Customer Decision Making Process

Customer Decision Making process

Why should a business owner or marketer need to understand the customer evaluation process?

What we will cover today

• The 5 step process in customer decision making

• Psychological influences of customer decision making

• 5 areas where you can position yourself in the consumer’s mind

• 8 ways to build raving fans

How do customers buy?

• Research suggests that customers go through a five-stage decision-making process in any purchase.

General buying decision making process

Need Recognition & problem awareness

Information Search

Evaluation of Alternatives Purchase

Post-purchase

evaluation

•Hungry?

• A customer can obtain information from several sources:• Personal sources

• Commercial sources

• Public sources

• Experiential sources

• Customers value and respect personal sources more than commercial sources (the influence of “word of mouth”).

Customer information sources

How does the customer use the information obtained?

• High-involvement purchases

• Low involvement purchases

General buying decision making processWhich of these stages can you influence?

Need Recognition & problem awareness

Information Search

Evaluation of Alternatives Purchase

Post-purchase

evaluation

Post-purchase evaluation - Cognitive Dissonance• Common for customers to experience concerns after making a

purchase decision -> cognitive dissonance

• Services normally carry higher risks due to their intangibility.

• Manage the post-purchase stage• Persuade the potential customer that the product will satisfy his or her needs.

• Post purchase -> customer should be encouraged that he or she has made the right decision.

Perceived risks – how can you help buyers to alleviate high levels of risk during pre and post purchase stages?• Acquisition of information (mass media, WOM, personal

selling)

• Brand loyalty, rewards

• Use of guarantees, third party endorsements

• Money back offers, trial samples

• Assurance

• Product installation and usage instructions

• After sales service and follow up

Psychological influences on customer decisions

Customer decision

influencers

Motivation and

personality

Beliefs and Attitudes

Lifestyles

Socio-cultural

influences

Personal influences

Family influence

General buying decision making processWhich of these stages can you influence?

Need Recognition & problem awareness

Information Search

Evaluation of Alternatives Purchase

Post-purchase

evaluation

“Stop trying to sell, start helping them buy.”

ARE YOU IN YOUR CUSTOMER’S MIND

Pause for thought ......

Customers are buying into your product or service• Where are you placed in

your customer’s mind?

• Are you even in it?

• How do you get in?

• Which part of the brain are you in?

Positioning: The fight for your consumer’s mind

• Attention• Knowledge• Comprehension• Understanding

• Attraction• Conviction• Interest• Desire

• Liking• Curiosity• Action

• Preference

• Recommendation• Word of mouth• Raving fans

Awareness

Consideration

Trial

Repeat Purchase

AdvocatesAdvocacy

BONUS TIPS FOR YOUR BUSINESS SUCCESS

Customer advocacy – a key to business growth

Advocacy drives growth

Focus on customer success

The main intent of organisations with a customer advocacy strategy is “customer success”.

They aim to create more authentic customer relationships by

providing expert levels of individual customer protection and support.

As higher levels of trust, accountability and

transparency build, customer advocacy is a means for organisations to resolve their customer’s problems, and help them make important

decisions.

8 Tools for Driving Growth by Optimizing Customer Advocacy

Customer advocacy

Referral programs

Tryvertising

Empowered involvement

Brand ambassador

programsCausal

Campaigns

Influencer outreach

Advocacy tracking research

Innovation

Ref: Advocacy Drives Growth, London School of Economics

NOW, IT’S YOUR TIME FOR CONSIDERATION AND ACTION

Awareness• What can I do to

increase Awareness in my business?

• ___________________

• ___________________

• ___________________

• ___________________

Consideration• What can I do to

increase Considerationin my business?

• ___________________

• ___________________

• ___________________

• ___________________

Trial• What can I do to

increase Trial in my business?

• ___________________

• ___________________

• ___________________

• ___________________

Purchase• What can I do to

increase Purchases in my business?

• ___________________

• ___________________

• ___________________

• ___________________

Repeat Purchase• What can I do to increase

Repeat Purchases in my business? ___________________

• ___________________

• ___________________

• ___________________

Advocacy• What can I do to

increase Advocacy in my business? ___________________

• ___________________

• ___________________

• ___________________

What we have covered today

• The 5 step process in customer decision making

• Psychological influences of customer decision making

• 5 areas where you can position yourself in the consumer’s mind

• 8 ways to build raving fans

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