Why Consumers Buy What They Buy

Why Consumers Buy What They Buy By Laura Lake Author of Consumer Behavior for Dummies

Why Understanding Consumer Behavior is Important
Consumer behavior is more than a guessing game – it’s crucial to your marketing.

Importance of Understanding Consumers
A clear understanding of the consumer usually makes the difference between companies that succeed and those that fail .

Understanding Consumers Increases Your Chances
By understanding your customer’s needs and concerns as they move through the decision making process of a purchase – you increase your chance of winning their business.

Found Online at: http://www.dummies.com/how-to/content/consumer-behavior-for-dummies-cheat-sheet.html

Phase 1: Recognition and Awareness of Need
Phase 2: Search for Information
Phase 3: Evaluation of Alternatives
Phase 4: Purchase
Phase 5: Post-Purchase Evaluation
Consumers Go Through Five Stages in the Decision Making Process

Phase 1: Recognition and Awareness
Consumer recognizes a need by internal or external stimuli
Need recognized in following 3 ways
Advertisement or Conversation with friend that causes an awareness of a need
Consultative Selling – Seller Has Ability to Uncover Need
Consumer Evaluation of current situation – causes consumer to detect are of dissatisfaction.

How Do You Influence Phase 1?
You as a marketer can cater your message to a potential need.
Example: Pizza shop that advertises late delivery using commercial advertisement that airs at 11 p.m.
Commercial triggers awareness of a need – I’m HUNGRY!

Phase 2: Search for Information
Consumers begins information search – looking for what will fulfill the need they identified in Phase 1.
Important Note: Anxious buyers may skip this phase – we call this impulsive buying.
Amount of research DEPENDS on strength of need and the drive it creates.

Two Levels of Search Understanding the Search Level Helps You Serve the Customer Better
Heightened attention – Consumer is open to receiving information. They go online, look through magazines, read advertisements to gain information they need to make purchasing decision.
Active Information Search – Consumers need is more intense – they really invest in the search process. You’ll find them reading material and asking friends for their option.

Identify the information sources that are most important and influential to your potential buyer and then make sure your information is available there.
Example: If your potential buyer is an internet users, will they find you when they search?

Phase 3: Evaluate the Alternatives
Consumer is processing information and arrives at a decision. That decision comes from evaluating, identifying and assessing the value of the alternatives.
They will often evaluate on:
*Color *Price *Status *Durability *Quality *Safety *Options *Style *Warranty

Two Types of Purchases Consumers Make
High-Involvement Purchase – Typically high expenditure or a purchase that involves a great deal of personal risk.
Low Involvement Purchase – This type of purchase includes products or services that often involve a lower expenditure and less personal risk – such as buying a soda, choosing a hair shampoo or deciding whether to have beef or chicken for dinner.
*

Where Does Your Product or Service Fit?
High Involvement Purchase
Low Involvement Purchase

High Involvement Purchases
High-Involvement Purchase –
High Expenditure
Involves Great Deal of Personal Risk
Understand Your Customer
Consumer goes through an in-depth evaluation process.
Lots of attention goes into Phase 2 – the research phase.
Decision will be based on value and they will weigh several equivalent products and make their decision based on their individual criteria.

Low Involvement Purchases
Low Involvement Purchase-
Lower expenditure.
Less Personal Risk
Understand Your Customer
Consumer is concerned less with value.
More interested in convenience
Purchase requires a simple evaluation process.

How Do You Influence Phase 3? (High Involvement Purchase)
High involvement purchase - provide your consumer with information that reaffirms the positive consequences of buying. Stress important features of your product and the advantages compared to your competitors. Your consumer must see VALUE !

How Do Influence Phase 3? (Low Involvement Purchase)
Low involvement purchase – You can generally provide LESS information and still move the consumer past evaluation. These purchases are often made on IMPULSE!

Understanding Why Customers Stall in a Purchase
If a customer stalls in the purchase it typically means they are lacking the information they need to make a decision .
If providing additional information doesn’t help, ask them “what information do you need to make a decision today?”

Phase 4: Purchase
Your consumer is ready to purchase now they ask themselves the following questions:
Who will I buy from?
When will I buy?

Who Will I Buy From?
The consumer considers 3 things when determining who to buy from:
Term of the sale
Past experience from the seller
Return policy

Where Will I Buy?
A consumer evaluates the following when it comes to determining where they will buy:
Store atmosphere
Presence of time pressure
Specials or sales on products or services
Pleasantness of the overall shopping experience

Who and When is vital when it comes to the purchasing decision. The more you help the consumer, the better off you are.
A consumer must be satisfied with your service, experience and shopping atmosphere. If not, they can and often will delay the purchase.
Put yourself in check:
Make sure the store atmosphere and the shopping experience is what your customer is looking for.
Save the customer time – be clear upfront with term of sales and return policy.
Have a sale – Sales promotions and specials are effective when trying to keep an existing customer and gain new consumers.
Pay attention to customer service – there is no excuse for bad service.

Phase 5 – Post Purchase Evaluation
Just because the purchase is complete your job is not. The end of the sales isn’t always the en of the buying process – in fact it could be the beginning of another sale if you follow the process through to completion and satisfaction.
Post purchase evaluations fall into one of the following 3 categories:
Outcome 1: Purchase is below expectation
Outcome 2: Purchase matches expectation
Outcome 3: Purchase exceeds expectation

Outcome 1: Purchase is Below Expectation
Chances are this customer is coming back to ask for a refund or an exchange.
They’ve evaluated the purchase and they are NOT happy.
The customer will expect you to make the situation right.
Unless you make it right – he’s never recommending you!

Outcome 2: Purchase Matches Expectation
Purchase matches customers expectation.
You probably won’t hear from the customer. You will only hear from them if they begin to doubt the ability to afford the purchase or they begin to feel as if they didn’t gain value through the pricing or the term of sale.

Outcome 3: Purchase Exceeds Expectation
If you achieve this outcome – you’ve reached what all business hope to reach – you’ve exceeded all expectations.
Chances are you will not hear from the customer (except for repeat business) are slim to none.
Your customer feels that they have received value from the purchase and that you provided top-notch service.
Customer will likely be a repeat customer and send you new buyers your way with word-of-mouth marketing.

By understanding post-purchase behavior you have can understand the influence and the likelihood of whether a buyer will repurchase your product.
Satisfied customers can become unpaid ambassadors for your business – so customer satisfaction should be first on your priority list.
Avoid dissatisfaction before and during the sale. Be sure to follow up after the sale and handle any dissatisfaction.
Consider conducting a post purchase evaluation by
Using customer satisfaction surveys
Making follow-up phone calls
Mailing cards or letters
Sending email follow-ups

Knowing and Understanding the Five Stages in the Consumer Decision Making Process and…. the Influence You Have in Each Stage Increases Your Chances of Converting that Consumer to a Customer

Why Consumers Buy What They Buy

by mrktpro on Mar 16, 2010

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