Consumer Decision-Making Process: Definition And 5 Stages

By Indeed Editorial Team

Published 8 August 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A consumer typically goes through five steps in the decision-making process before making a purchase. These five stages comprise what is popularly known as the consumer decision-making process. In a sales or marketing role, you can increase your chances of effectively promoting goods and services by being aware of these decision-making processes. In this article, we examine the decision-making processes of consumers and why it is beneficial to understand them, and outline five crucial steps that comprise this process, along with examples.

What Is The Consumer Decision-Making Process?

The consumer decision-making process outlines several steps a customer takes from acknowledging the need for a good or service to deciding if an end purchase meets those requirements and expectations. Learning how customers make decisions is crucial because it enables businesses to foresee user requirements and develop marketing or sales tactics based on those demands. Understanding how consumers make decisions has the following additional benefits:

  • Provides leverage against competition: Understanding consumer buying habits in an industry benefits marketers and sales professionals greatly. It enables professionals in these domains to develop unique sales and marketing initiatives that attract more consumers to purchase a company's products over a competitor's.

  • Provides customer base information: The customer decision-making process can serve as a framework for upcoming marketing initiatives, public relations efforts or product introductions. It motivates marketing and sales professionals to think about the initial demands of a consumer, the channels they may use to obtain items and the aspects they consider, like price, product design and quality.

  • Increases sales and expands customer base: You can enhance product sales and broaden a customer base by studying the decision-making process of patrons and identifying the best ways to communicate with them. Understanding how a typical customer addresses a need allows professionals to develop targeted marketing materials and distribution strategies.

  • Provides useful insights for marketers: Learning about decision-making processes in detail provides the advantage of educating marketers on what occurs after a consumer purchases a product or subscribes to a service. This is helpful for marketers because they can evaluate what customers require to be happy during the consumption and post-evaluation phases.

Related: What Is B2C? (With Types Of Business-To-Consumer Marketing)

What Are The 5 Stages Of Consumer Decision-Making Process?

The decision-making process of consumers typically has five stages. Understanding these stages helps marketers and sales professionals discover the factors that influence a consumer's purchase decisions. A customer:

1. Acknowledges a product or service need

In the first stage, consumers acknowledge their need for purchasing a product or service. They may decide to acquire a product to perform a task, advance their wellbeing, cheer up someone else, broaden their knowledge or for a combination of these reasons. This stage is crucial for marketers to target as it becomes easy to gain the trust of consumers after establishing a new or unique requirement.

Related: Buying Signals: What They Are And Why They Are Important

2. Researches product options

A customer may then investigate several product categories available in the market in the second stage of the decision-making process. After acknowledging their requirement for a product, consumers may want to identify the best available solution for their specific requirements. To assist in making a purchase decision, they may perform online research, watch advertisements, inspect items in person or consult with family and friends.

Related: The Difference Between Consumer Vs. Customer (With FAQs)

3. Compares products and services from different providers

When a customer discovers a product or a service that suits their needs, they often evaluate comparable products and services from various sellers based on cost and quality. Another aspect that customers may consider when choosing a retailer is availability. This is crucial if they require a product for an impending engagement at short notice. While making a final selection, customers may also consider aspects like industry trends and brand recognition.

Related: Product Based Vs. Service Based: What Is The Difference?

4. Chooses a product and makes a purchase

The fourth stage of the decision-making process involves customers choosing a product they can afford to buy. There are a wide variety of channels through which consumers can procure goods. They typically do this by discovering local retailers who sell a particular item and making in-person purchases or by making online purchases.

Related: Essential Retail Skills (With Steps To Improve Them)

5. Reflects on a purchase and decided whether to repurchase

After a consumer purchases a product and uses it, they can accurately determine whether it was worth the price and whether they want to make additional purchases from the same company. They may decide to leave a review on the product page or order more of the same product before it sells out. Many consumers rely on online user reviews and feedback to guide purchase decisions and marketers and customer support teams can impact purchase decisions at this stage of the decision-making process also.

Related: What Is Brand Switching? Reasons And Ways To Prevent It

Examples Of Decision-Making Processes

These are examples of various ways in which customers determine their needs and make purchase decisions:

Example 1

This is an example involving the purchase of a home appliance:

  • Stage one: Water seeps from Sophie's refrigerator and it continues to cut off unexpectedly. As a response, she decides that it is time to buy a new refrigerator.

  • Stage two: She visits various stores' websites to compare refrigerator models, including the one from where she bought her current refrigerator. Sophie enquires about her friends' refrigerators and she watches TV commercials for kitchen appliances.

  • Stage three: The first merchant she approaches provides a deal that is within Sophie's price range and a product that has a majority of the features she desires, but the reviews indicate that the refrigerator model may require regular repairs and may not last very long without proactive maintenance. The costs at a second store are a little bit more than what she wants to pay but the refrigerators have even more functions and excellent reviews.

  • Stage four: Sophie chooses to spend more money and purchase the product from the second merchant because she wants a refrigerator of the finest quality.

  • Stage five: Sophie evaluates that her new refrigerator has all the features she requires and is functioning well after using it for six months. She leaves a favourable online review for the retailer and plans to do business with them again in the future.

Example 2

This example outlines how a customer might choose to make a new purchase:

  • Stage one: John carried the same hiking bag for over five years before realising there were seams that had suffered from normal wear and tear. He knows his current backpack can not last much longer because he hikes regularly, so he thinks it is time to get a new one to carry his gear.

  • Stage two: He visits the website of the original merchant to search for an identical model, but he also visits a few other websites at the suggestion of his hiking companions. John also stops at a nearby physical store to browse backpack options.

  • Stage three: John determines he wants a brightly coloured pack with reflective gear and at least five compartments based on what he sees online and at the shop. John chooses against purchasing an overpriced backpack from one merchant since he is aware of his spending budget of ₹5000.

  • Stage four: John dismisses the remaining retailers in favour of one that has the type of hiking backpack he requires at a price he can afford. He buys the backpack from a physical store in his neighbourhood.

  • Stage five: John recommends the backpack to his friends and begins following the merchant on social media to receive updates on new hiking gear alternatives after using it on four treks.

Example 3

The following is an example of a customer decision-making process involved in the purchase of a fitness bracelet:

  • Stage one: Leo desires a healthy lifestyle and decides to exercise with his friends. The fitness bracelet that his friends use enables them to compete against one another to walk a particular amount of steps each day.

  • Stage two: He visits a retailer's website to view the many choices accessible to him. To find out what his friends enjoy and detest about their bracelets, he also talks to them.

  • Stage three: Using his research, he concludes that he can keep his spending under ₹10,000. Additionally, he requires a bracelet in a neutral hue that tracks his activity and is lightweight.

  • Stage four: He limits his search on the retailer's website to a certain model based on his requirements. To help make a choice, he checks ratings and colour selections and finally buys the model on the company's website.

  • Stage five: Leo still wears his fitness-tracking bracelet three months later and he likes how it informs him about his health and encourages him to participate in outdoor activities with his friends. He makes the decision to make future purchases from the same merchant.

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