How Purchase Decisions Are Made

Nigel HollisMay 25, 20216014 min

The chart shown above is an evolution of one that I helped create at Kantar. It is my attempt to summarize as clearly and simply as possible the process by which people choose between brands based on their intuitive and deliberative thinking. I would love to hear your thoughts about it, good, bad, or indifferent. But first, let me lay out my thinking behind the chart.

Two Modes Of Thinking

By now, everyone in marketing, advertising, and related disciplines, has probably read something about the two modes of thinking: intuitive and deliberative. The intuitive is fast, triggered in fractions of a second, before the conscious mind can figure out what is going on. Conscious deliberation, on the other hand, is often slow, difficult, and tiring. Often portrayed as separate systems (as above), this is just a convenience used to explain two inter-related modes of thinking.

To navigate our complex world quickly and effectively we use a set of heuristics, intuitive shortcuts that help us decide what to do in any situation. A need, occasion or mindset triggers the decision process, and we respond. Provided the context is familiar we respond automatically, no need to think about what to do. (Importantly, the context need not have been directly experienced before, it could just be similar to a familiar situation.) However, when the context is disrupted – our favorite brand is not available – or is unfamiliar – we have never bought the product category before – we must consciously think about what to choose.

The Intuitive Influences The Deliberative

Both types of thinking come into play when making decisions, but the balance shifts between them based on the strength of the intuitive response. When the intuitive response is strong, the conscious mind either goes along with the decision or uses that initial response as an anchor for further deliberation. So, a brand that is the obvious solution to a need – the most salient one – is likely to be chosen.

When the intuitive response is weak, the conscious mind steps up to figure things out, although it does not do any more work than it needs to in order to reach a final decision. Most likely its deliberation will draw on easily accessible facts, judgements, and feelings, or, in the age of search, simply type, “Best…” into Google and take it from there. Both modes will be drawn on during the search process, allowing people to reach a satisfactory solution as quickly as possible. Importantly, while shaped by the intuitive response, the deliberative mode can override that initial response, but it will require effort to do so.

Heuristics Are Learned

If I understand it correctly, heuristics are mental shortcuts based on experience and learned knowledge. Biases are systematic influences on our decision making, which could arise from a heuristic, or from the way our brains have evolved.

Why is this distinction important? Both heuristics and biases influence peoples’ purchase decisions, but I believe that the fundamental difference from the marketer’s viewpoint is that heuristics can be built up over time from direct and indirect learning. Brand users have direct experience of the brand. A potential user may come to learn of (and maybe desire) a brand through casual exposure: seeing others use it, reading online content and reviews, listening to the news, chatting with friends and, of course, noticing its advertising. Most indirect learning is likely to be passive; impressions are absorbed with little reflection.

Experience Confirms Or Denies Expectations

Obviously, the process does not stop at purchase. As noted above, usage brings direct experience of the brand. This is the acid test. Does the brand live up to the expectations created by prior exposure and claims encountered during the purchase process? Experience will add to and amend peoples’ impressions of the brand, hopefully for the better. Importantly, as experience continues, it is the highs and lows, and how people feel when the time comes to buy again, that will determine how predisposed people are to stick with the brand.

Initial Impressions Anchor Future Decisions

This framework does not necessarily change our understanding of the role of brand-building marketing activities, but it does explain why they are important and how they can influence future purchasing behavior. By creating a set of positive, motivating, and memorable impressions of the brand marketing activities create an anchor for future decision making, not just among current category buyers but among those that might buy the category in future. Well executed, these activities predispose people to choose the brand directly, or failing that, notice and more readily respond to its sales activation.

OK, that is my take on how people make purchase decisions. My reading makes me think that too many people are focused on using behavioral economics at the point of decision making and too few recognize the implications for longer-term brand growth, but what do you think? Please share your thoughts.

Contributed to Branding Strategy Insider by: Nigel Hollis, author of The Global Brand

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