A History of Consumer Decision-Making
The Marketing Funnel, a model developed in 1898 by E. St. Elmo Lewis, outlines the path that consumers embark on when purchasing a product or service. Otherwise known as the Purchase Funnel or Sales Funnel, it consists of four linear stages: Awareness, Interest, Desire, and Action. Consumers exhibit different behaviors at each stage of the Marketing Funnel; by recognizing the behaviors, marketers and advertisers can identify the stage the consumer is in and focus their efforts on driving consumers down the funnel towards purchase.
In 2009, McKinsey created a new model to explain consumer behavior: The Consumer Decision Journey. McKinsey's journey delved deeper into consumer behavior; its four main stages reflected that depth: Initial Consideration, Active Evaluation, Moment of Purchase, and Post-Purchase Experience. In addition, McKinsey's journey extended further into the lifecycle of consumer purchasing to include a Loyalty Loop (which describes consumers’ repeat-purchase decisions).
Problems and Opportunities with Previous Approaches
Although both McKinsey’s Journey and the Marketing Funnel models remain relevant, neither model was able to capture the full spectrum of activities involved in a modern purchase decision, along with the detail and specificity of consumer purchase behavior. At the time of their respective conceptions, the models could not include key developments that directly impact consumers, such as:
Expansive Channel Opportunity: Over the last few decades there has been an explosion in the ways that the Consumer Decision-Making Journey can be influenced. An influx of new channels (such as ecommerce, digital media, online video, email, organic search, paid search, experiential marketing, social media, etc.) has created new consumer expectations and new opportunities for marketers and advertisers.
Multiple Engagement Positions: Modern consumers can enter and engage in the decision-making journey at numerous stages, not only at the “Awareness” level at the top of the marketing funnel. Modern consumers can (and often will) enter further along the journey based on any number of decision-making influences.
Non-Linear and Interconnected: The Decision-Making Journey is no longer linear; modern consumers move back-and-forth between stages and may sometimes skip stages entirely to meet their needs. In the modern age, a single, interconnected click can move a consumer from awareness to purchase in a matter of seconds.
The Shift Towards Customer-Centricity: Consumers have more options available in both the physical world (mere miles away) and the digital world (mere clicks away). Because of this, the landscape of consumer purchasing behavior is shifting more towards customer-centricity, in which the customer is in full control: Customer-Centricity means putting the customer first at every step of the journey. In a customer-centric world, the journey customers take is up to them and can only be supported or influenced, not directed.
Customer-Experience Focus: Customer Experience is more than a single engagement; it is cumulative, based on all of the customers’ experiences and includes all pre-, mid-, and post-purchase activities. It encompasses everything people do, what they see, how they feel, where they’ve been, and where they’re going next. Every aspect of the journey plays a major role in the Customer Experience.
Modernization and Globalization: Driven by technological advances, the marketplace has shifted to provide people with increased choices, access, and availability. Modernization, globalization, and digitalization have made it ever-easier for consumers to explore, research, educate, and empower themselves throughout their decision-making journey. A perfect example of this is encapsulated in Zero Moment of Truth activities, where consumers turn to the internet to research, educate, and comparison shop before making a decision.
These shifts are some of the changes driving the enhanced and modernized decision-making journey. Advancements in technology, globalization, digital commerce, access to new media, and a customer-controlled marketplace, have rendered the days of a linear, disconnected consumer journey obsolete.
Modern consumers make decisions at their own pace, on their own time, on their own terms.
Today, consumers can use multiple means at any time to perform research and educate themselves. They can learn online, offline, in person, at live events, through friends and family, through digital reviews, word of mouth, social media, exploration, etc. The consumer mindset has shifted and adapted to the modern age, and so must the Decision-Making Journey.
The modern decision-making journey is less linear; it is multi-dimensional and thoroughly interconnected.
To successfully influence consumer decisions in the modern age, marketers and advertisers must fully understand their customers and support their unique journeys. By creating strategies and tactics to support each step of the Decision-Making Journey, marketers and advertisers will be able to influence the right person at the right time, in the right place, and at the right moment.
If you're not proactively supporting consumers along their decision-making journey, then you’re hindering your brand and actively helping your competitors.
Marketers, advertisers, brands, and businesses need to focus on the psychology and behavior behind each facet of the decision-making journey in order to engage with, influence, and empower consumers at each stage. Understanding the journey, the opportunities that exist within each stage, and how consumers interact at (and in between) each stage is crucial to success.
Examining the modern consumer Decision-Making Journey
The Consideration Set is a selection of goods, products, or services that customers consider as potential purchase options. Consideration Sets increase, decrease, fluctuate, or remain static in size throughout the journey as consumers assess, explore, discover, and compare their options.
Engagement Opportunities are points along the decision-making journey at which people can be influenced by information, advertising, marketing, communications, etc. In other words, Engagement Opportunities are points at which the activities of marketers, advertisers, and brand owners will have the most influence on consumer reception, perception, and engagement with information, media, and messaging.
By understanding where different consumers can be influenced along the journey, brand owners can use different strategies or tactics to support different audiences, personas, psychographics, and shopping activities. In addition, certain Engagement Opportunities can serve as acquisition points for competing brands, products or services.
The Consumer Decision-making journey
The Passive Exposure stage occurs while people are not actively shopping but are still absorbing information through everyday life and their exposure to brands, products, services, advertisements, media, or content.
The Active Exposure stage begins as people start to pay attention to their wants, needs, or desires and begin to actively engage with relevant information. At this stage, people begin to aggregate goods, products, or services that will eventually make up their initial Consideration Set.
The Initial Consideration stage occurs when consumers first place goods, products, or services in groups that meet their selection criteria based on their early perceptions and information.
During the Research and Discovery stage, people perform searches, uncover information, or educate themselves on purchase decisions. At this stage, consumers may use a multitude of sources or channels to educate and empower themselves, increasing their Consideration Set as they uncover new information.
The Active Evaluation stage begins as people evaluate, assess, add, or subtract goods, products, and services from their Consideration Sets, make substitutions and weigh competing products or services against each other. Consideration Sets are likely to fluctuate at this point as comparing and contrasting yields new criteria for deliberation.
The Final Consideration stage takes place when consumers slim down their Consideration Set to a few remaining selections or contenders and begin to move towards a final purchase decision.
In the Decision or Selection stage, a transaction is made: The consumer makes their decision, selection, or purchase. This stage is the tipping point for consumers’ entry into the post-purchase stage of their journey.
The Post-Evaluation stage occurs as consumers evaluate their experience with the goods, product, or service. Post-Evaluation helps consumers assess their current experience and builds the foundation of their next purchase decision.
In the Post-Engagement stage, consumers may share their experiences, perspectives, and attitudes with others. This sharing may include writing reviews online and influencing others via social media, or by providing direct feedback to the company or brand owner.
The Decision-Making Journey relies on active decision making, with a focus on cognitive and behavioral influence and engagement.
Retention and Defection Decisions
The Post-Evaluation and Post-Engagement stages bring consumers to a juncture at which they will decide whether or not to make the same purchase decision again – bringing them to the Retention Journey – or make a different purchase decision – which would take them to the Defection Journey.
The Retention Journey
A key objective for brands or services is to gain — and keep — customers and get them to enter the Retention Journey. Once post-purchase consumers have begun the Retention Journey, they will typically skip other stages that would allow them to research competitors or alternatives and instead return immediately to a brand, product, or service. The Retention Journey is an abbreviated form (or “short cycle”) of the Decision-Making Journey, focused on building relationships and establishing repeat purchases from consumers.
The Personal Experience stage occurs when consumers build perceptions and initial impressions based on their experience with the brand, product, or service.
In the Connection Creation stage, the brand, product, or service experience goes above and beyond a transactional purchase; the brand, product, or service begins to deliver intrinsic value and consumers feel connected to their purchase decision.
The Repeat Evaluation stage happens as consumers move through the retention journey, product usage, or brand and service experience. At this stage, consumers may consider their previous expectations and current engagement to evaluate their on-going experience.
In the Repeat Post-Engagement stage, consumers may share their experiences, perspectives, and attitudes with others; this is where active loyalists (defined later) are likely to advocate their purchase decision. Repeat Post-Engagement activities may include sharing reviews and influencing other consumers, both online and offline.
There are various strategies and tactics that can be employed to help keep consumers in the Retention Journey, such as loyalty programs, redeemable points programs, consumer status upgrades, or repeat purchase discounts.
The Retention Journey relies on habitual decision making, with a focus on repeat cognitive and behavioral actions, aimed at creating and sustaining loyalty.
The subscription journey
The Subscription Journey is another short-cycle or subset of the Retention Journey. The Subscription Journey occurs when consumers pay for the same product or service repeatedly. The Subscription Journey begins when consumers make repeat purchases on a frictionless, automated cycle in which purchases are made without attention or action from the consumer; consumers are essentially removed from other decision-making stages. The goal of the Subscription Journey is for the experience to become so ingrained in consumers that they become reliant on it and passively forego other options or alternatives.
The Subscription Journey is not new; examples include milk being delivered daily to your doorstep or having newspapers placed in your delivery box every morning. Some great, current examples include Amazon’s Subscribe & Save, Netflix, Blue Apron, Birchbox, BarkBox, Dollar Shave Club, and Spotify subscriptions.
The Subscription Journey relies on passive decision making, with a focus on consumer reliance and both cognitive and behavioral dependency.
The Defection Journey
When consumers are unsatisfied or unfulfilled with a brand, product, service, or experience, they may enter the Defection Journey, in which they turn to alternatives or substitutes that they were previously considering, or seek out completely new alternatives or substitutes. The Defection Journey can take consumers back into the decision-making process as early as the Active Exposure stage, or they may immediately launch back to Dynamic Evaluation (remembering to grab a competitor's product off the shelf next time, for example). The Defection Journey begins when consumers’ repeat behaviors are disrupted for any reason, taking them back into traditional decision-making stages.
Strategies and tactics can be employed to keep consumers from abandoning your goods, brand, product, or service and defecting to competitors. For example, marketers and brand owners can create Cost-Switching Barriers, which increase the cost or difficulty of switching from one product to another (a cancellation fee, for instance), or use Integrated Ecosystems – related products or solutions that only work well together – which makes a switch to a different brand problematical (for example, some services will not work when switching from an iPhone to an Android, just as Brita Water Filters may only fit Brita products).
The Defection Journey relies on a reactivated decision making process, driven by cognitive or behavioral interruption and evaluation.
Active and Passive, Loyalty and Opposition
Consumer reviews and sharing via word-of-mouth have been constant over time, but in the modern age the channels (or platforms) for sharing have been amplified due to social media and digital commerce. Referrals and reviews can serve as channels for acquiring or losing customers.
Amidst the Retention Journey and Defection Journey, there are two broad consumer segments: Consumer Loyalty (exhibited by people who are loyal to and pleased with the brand, product, or service — people who are likely to engage in repeat purchase activities) and Consumer Opposition (shown by people who are opposed to and disloyal to your brand, product, or service — a trait of people who are unlikely to engage in repeat purchases). Digging deeper into each trait, more sub-segments are unearthed: Active Loyalty, Passive Loyalty, Active Opposition, and Passive Opposition.
Loyalty Segments in the Retention Journey:
Consumers demonstrate Active Loyalty traits when they advocate on behalf of a brand or experience through positive word-of-mouth, reviews, or consumer referral programs. Active Loyalty consumers typically do not seek out alternative brands, products, or experiences, and commonly live within the Retention Journey or the Subscription Journey.
Passive Loyalty traits, by comparison, are shown when consumers stay in the Retention Journey only until they find an alternative; they are open to competitors and substitutes, and may be easily swayed by outside information or incentives. Passive Loyalty Consumers are likely to be influenced by external factors that may nudge them towards the Defection Journey.
Opposition Segments in the Defection Journey:
Active Opposition is the segment in which consumers/customers actively attempt to dissuade or disrupt other consumers from considering a product, brand, or service. People in the Active Opposition segment typically share negative experiences and negative word-of-mouth stories with others and may write negative online reviews.
Passive Opposition is the segment in which consumers who may not actively oppose the brand, product, service, or experience will quietly defect without sharing any information or explanation. These users are disinterested and disengaged and typically do not share defection feedback unless prompted (by feedback surveys, for example).
WHERE TO PLAY AND HOW TO WIN WITH THE MODERN CONSUMER DECISION-MAKING JOURNEY
The modern Consumer Journey is non-linear, multi-dimensional, and more interconnected than ever before. Consumers have more choices, information, and power than ever before. It’s of the utmost importance to align all elements of marketing, advertising, strategy, creative, and messaging to support every consumer along their journey. Below are some key themes to consider as you build strategies and tactics to support the modern consumer decision-making journey:
Know Your Consumers: Planning, journey mapping, research, segmentation, and persona-building can help reveal how consumers are shopping, what their preferences are, and how they’re likely to engage. Who are your consumers? What are they thinking, feeling, and doing? What are they trying to accomplish? What are their biggest pain points? What are their motivations? Understanding the answers to these questions unlocks the door to understanding consumer psychology, which plays a vital role in both mapping and guiding the decision journey. The more you know your customers, the better you can support their journey.
Know Their Journey: Understanding every stage and every aspect of the customer’s journey is crucial to creating an amazing customer experience. Where are your consumers coming from? What are they looking for? How are they looking for information? What are their potential next steps? This understanding creates a compelling competitive advantage in the marketplace; the more you understand the journey, the better the experience you can create.
Plan for Every Stage, Even if Not Every Consumer Will Visit Each: Not every consumer will have the same journey, so it is of the utmost importance to proactively plan for every stage that consumers might engage with. Ignoring stages, consumer segments, or personas can create friction along the journey, and any point of friction a consumer experiences can be an opportunity for a competitor.
Think and Plan Holistically: Consumers don’t think in touchpoints, they think about their entire experience. Since the consumer decision-making process is interconnected and dynamic, as marketers and advertisers we must ensure that we support a connected, seamless, and contextually-relevant experience across all stages and aspects.
Aim for Efficiency — Consolidate and Simplify: The fewer the stages, the easier the path; marketers and advertisers should try to consolidate, simplify, or eliminate stages along the journey. To get towards an ideal user/customer experience, we should aim for efficiency: Remove friction, speed bumps, and roadblocks and help guide consumers along their journey.
Remain Agile and Adaptive: A rigid strategy is seldom the best course of action. As the competition, marketplace, or consumers’ expectations change, it is crucial that your approach to each stage of the journey remains adaptable and flexible. For example, switching strategies from focusing on brand advertising to helping consumers gain a better understanding of the brand during the Active Evaluation phase may prove more impactful. Other situations may call for switching the focus of loyalty programs by focusing on active rather than passive loyalists.
Coordinate Marketing and Advertising Budgets to Support the Journey: Aligning all elements of marketing and advertising along the Consumer Journey enables us to reach consumers in the right place at the right time with the right message. Without full alignment, marketers and advertisers face two risks: They may waste time, money, and resources and their efforts to the customer base may be rendered ineffective.
The Modern Consumer
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“Try to understand the buyer’s journeys your customers take. Few people buy something the first time they visit a website. Instead, they make the decision slowly over time, often after many brand interactions. Marketing tactics, customer loyalty programs, pricing strategies, and more all play a large role in the buyer’s journey. The more you know about the how your customers discover your brand and make purchasing decisions, the better equipped you will be to execute on all other aspects of your business.”
- Casey Markee