The Consumer Decision Making Process - How To Decode Your Customers

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Can understanding the consumer decision making process help grow your business? The simple answer is yes. Keep reading if you want to know how the consumer decision making process can elevate your marketing game and attract new customers.

The consumer decision making process is the steps a consumer goes through when making a purchasing decision and buying a product or service.

Understanding the consumer decision making process is essential to understanding how your customers think and act. This article outlines the consumer decision making process, and how you can use it to improve your business to gain more customers.

Why you need to understand the consumer decision-making process

Understanding the consumer decision making process, or the consumer buying process, is central to marketing your business. It is especially important if you are a small business owner with limited marketing resources. Recognizing each step in the process will help you understand what your customer needs in each step of their buying journey. You can then optimize your marketing to influence the customer in every step. Not only will this help in communications with your audience, making it more likely you will reach the right consumers. But it will also help adjusting the buying experience for the right customers increasing your sales.

Before we delve into each step of the consumer decision making journey, make sure that you have a basic understanding of marketing. If you don’t, I recommend reading this article on Small Business Marketing Tips to get a solid understanding of the foundations of marketing.

The five steps of the consumer decision making process are:

Need recognition
Information seeking
Evaluation of alternatives
Purchase
Post purchase evaluation

What each step involves and what it means for your marketing will be explained in the rest of the article.

Step 1. Need Recognition

The first step of the consumer buying process is need recognition. This might be the most important step to understand because it sets the foundation of why anyone should buy your product and if there even is a need for it.

The consumer decision making process starts when a consumer discovers a need. A need is recognized when the consumer either wants to escape a current state or when they want to get to a desired state. The first state means that a consumer has discovered a problem they need to solve. The latter means the consumer discovers a new desire and aspires to transition to this desired state. These two needs make up the reasons to why a consumer later buys a product – also called the buying motives. Thus there are two types of buying motives; informational and transformational, that activates and drives the consumer decision making process.

Informational buying motive

The informational buying motive is activated when the consumer has a problem in their current state that needs to be fixed. Usually, informational buying motives are rational, functional and utility based. This buying motive can be of several characteristics:

Problem solving; when a problem has already appeared and the consumer needs to solve it.
Problem avoiding; when the consumer wants to avoid a potential problem in the future.
Incomplete satisfaction; when the current offering on the market cannot satisfy or solve the problem.
Normal expenditures; basic utilities such as toilet paper, tooth paste etc.

If your product or service aims to satisfy informational buying motives you should focus on functional solutions to the problem in your marketing. This means not only focusing on benefits or problems solved in advertising or communications with potential customers. It also involves adapting the way your physical store or webpage is set up to satisfy the informational buying motive.

Transformational buying motive

The transformational buying motive is activated when the consumer wants to transition to a new desired state. Transitional buying motives are usually emotional, symbolic and hedonic, which can take the following forms:

Sensory; appeasing the senses such as eating and drinking.
Social acceptance; which means the customer aspires to be part of a certain social group or status.
Intellectual stimuli or skill; the need to learn, develop and pursue challenges.

When the product or service you are selling aims to satisfy transformative buying motives you need to focus on activating emotions through the consumer buying process. This means performing marketing activities such as communications/advertising that is engaging and evokes emotions.

What does this mean for you?

A product is not necessarily only satisfying one of the buying motives but can appeal to different buying motives. It can be a combination of both informative and transformative buying motives or a combination within the two types of motives. For example sensory and social acceptance motives can be in works when buying cashmere shirt form a luxury brand. The consumer wants the sensory feeling of soft cashmere against the skin as well as the social status from buying a luxury brand. A combination of informative and transformative motives can be a hungry consumer. The consumer has a problem that needs to be solved, hunger, but the consumer also wants to satisfy sensory motives with a meal that tastes good that they enjoy.

Understanding what type of buying motives exists for the product or service you sell is important to be able to attract the customers in your marketing. You need to think about different buying motives that your product or service can have. Different customers can have different buying motives for the same product. For example going to going to the gym can have many different buying motives. One consumer can do it because of pure health reasons – perhaps they are unhealthy and overweight and therefore they have a problem they need to solve. Another person can do it for social acceptance; train to be fit and more attractive according to social norms. A third person can do it to pursue a challenge and develop a skills; learn a specific gym activity such as cross training.

Because different consumers can have different buying motives for the same product or service, buying motives can also be used to segment different consumer groups. They make up a behavioral segmentation and can be used to define your target audience. Target market analysis and defining your target audience is an important step of your marketing strategy along with knowing the consumer decision making process. If you want to learn more about how to segment your target market and use buying motives in segmentation read this article about Target Market Analysis for Small Businesses.

Step 2. Information Seeking

After a need has been identified by the consumer, they seek potential ways to satisfy that need. This is called the information seeking stage. The goal of the information seeking stage is for the consumer to build up an awareness set of the possible solutions to satisfy their need.

Internal & external information seeking

The consumer’s information search is both internal – based on memories – and external – based on actions. This means that the consumers starts the information seeking by searching their memory for solutions to their need. If they do not find enough information to satisfy their need within their own memories and knowledge the consumer seeks external information.

External information is information the consumer gets by searching online, through commercials, visiting a store or from asking friends or family. It is basically all information the consumer receives from outside their own mind and knowledge. The external information seeking can be both active and passive. The consumer does not always actively pursue information in order to make a purchasing decision – even though that is often the case. The information seeking can be passive and ongoing while the consumer scrolls through social media for example, and come across a post with information that can help satisfy their need.

Extent of information search

Depending on what type of need the consumer has, including the type of buying motive, the extent of the information search varies. For example if the consumer is out of milk and needs to buy more they will not perform an extensive information search before they choose which store to go to or which brand of milk to buy. The consumer will base their purchase of milk on routine – or habit – and go to the closest grocery store and buy the same brand of milk as last time. Meanwhile, if the consumer is looking to buy a new home the information seeking stage might take months, if not years. The consumer will most likely search online about different neighborhoods, scroll through social media to gain inspiration of the style of the home and ask friends about realtor recommendations. All this before even going to look at a home.

What type of information search the consumer does is based on perceived risk and engagement of the purchase. If the consumer is very engaged in the purchase and the purchase involves high financial or social risk, the information seeking process will be longer. On the other hand, when little risk is involved and the consumer has low engagement the information seeking process will be very short, if not almost non-existent.

Understanding how the consumer searches for information is necessary in order for you to be able to reach the consumer during this stage. The information seeking stage is an important opportunity to reach the consumer because they have already identified a need and are now looking for a solution to it. You want to make sure that your product or service is in the consumer’s awareness set, or otherwise they won’t consider you when making their purchasing decision.

Step 3. Evaluation of Alternatives

The third step in the consumer decision making process is evaluation of alternatives. This process goes on parallel with the information seeking process. The purpose of evaluation of alternatives is for the consumer to find the alternative that satisfies their need best. This is where the consumer compares and contrasts the different alternatives that they find in their information search.

High vs. low engagement

Again, the engagement level of the consumer determines how extensive the evaluation of alternatives process will be.

High engagement purchases will make the consumer evaluate the consequences of the purchase and what other people think about it. The consumer will evaluate the different products or brands from their information search in regards to three factors:

Personal beliefs about which attributes a brand/product has and how good these are.
Attitude towards the brand/product – i.e. whether the consumer likes or dislikes that brand.
Normative beliefs, which involves how other people think about/react to the product/brand.

These three elements will then determine which product the consumer will decide to purchase.

Low engagement purchases will not have an extensive evaluation of alternatives – they might actually skip this process completely. Like mentioned previously, low engagement purchases tend to be routine purchases. The consumer’s awareness of a product or brand is then more important than their attitude towards it. The consumer buys the product they know exists and they have bought before.

Whether your product is high or low engagement is not only determined by the perceived risk and complexity of the product. It is also determined by how interested your target audience is in the product. For example purchasing clothes for one customer can be boring and a necessity, while for another customer it can be a fun activity. The level of interest in fashion that the customer has determines how engaged they are in the purchase. Knowing your customers is vital to understand how they consider your product and how engaged they are in the purchase.

If you want to learn more about how to create engagement amongst your customers on social media, read this article on Social Media Engagement Posts.

Deciding what alternative

Consumers have different points of references and therefore value different aspects when making their decision on what product can best fulfill their need. That is why it is especially important to know your target audience and how they choose, to be able to determine how your business can best communicate to them. Aspects that consumers take into consideration when evaluating the alternative products can be quality guarantees from marketing or warranties as well as price. Price can be used both to indicate quality and as a range that the consumer uses to narrow down the alternatives. When making decisions consumers often use a rule of thumb. This can for example be ‘lowest price’, ‘most famous brand’ or ‘best quality’. It is important to know how your target audience use rules of thumb when making decision so you can adapt your offer accordingly.

Step 4: Purchase

At the fourth step in the consumer decision making process the consumer makes the actual purchase. This might seem like the most significant step in the process, but it is the three steps leading up to the purchase that decides what product the consumer will buy. Although, there are several things to consider during this stage.

Buying Location

The location where the consumer decides to make the purchase will impact the purchase. The buying location can be online or in a physical store, it can be directly from the brand or from a retailer. Step 1-3 of the consumer buying process will impact where the consumer ultimately makes the purchase. But there are instances where the buying location will be decided after the consumer has decided on the product.

For example if the consumer has decided to buy a specific pair of Nike shoes, they can purchase them from Nike’s website, a Nike store or from a retailer either online or a physical location. If the consumer wants the shoes today they will most likely go to the closest physical store. But if the consumer does not have an instant need and instead values convenience they will buy the shoes online, from the comfort of their home. Again, knowing what your target customer values will help you influence their decision.

Planned vs. unplanned buying

Another factor to consider during the purchasing stage is whether the purchase is planned or unplanned. There are several levels of planning a consumer can do before a purchase, which are connected to the engagement of the purchase. The purchase can be completely planned, where the exact product, location and time has been planned. Or the purchase can be completely on impulse – where the consumer experiences an instant emotional need and buys a product. But the purchase can also be partly planned either by deciding on the product category, brand or location beforehand. How the consumer plans their purchase is important to know to be able to attract the consumer at the right stage.

Attitude towards shopping

Lastly, the consumer’s attitude towards shopping in general will determine how the purchase is made. Some consumers like shopping, while others detest it. This affects, not only the actual purchase, but all steps leading up to it as well. If the consumer in general dislikes buying things they will make the buying process as short and efficient as possible. They will require help throughout the process that is rational and straight to the point. While the consumers that have a general positive attitude towards shopping will be more engaged in every step and require more inspiring content, with more information.

Step 5: Post Purchase Evaluation

The fifth and final step of the consumer purchasing process is the post purchase evaluation. Most people might think that the last step of the process is the purchase but the post purchase evaluation is a significant step in the process. You might have heard that the cost of attracting a new customer is much more expensive than retaining a current customer. That is where the fifth step comes in; it is vital to make sure that the customer is satisfied after the purchase. The purpose of the post purchase evaluation is for the consumer to evaluate whether the product they bought, fulfilled their need.

For a low engagement purchase this step will be short and the consumer will not reflect more than whether they were satisfied with their product. On the other hand, for high engagement purchases this step will be more extensive. The consumer will consciously reflect on the purchase and evaluate how satisfied they are with their decision.

How well a product fulfills the consumer’s need defines what they will do next time they have the same or similar need. Therefore, it is vital to make sure that the product lives up to the marketing promises leading up to the purchase. It is also important to understand that the relationship with the consumer does not stop after the purchase. Post purchase communications will help make the consumer more satisfied and, thus, more likely to come back and become a repeat customer.

Influences on the buying process

By now you should have a solid idea of how consumers think throughout the different stages of the consumer decision making process. The next step is to understand how your target audience thinks throughout the buying process so that you can adapt your marketing. In order to do this you have to understand the different factors that influences consumers throughout the process. These can be divided into personal and social influences.

Personal Influences

Personal influences are internal factors that affects the decision making process.

Types of personal influences are:

Motivation; what motivates the consumer to buy? It can be physical needs safety needs, love and community, status and self-realization.
Beliefs & attitudes; what the consumer thinks about a product, service or brand and whether it is positive or negative.
Personality; who the consumer is or aspires to be.
Lifestyle; determines interests as well as choices.
Life stage; what stage in life the consumer is in, such as young student, building a family or middle aged.

Consider what these personal influences are for your target audience and how these affect them at different stages throughout the buying process.

Social Influences

Social influences are external factors that comes from the society around the consumer. The different social influences that affects how the consumer makes decisions are:

Culture; the traditions, taboos, values and overall attitudes in the community the consumer lives in. Cultural norms affect how the consumer ‘should act’ and therefore also how they ‘do act’.
Social status; what social status a consumer has and the social groups they belong to affects how they perceive certain products or brands.
Geo-demographics; the location the consumer lives as well as their demographics influences how they make decisions.
Reference groups; are groups that the consumer identifies with, which affects their decision making.

Make sure to factor in these four social influences as well when you are trying to understand your target audience’s decision making process.

Adapting your business to the consumer decision making process

If you have come this far, how consumers make decisions might seem like a complicated process. That’s because it is. Human beings are complicated creatures and understanding their decision making process and the influences on this process is an actual science; consumer behavior. Gaining a deeper understanding for how consumers think and behave will be useful for adapting your business offer and marketing to your target audience.

So, how do you adapt your business based on the consumer buying process?

First of all, you have to make sure that you have done your target market analysis and have a defined target audience. Only after you have done this, can you begin to adapt your business to fit the needs and behavior of your target customer.

There are many important questions you can ask in order to outline your target audience’s journey throughout the consumer decision making process.

Need recognition:

What is the need your customer is looking to fulfill?
What is your customer’s buying motive? Do they need to solve a problem or transition to a desired state? Or a combination?

Information Search & Evaluation of Alternatives:

Where does your customer search for information?
Internally or externally?
What channels? (Social media, google, in-store, friends & family etc.)
How much information do they seek?
How engaged is your customer in the decision making process?
Is your product low or high risk?
How complex is your product?
How interested is your customer in your product/product category?
What are the alternatives are your customer is evaluating? (Competitors)
Do your customer have a ‘rule of thumb’?

Purchase:

Where does your customer make purchases?
How planned is the purchase?
What is your customer’s general attitude towards shopping?

Post-purchase Evaluation:

Does your product fulfill the customer’s need?
Does your product satisfy the marketing promises you have made?
How do you follow up with the customer after purchase?

Personal & Social Influences:

What is the customer motivated by?
What is the customer’s beliefs and attitudes?
What is their personality, lifestyle and life stage?
What culture does your customer come from?
What is their social status and what reference groups do they have?
Where does your customer live and what are their demographics?

The purpose of marketing is to pull the consumer through this decision making process and help them make the decision to buy your product. Answering all of these questions will give you a solid foundation of understanding your specific target audience and the journey they take when buying your product. This will help you adapt your communications and branding in order to better attract your target audience. If you want to learn more about how you can adapt your brand to your target audience, check out this article on How to Build a Brand as a Small Business.

I hope this article gave you a deeper understanding of how consumers think in every step of the consumer decision making process. It will hopefully give you the necessary tools and information that you need to pull your target audience through their decision making process and buy your product.

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I'm Emma Ellinor

I’m a digital marketer, project manager and retail analyst.

For the past 7 years I have immersed myself into the field of marketing and management. I am on a mission to inspire more women to take their business to the next level. By sharing my journey to escape the 9-5 trap along with useful marketing, time management and small business tips.