08/05/2023 • Mike Ellis
The Consumer Decision-Making Process
Insights Article
TLDR;
The consumer decision-making process is a theory that explains how individuals make decisions about purchasing products or services.
It included 5 stages, the identification of need, information search, review of alternatives, purchase and post-purchase review.
Understood properly and coupled with an in-depth knowledge of your customers it can be a powerful tool for digital marketers.
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The consumer decision-making process
First proposed by Cox et al in 1983 the consumer decision-making process was created to explain how individuals make purchasing decisions.
Over the years it has been peer-reviewed and tested by many academics and ultimately stood the test of time and has been used by marketers ever since to help enhance marketing campaigns across various channels.
Understanding it can improve your messaging, landing pages and creatives across PPC, Social Media, SEO and other channels.
What is the consumer decision-making process?
The consumer decision-making process involves 5 steps and explains the process users make when making purchases, and how they evaluate their options and find relevant information. The five stages are identification of need/problem, information search, alternatives evaluation, purchase decision and post-purchase evaluation.
Although there are different types of purchase decisions such as nominal, limited and extended they all go through the 5 stages to determine what products or services best fit their needs. The various type of purchases may make some quicker than others and not all are made consciously but regardless they still go through the consumer decision-making process.
By understanding the different stages and how to relate this to your product and customers, marketers can maximise the effectiveness of their campaigns.
The different stages of the consumer decision-making process
Identification of need/problem
The first stage is the identification of a need or problem. This is where the individual has a discrepancy between their desired current state and their actual state, in other words, they have a need they want to solve.
A need can be either physiological, psychological or functional.
Physiological e.g. hungry or thirsty
Psychological e.g. desired emotional state like relaxed, accepted or happy
Functional e.g. a quicker way to process data or run projects
How can we influence users at this stage? It starts by matching up your product with the need it solves.
Physiological Needs: FMCG companies are most likely to be appealing to this need. Companies like Mcdonald's and Starbucks are always targeting this need, trying to create a need in us but placing their locations conveniently on the drive home.
Interestingly Starbucks don’t target our physiological need of thirst, they target our desire to be alert and energised 🤯
Psychological Needs: If you are in fashion or the leisure industry you will most likely be appealing to the psychological needs. Using campaigns that speak to the want for individuals to be fashionable and have the latest trends or to relax and get away from the day-to-day.
Functional Needs: B2B and service businesses fall into this category. People have a very particular need like a boiler breakdown or your car needs an MOT. By far the easiest connection to make but because of this the competition from a marketing perspective is harder.
Once you connect your offering to the type of need you can create marketing campaigns that connect with your audience helping to build a brand across multiple platforms.
Informational search
Once the individual has identified their need they look for a way to solve their problem through various sources.
Now we're not just about people heading over to Google to look for information. Individuals will seek information from one of 4 sources, personal, commercial, public and experiential.
Personal: An individual will use their own experience and memories to help solve a problem. Positive or negative this is always one of the preferred ways individuals make decisions.
Commercial: Usual marketing communication and commercial sources of information is where marketers can have the most influence and can be thought of as media advertisements, direct marketing, search and social media ads of commercial events.
Public: More in-direct marketing like media in print, radio and online information sources like forums or organic social media. Public sources are information that exists in the public domain but which the individual searches for themselves.
Experiential: The possibility of examining and using a product or service for a specific duration of time. A trial period.
An individual may use one or multiple sources of information before progressing. This again depends on the type of problem and the individual's life preferences.
Review of alternatives
Each individual has a predefined set of criteria they will evaluate a product or service before making a decision.
This set of criteria is based on both external and internal factors that can be driven by an individual's current circumstance, demographic, geographical location and much more.
This is where knowing who your customers are becomes important. If your customers are retired couples, what they value will be vastly different to start-up entrepreneurs and university students.
Marketers should ensure their USPS target their customers and bring those to the forefront of any campaign.
If you are in fast fashion you want to be highlighting the speed of delivery, return policies, celebrity endorsements and customer reviews as these are what matters most to that audience. Conversely, if you are in high-end luxury fashion you will want to highlight the quality of the material and the process in which the garment is made. Intrestly celebrity endorsements work for both of these groups the type of celebrity however will be very different.
Without knowing your audience's motivations you may be highlighting the wrong USPs.
Purchase
By far the most important part of the process. This is what the consumer has been building towards and what you want them to do. However, there are multiple types of purchases that consumers can make; planned, impulse and partial.
Planned: This is as you can guess, when the consumer has planned to make the purchase, they have consciously thought about the purchase. The initial need was most likely functional over psychological or physiological.
Impulsive: Usually done with more sub-conscious thought the impulsive purchase is quicker and usually driven by psychological or psychological needs. The best way to think of this is going shopping to make you feel better.
Partial: Rather than the consumer committing to the full purchase they take the next necessary step in the process. E.g. signing up for a free trial or creating an account.
Most direct marketing campaigns focus on the purchase phase with ads targeting the bottom of the funnel and being measured on their ROI. It's not surprising as we can have a lot of say here.
Depending on the type of purchase that is relevant for your users multiple techniques can be applied. Discounts and urgency messaging can help drive all types of purchases, while scarcity is most impactful for planned and impulsive purchases.
As with all stages knowing how your product relates to this stage is the most important factor in creating effective campaigns.
Post-purchase review
The final stage is the post-purchase review. This is done after the purchase and involves the individual critically analysing the value the purchase has given to them, usually in line with the values reviewed at the review of alternatives stage.
Buyer's remorse is a term used to describe the sinking feeling most individuals get after a purchase. The feeling of whether we have done the right thing, where we question our own decision-making.
The good news is that we marketers can help individuals at this point by ensuring the value the brand adds continues beyond the initial purchase. Email follow-ups sending user guides, and warranty information are great ways to reassure users. Ultimately anything that can be considered aftercare is a great way to ensure a positive post-purchase review and build a lifelong customer.
Apply the consumer decision-making process to digital marketing
The consumer decision-making process is a great tool to support your marketing efforts. However, it still relies on knowing who your customers are and how your product fits in the market.
Once you know this you can work through the process and identify the channels that are best for each stage and the messaging to go with it.
Quite naturally the consumer decision-making process and the marketing funnel are relatively well aligned with the top of the funnel being best for helping users identify their needs whilst the bottom of the funnel is best for the purchasing stage.
As a quick reference here are the digital channels that are typically best suited for each stage;
- Identification of need: Paid Social, Display Advertising, Digital PR, YouTube, Content Marketing
- Informational search: SEO, PPC, Paid Social, Social Media, YouTube, Content Creation
- Review of alternatives: PPC, Paid Social, Email, YouTube, SEO
- Purchase: PPC, Paid Social, SEO, Email
- Post-purchase evaluation: Email, SEO
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