How Your Customers Decide To Buy
Part 2 of 2

In part one of this tutorial, we discussed how consumers identify their need or desire to purchase a product and then how they gather the information necessary to reach a purchase decision.

The second half of the “path to purchase” outlines their purchase decision as well as their post-purchase behavior that determines customer retention and social marketing activity.

Step 4: The Purchase Decision

Just because a consumer has reached a brand decision doesn’t mean he or she is ready to make the purchase. There are still two more decisions to be made:

Buying Location:
In some cases, this decision is easy because the buying location is the same place in which the purchase decision was made. This scenario is most likely to occur with impulse items or regularly purchased items (such as toothpaste).

In other cases, the consumer makes his or her buying decision from home or at work. The decision of where to buy is most often influenced by convenient location, satisfaction with past experiences, brand loyalty, current sales promotions, return policy, etc.

In less frequent cases, the consumer doesn’t have a choice in where to make their purchase. A particular retailer may have exclusive selling rights to the brand in question.

When To Buy:
As with choosing a buying location, deciding when to buy is quite easy when making frequent purchases or when buying impulse items. However, more complex purchases, such as buying a home, booking a vacation or painting your house, tend to require more thought and planning.

As a marketer, you must understand the “gap” between deciding which brand to buy and actually making the purchase. You must have a firm grasp of what events transpire within this gap so that you can facilitate consumers to the final stage of the path to purchase.

By doing nothing to bridge this gap, a certain percentage of consumers will abandon you before making a purchase. While some aspects of purchase abandonment are beyond your control, there are some preventative measures you can take. Some examples include:

•  Ensure product availability at the time of purchase.
•  Improve the retail shopping experience to remove barriers to making a purchase.
•  Simplify the buying process for the consumer.
•  Send "product tidbits" to maintain consumer excitement until the time of purchase.
•  Offer credit terms to shorten the purchase cycle.
•  Use customer testimonials to reduce the perceived risk of purchase.

Step 5: Post-Purchase Behavior

Sadly, too many companies are satisfied to simply acquire the sale. They don’t put enough thought and effort into what happens post-purchase. To accurately depict the importance of this stage of the path to purchase, we take a slightly different perspective.

Of the 3 ways to make money in business, increasing revenue from your existing customers is the easiest and most profitable. Without repeat business from your existing customers, you are forced to continuously “refill the hopper” with new customers, which is a very costly and lengthy process.

This final stage of the path to purchase provides brands with the opportunity to influence future purchases. Here are a few insights about how consumers form their intention to re-purchase:

•  Did my experience with the item meet my expectations?
•  How satisfied was I with my purchase experience?
•  What does my social circle say about my purchase decision?

In addition to influencing their likelihood to re-purchase, marketers can also influence the purchase behavior of others. Here are a few social networking tactics that marketers can use their existing customers to convert new business:

•  Capture product reviews – Product information from a consumer’s perspective
    provides others with a more helpful view of your brand’s features and benefits.
    Also, customer testimonials are a great way of influencing a sale. Finally, product
    reviews will improve your search engine search results.

•  Create some buzz – Getting your customers to talk to friends and family talk
    about their purchases (in positive ways) has wonderful benefits but can be difficult
    to measure. Using Facebook, Twitter, etc. to facilitate this process has certainly
    helped brands to spread the gospel.

•  Reinforce the buying decision – With some items – usually more expensive ones –
    customers may feel a sense of anxiety about whether or not they made the right
    decision. Marketers should reach out to their customers to relieve this tension and
    reinforce their purchase.

•  Follow-up surveys – This tactic can provide brands with detailed insight into the use
    and satisfaction of their products. If properly designed, a company should be able
    to determine which brand attributes are driving satisfaction, loyalty and revenue.

Why Customers Leave

The average brand sees 25% of its customers defect to the competition. However, customers typically don’t defect to your competitors overnight. It occurs gradually, over a period of time. We call this the process of Customer Drift™.

While most companies acknowledge that customer retention is an issue, very few make the investment to stop Customer Drift™. Think about all of your customers as being at various stages within the Customer Drift™ process. How many are at high risk of abandoning you? How many are at medium risk? What are the primary causes of Customer Drift™?

These are topics that companies must investigate if they want to increase revenue by increasing customer retention. Learn more about how BehaviorWorx can help you find the answers.

In Closing

Please contact us if you would like to discuss this tutorial or any other aspect of customer strategy.

Receive email alerts when new content is added. No salesperson will call you – this is a free marketing information service.