Improve Your Canadian Marketing by Understanding Your Buyer Decision Process
In this article I provide a short summary of what the “buyer decision process” is in general and why it is important for service-based organizations, even energy providers, to understand how clients decide to purchase their services. Your organization may be spending money on marketing that reaches your clients at the wrong stage of their buyer decision process and therefore the marketing does not have the intended effect on your clients.
What is the buyer decision process?
The buyer decision process, often referred to as the marketing funnel when considering marketing strategy, is the decision making processes undertaken by buyers before, during, and after the purchase of a product or service. Traditionally the process has been described as a 5-stage or 6-stage linear model with the following stages:
- Problem Recognition – The buyer recognizes the problem they are faced with and that they require a solution.
- Information Search – The buyer searches internally (memory) and externally (available sources) for a set of possible solutions.
- Evaluation of Alternatives – Based on conscious (rational) and subconscious (emotional) criteria, the buyer evaluates the possible solutions they found when searching for information.
- Purchase Decision – The buyer makes a decision regarding what, where, when and how to buy.
- Purchase – Often collapsed into the “Purchase Decision” stage, the transaction between the buyer and the seller is complete.
- Post-Purchase Evaluation – The buyer reflects on their purchase decision and may experience post-purchase cognitive dissonance.
Has the buyer decision process changed?
Over the past decade there have been fundamental changes in the relationship between sellers and buyers due to the rapidly growing number of channels available for communication and purchases (e.g. social media and Smartphones). Well-known attempts to recreate the universal buyer decision process model include McKinsey’s Consumer Decision Journey model in 2009 and Google’s Zero Moment of Truth (ZMOT) model in 2011. Both models take the linear buyer decision process model and turn it into a multi-channel cyclical model, which includes the two-way conversations between sellers and buyers (word-of-mouth) and focuses more on the moments of maximum buyer influence.
Why is it important to understand your specific buyer decision process?
Even monopolies, oligopolies and government organizations should make the investment to better understand their buyer decision process as there are great benefits for marketing purposes. For example, the Ontario Power Authority might want to influence its clients to enroll in the peaksaver PLUS program for better management of electricity use. Without understanding the point at which clients are most likely to be influenced regarding their electricity consumption, marketing efforts to improve enrollment in the OPA’s peaksaver PLUS program will provide poor Return on Marketing Investment (ROMI).
How can you better understand your specific buyer decision process?
Market research companies like Abacus Data, use a strategic research solution called “buyer decision process analysis” to help their clients make more effective marketing decisions that will improve conversion. Based on the available research budget and timelines, this solution can include the following project stages:
- Stakeholder Discussions – Explore internal stakeholders’ experience and understanding of the problem to inform the next stages of research and to pursue alignment regarding specific project outcomes.
- Market Environment Scan – Examine all available information related to the problem for a stronger understanding of the market environment, competitive offerings and market opportunities.
- Sales and/or Database Analysis – Uncover behavioural insights, such as customer loyalty segments, through advanced analytics using existing data.
- Qualitative Exploration – May include shop-alongs and/or focus groups for a first-hand view of everything involved in the specific buyer decision process, including the more nuanced and emotional aspects. A concept of the client-specific buyer decision process is developed at this point, which informs the quantitative stage of research.
- Quantitative Understanding – One or more customer surveys to validate the buyer decision process and provide more detailed customer segment profiles (demographic and psychographic) for targeting and market projections.
- Strategic Implementation – Inform and collaborate on strategic concepts incorporating the research findings and achieve a unified understanding among stakeholders.
For more information about buyer decision process analysis please contact Sean Copeland, Director of Consumer Research at Abacus Data.