something to eat. An external stimulus would be a consumer seeing asocial media ad for a new healthy, ready-to-eat meal on Instagram and making a note to buy it next time they’re at the grocery store.
While you won’t be able to make much of an impact on internal stimuli, you can influence external stimuli—this is what brand awareness campaigns are all about. You can invest in building brand awareness and recognition to get your products in front of consumers and make them want to buy what you’re selling.
Step 2: Research
Searching for options
If a consumer has a problem but they aren’t sure what they need to resolve it, they’ll research their options. Consumers consult many sources while gathering research: online reviews, friends and family, social media, or exploring brick and mortar locations. They’ll also rely on their perceptions of different products or brands. For example, if a consumer is looking for a new vegan under eye cream, they may search ‘best vegan under eye creams 2022’ and read through a handful of product lists by beauty publications, and click out to a number of product pages. They’ll look through reviews and come up with a shortlist of options to consider. If you sell vegan skincare products, your goal should be to end up on those lists.
During this step, it’s important to position yourself (and your product) as a trustworthy, reliable source. The amount of research gathering is relative to the size and importance of the purchase, so it varies widely. Investing in SEO, digital marketing, and customer feedback campaigns can be helpful here to ensure you show up prominently when customers are searching for information.
Step 3: Competitive Evaluation
Exploring alternatives and evaluating competitors
Once a consumer has done a sufficient amount of research, they’ll then start evaluating their choices and seeing if there are any viable alternatives. To continue off of our last example, a consumer who’s looking for a new vegan under eye cream may be deciding between 3 beauty brands. They want to make sure the cream they choose is the best choice for them, so they’ll go to each brand’s website, read the product page, check the ingredient list, compare the prices, and read reviews. They may go into a beauty store to try out each product in person. Their own past experiences with the brand (when applicable) might help shape their decision, too.
The evaluation stage is a crucial step in the decision-making process. As a brand, your goal should be to convince consumers that you’re the best choice. Of course, you’re probably not interacting with these consumers 1:1, so your in-store or digital presence will need to do the heavy lifting. The most effective way to do this is to ensure you offer plenty of consumer feedback (reviews), ample product information, competitive pricing, and clear differentiators.
Step 4: Purchase Decision/Conversion
Making a purchase
Once a consumer has identified a need, researched their options, and explored alternatives, it’s time to make a purchase. Hopefully, they decide to purchase your product! Unfortunately, there’s still a chance that you’ll lose customers even if they decided your product was the best fit for them.
Why? Because they might have encountered a barrier to purchase. There are many functional and emotional barriers to purchase that may prevent a consumer from buying from your business. If they encounter a barrier, they may go back to the research stage and start their search over, or decide to go with a competitor. During the decision stage, your ultimate goal is to make it as easy as possible for customers to buy what you’re selling.
Step 5: Post-Purchase Evaluation
Reflecting on a purchase
The decision-making process doesn’t end when a consumer makes a decision. Once they purchase a product, they’ll reflect on how they feel about their purchase: was it a good investment? Did it help solve their problem? Would they buy that product, or another product from that brand, in the future?
To encourage customers to revisit your brand in the future, you can leverage post-purchase strategies to improve customer sentiment and encourage repurchasing.
Learn How to Better Understand Your Customers with Starlight Analytics
If you’d like to better understand your customers and their decision-making, the team at Starlight Analytics can help. Our suite of custom research services, including social listening and price testing, include proprietary data modeling techniques that offer a thorough, practical approach to learning more about your customers. We can help you identify the key insights you need to connect on a deeper level with your customers.