The 5 Stages of the Customer Decision Process: Explained

The 5 Stages of the Customer Decision Process: Explained

When developing your marketing plan, one of the first challenges you need to overcome is understanding how to structure your communication strategy. 

On the one hand, 

  • You don’t want to be too sales-oriented when your customers are just “browsing” your store, or online store, for the first time. They have low purchase intent, and a strong sales push could make them “bounce”.

On the other hand, 

  • You also don’t want to miss the opportunity to make a sale with the right offer or promotion when the opportunity arises. In terms of conversion rates, a good “trigger” could ignite your user’s intent to buy.

In order to understand what type of communication format and message to devise for your customers, you can use a simple but highly effective marketing model: the purchase decision process.

The model we’re going to discuss in this post was developed by Kotler, one of the most influential thinkers in marketing,  and proves very helpful to explain the stages 5 consumers go through when they make a purchase. 

These 5 stages help us answer an essential question: “how does a customer approach a purchase decision?” 

In this post, we’re going to talk all about it. 

With no further ado, let’s delve into the topic.

#1 Problem Recognition

The first step in their journey is what we call “problem recognition”. At this stage, customers are “started in a journey” as they acknowledge they have a problem to solve.

This is an essential insight. Customers are not starting a purchase “journey” because they feel they are missing an item or a physical product or service. 

Customers acknowledge that they are experiencing an issue, and in order to solve it, they will be spending their money. 

As a result, it is essential that your company identifies the types of problems that it is able to solve for its customers. Nobody cares about your products, everyone cares about the solutions you bring to the market.

Unless you’re selling solutions, you are going to have a really hard time marketing your products. 

The problem recognition stage relates to customer segmentation, as companies will usually only go after a particular type of problem, only affecting a particular type of person. 

Choosing what problems to solve, and matching them with the customer types who are most likely to experience them, is the starting point of any marketing analysis. 

In the business model canvas, we see this being echoed by the “value proposition” and “customer segments” tabs. As you start your business, identifying what solution you’re offering and who will be interested in purchasing it is essential to a profitable venture.

  • But why can’t we just go after “every customer”? 

The fact is that we are not in a mass-market context anymore. 

Companies use a marketing approach called “Inbound marketing” that is designed to avoid expensive and noisy mass markets by seeding a company’s brand so that it can be found by its ideal customer – as they explore possible solutions to their everyday problems.

  • How does a brand get found according to this model? 

Well because a customer, once a problem has been acknowledged goes onto search engines and starts figuring out how to solve it. This is why the next stage is information search.

Customer Segmentation in the Fashio... x
Customer Segmentation in the Fashion Industry

#2 Information Search

As the volume of information on the internet is too large for us to process, we rely on search engines to do refine what we are looking for and understand what we need.

Information search is a stage that can last a varying amount of time. If the problem is small, we don’t have to spend too much time researching it. 

If you’re looking for a restaurant for a simple pizza night, a few minutes can be enough. But what if you were looking for a restaurant to celebrate your anniversary? Well, in this case, you may actually invest much more time in finding the right location. 

At this stage, a brand will want to develop a media presence capable of connecting the customer’s search intent with its products and services, making the business relevant for those searches that identify the right customer target.

In this stage, customers are still in low-purchase intent and as a result, any sales-focused communication can be limited in its effectiveness. 

This is because at this stage, customers have not yet understood the nature of the problem, and it may be too soon for them to know what type of solution is the best fit for them. 

Only once a customer feels he\she is sufficiently informed on the topic, a stronger purchase intent will arise. 

The thing is that, during the process of information collection, a variety of possible solutions may have arisen. That’s why the next step in the purchase decision journey is the evaluation of alternatives.

#3 Evaluation of Alternatives

In actual fact, “information search” stages are completed more than once. 

Whenever we come to a possible conclusion to our information collection, we can start the process again to see how many options are available for us. 

Only when we feel we’ve exhausted all possible research avenues, we then pick the ones we like on the grounds of our personal convenience. 

As we’re learning about ways in which a problem can be solved, we can see how possible solutions come from very different industries. 

Let’s say for instance that you are stressed out from work. 

A solution is to take sleep medication to rest better, another solution is going to a human resource agency and finding a new job, another solution is to contact a travel agent and go on a holiday.

All of these products and services are viable solutions to the issues experienced by the customer, but each comes with a variety of pros and cons, issues and benefits that make them different. 

This is where a company will try and push a more sales-focused communication as the intent of a marketing campaign – in this stage of the journey –  is to highlight all of the benefits that your solution provides while downplaying all of the limitations. 

At this stage,  the purchase intent is very high, and it can be worth trying to trigger a customer’s purchase desire with a promotional offer, that usually takes the form of a call to action. In other words, this is where advertising is the most effective.

What happens next is that a customer will make a decision to buy, but may still need to decide where to buy it. This is what the next stage is about. 

#4 Purchase Decision

The purchase decision is the stage where customers actually purchase the “solution” which best fits their needs.

Even if for all other stages, the online dimension of marketing provides great advantages and opportunities, in this stage, some specific challenges arise.

When it comes to a purchase decision or the “transaction stage” of the journey, it is helpful to remember that this moment is influenced by factors that can induce people to wait if the transaction happens online.

The fact is that online shops are always open, and as a result, so much of the promotional communication done on the internet is connected to fighting this sense of continuous availability that the internet provides by creating a sense of contingency and opportunity. 

This is why we have so many promotional efforts with set deadlines to ignite customers’ desire.

Great, now the customer has made a purchase, but is this the end of the purchase journey?

Actually not. The purchase decision is what we call the “First Moment of Truth”, when brands are testing the effectiveness of their marketing strategy against their customers.

Customers, however, will make a purchase, and will then be able to test a product on their own terms and see whether it solves the issue they were looking to address in the first place.

This is why the final stage in their journey is the post-purchase stage.

#5 Post Purchase Behaviour

This is the stage that accounts for customer support, and post-purchase customer management, which involves dealing with customer satisfaction or even managing returns.

In the last stage of their customer journey, your clients will have tested the “solution” they have acquired and will be able to see if it was able to deliver on its promises. 

If you’d like to make sure that your one-time buyers become regular, retained customers, then it is in your own interest to keep them happy by providing post-purchase services to overcome an issue or to help them become loyal, returning clients.

By focusing on your post-purchase behavior you are also going to be able to learn more about how users experience the product. 

By diving into this data you may be able to find some useful information on how to better market your products in the first place.

Great, now that we’ve explored all 5 stages it’s time to draw a few conclusive remarks.

Conclusions

There you have it! In this post, we’ve explored how you can better connect to your prospective customers by understanding their purchase-decision process. 

In digital marketing, we often build upon this 5-step process and use the customer journey model to make sure we’re able to communicate effectively with customers by understanding where they are at in terms of making a decision to buy. 
If you’d like to learn more about the topic, here’s a book we recommend reading that dive into the topic in much greater depth: Ask, Measure, Learn: Using Social Media Analytics to Understand and Influence Customer Behavior.

Moreover, if you’d like to learn more about the challenges of connecting your product to the right customer journey, don’t hesitate to explore our blog, where we’re sharing a wealth of information on the subject. Enjoy!

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The 5 Stages of the Customer Decision Process: Explained In this post, we're looking at ways in which you can communicate your marketing messages more effectively by understanding your customer's purchase decision process.
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