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Understanding Purchasing Decisions and the Role of the Internet
What Companies Consider
Companies spend huge amounts of funds and resources in marketing. Often the communication is one-dimensional - the marketing efforts take into consideration what the companies wish to convey, but does not recognize what inputs consumers require to actually make the purchase. With the growing popularity of the Internet, marketers have learned to take into account feedback from customers - from chatter on social media and questions on product-rating sites, says an article published by McKinsey & Company. However, this is a reactive approach, rather than a proactive one.
Recognizing the True Scope of Marketing
Like most business activities, marketing is a cycle. However, most companies take a linear approach. Marketing should begin with assumptions related to buying decisions and should end with efforts directed towards gaining an understanding of what influences buying decisions. This is particularly important when the product or service being offered satisfies a unique need or is expensive. Such offerings are not procured on a whim.
Internet Assists Buying Decisions
Whether a product is purchased online or in a brick-and-mortar store, people search for information online to help them make a buying decision. More than 61% of global Internet users research products online, according to Interconnected World: Shopping and Personal Finance. Several surveys across the globe, especially those focused on the US and Canada, indicate that the Internet has become a more powerful influencer in purchasing decisions than family and friends.
Influencers in Buying Decisions
There are mainly four stages of purchasing decision making - Need identification, searching for information, comparing alternate solutions and taking the decision. There are several factors that influence the stage of making the purchasing decision, according to an article by The Consumer Factor.
These could be:
- Ratings and Review by Other Users
- Inputs from Family and Friends
- Overall Shopping Experience
- Discounts Currently Offered
- Terms of Purchase, Payment or Return
Customers will go through a few stages of weighing their need for the offering, learning about all the available options, narrowing down their choices and then making a selection, says a report by the International Journal of Business and Behavioral Sciences. At every step on this journey, a company is at risk of losing a potential customer.
How Consumers Make Purchasing Decisions
Internet Assists Marketers in Understanding Purchasing Decisions
"Marketers need to maximize their online channels to make it easy for consumers to interact with and access information about their brands,” says Dave Senay, Fleishman-Hillard President and CEO.
While a great deal has been written about attracting visitors to a website or an online marketplace, there is little emphasis on identifying the exit gates or the sections that face the highest risk of losing a potential customer. There are several tools like Google Analytics that exhibit the full customer picture, tracing a visitor's journey across advertisements, videos, websites and social platforms. These offer data on the journey of a customer and help identify the weakest sections or the exit gates.