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The Psychology Of Purchasing Decisions
How do we make purchase decisions, and how are we influenced? Read on to find out all you need to know about the psychology of consumer purchase decisions!
How do we make purchase decisions, and how are we influenced? Read on to find out all you need to know about the psychology of consumer purchase decisions! We all consume products and services on an almost daily basis — from the things we really need, to luxuries we think we really need.
But what’s behind our purchasing habits? How do we, the consumers, make purchase decisions and which factors influence us the most? (and, importantly, how do we direct these decision-making processes?)
Understanding the psychology behind each consumer's purchase decision process gives you the tools to optimize your business and develop successful sales and marketing strategies. First, we need to understand the most important aspects of the process.
In this article, we’ll explore the key phases, categories, and factors that consumers go through when making purchase decisions, giving you a better understanding of and boosting your success. Let’s dive right in!
The Purchasing Decision Process
The purchasing decision-making process consists of the entire customer journey, from product awareness to product choice and transaction. The perfect result at the end of each consumer's process is that they choose your good or service.
Understanding the various purchasing behaviors can help you comprehend the rationale behind purchasing decisions. These are the stages each consumer goes through when choosing to purchase a good or service:
- Problem identification
- Evaluation of alternatives
- Purchase decision
- Post-purchase behavior
Stage 1: Problem Identification
The process begins when the buyer recognizes that they have a specific need or problem that needs to be solved.
Stage 2: Research
Once a need has been established, research is required. The extent of the research varies and depends partly on the scale and risk involved of the decision.
Stage 3: Evaluation Of Alternatives
The prospective clients then use the information to evaluate potential alternatives and weigh the pros and cons of each potential product.
Stage 4: The Purchasing Decision
Following this evaluation, the buyer makes the final purchase decision. Ideally selecting your product or service.
Stage 5: Post-purchase behavior
The experiences a customer gathered during the process and with the final product will influence future purchasing decisions.
4 Types Of Purchasing Decisions
There are 4 main types of purchase decisions, each with various motivations and triggers. In order to be perceived positively, your company needs to know and understand these various types of purchasing decisions and how your product or service fits among them.
These four types of consumer purchase decision are:
- Complex purchase decisions,
- Limited purchase decisions,
- Habitual purchase decisions, and
- Impulsive purchase decisions.
Let’s take a look at what characterizes each of these types.
Complex Purchase Decisions
The more complex the purchase decision, the more thorough the decision-making process needs to be. A potential customer will need to consider the following factors before making a purchase decision if the purchase is complex, high risk, or high cost:
- General characteristics and information about the product,
- Pros and cons,
If the product or service your company provides falls into this category, you must ensure that you offer your potential customers extensive consultation through customer service, FAQ sections, brochures, and case studies. These all combine to streamline the customer’s decision-making process and lead to a positive impression of your product or service.
Customers also make these types of purchase decisions from a more rational point of view meaning sales will increase if you provide extensive information to your customers to support the process. Using for example a Guided Selling or Product Discovery solution, you will enable users to find the perfect product, provide an appropriate amount of information and provide clear guidance through your online presence. This will increase overall satisfaction and enhances the user experience. In addition, it fosters a relationship of trust and empathy with your customers, which is a crucial component for your success.
Limited Purchase Decisions
When a customer makes a limited purchase decision, their purchasing behavior is based on prior experience with the product. Fewer characteristics are incorporated and analyzed during the purchase decision process and more emphasis is placed on price, material, and delivery time.
If this sounds like a product you sell, focus on raising brand awareness and reach and your business will flourish.
Habitual Purchase Decisions
As the name suggests, this type of purchase decision is made out of habit. It’s more influenced by the customer’s experiences rather than a thorough decision-making process.
This can apply to products that are consumed on a daily basis. The customer is already aware of the quality and price of the product and doesn’t need to invest more time in conducting research.
Making your customers’ shopping experience as effortless and simple as possible can be an effective way to increase your sales. In the realm of e-commerce, these purchase processes should be straightforward, fast, and simple from browsing to paying. You have to offer users a smaller selection of suitable products that cater exactly to their needs, rather than overwhelming them with too many inappropriate options.
This avoids choice overload, facilitates the customer's purchase decision-making, and improves the likelihood of customers returning in the future
Impulsive Purchase Decisions
Impulsive Purchase Decisions are when the customer makes an impulsive decision, relying less on information and more on emotion.
This purchasing behavior often occurs with low-risk purchases. Emotional stimuli, a low price, irrational desires, or time constraints are some of the things that can provoke an impulsive decision.
Discounts or limited special offers allow you to influence or even manipulate a buyer's impulsive purchasing decision. For your e-commerce business, it’s essential to place special offers in a visible and prominent spot so your customers notice it on the very first sight.
Which Factors Influence Purchase Decisions?
Through this comprehensive overview of the basics of purchasing decisions, there’s only one question left – what actually influences purchasing decisions?
Most of the time, a purchase decision is a complicated process. This process can be influenced by a number of factors, which include the following:
- cultural factors,
- social factors,
- situational factors,
- psychological factors, and
- personal factors.
Cultural factors can influence purchasing behavior. This includes the social class or cultural group your customers belong to. For instance, in a performance-oriented society, the purchase of luxuries such as jewelry or brand products plays an important role. Additionally, social factors such as educational background, family, and social status can have an immense influence on purchasing behavior.
When it comes to situational factors, not only the customer’s mood plays a part in making a purchase decision but also the weather and the urgency of the purchase. Psychological factors like motivation, perception, and mindset all weigh into the final purchase decision as well.
Even though all these factors have an impact on the purchase decision, personal factors are definitely the most powerful. They include the customer’s age, profession, habits, and lifestyle.
The Psychology Of Purchase Decisions: Emotions Are The Key
Purchasing decisions can be rational or emotional to varying degrees, with one certainty: emotions will be one of the most influential factors. Before a purchase decision is made, the consumer has to be motivated to purchase a certain product. Certain beliefs and mindsets will greatly impact every one of the decisions they make.
If a customer is against meat consumption, for example, you can guarantee they buy more plant-based products. Whatever their preference – your company needs to pay close attention to the moral and ethical mindset of your target audience.
The way a customer perceives a certain product or service will also have a monumental impact on the purchase decision. Consumers are more likely to purchase a product or service if they have a positive perception of it.
In e-commerce, product placement and website layout are also very important topics. You need to pay close attention to the content of your website, the pictures, the text, and the layout so that customers easily and quickly understand it.
People prefer the familiar and comfortable. If a customer associates your product or a particular brand with a positive experience in the past, that memory will influence all future purchase decisions. Customers are going to choose the product or service that induces a positive association when deciding between alternatives.
You also shouldn’t underestimate the power of the masses when examining the purchase decision process. Environment influences and shapes people in subconscious ways and has a direct impact on their opinions. How other customers perceive and rate certain products and services also has an immediate effect on one's own purchasing decisions.
A Must-Have For Every Marketing Strategy
To ensure your company’s success, you need to tailor the sales strategy to the emotional needs of your target audience. The more you understand the various factors of your potential customers, the more effectively you can use marketing tools to adapt advertising and content to their needs.
Purchasing decisions are made after going through complex processes that depend on many different factors that vary from person to person.
Want to get a better understanding of your customer’s purchase decisions and influence them in a positive way?
Then try Neocom's Product Discovery solution: It helps your customers find the perfect product in your online shop, faster than ever. Book a free demo and find out now how this innovative software can make your sales process more efficient and more successful!