Consumers now have easy access to extensive amounts of information to be better informed, influencing their buying decisions. Once a consumer has become a prospect, a marketer’s goal is to assist them through the sales cycle so the prospect can actually make the decision to purchase the product or service.
Traditionally, many companies envisioned consumers as price-sensitive and, therefore, would focus their marketing and sales strategies mostly on prices. However, consumers are much smarter and more complex now more than ever, and consequently, companies have had to transform their marketing efforts to meet the ever-changing consumer trends. Today, so many factors affect the buying process, which is really startling. To better understand consumers, it is important for companies to take into account the psychology behind the consumer decision-making process to architect more effective lead management and sales acceleration strategies.
Theories of choice
Standard economic theory is based on the assumption that individuals make prudent and logical decisions that provide them with the greatest benefit or satisfaction, or decisions that are in their highest self-interest. Sometimes this is referred to as a rational choice theory. [investopedia] This approach generally involves creating an incentive structure to influence consumer decisions and choices. In today’s complex world, with information flowing from different channels, the purchase decision is influenced by a plethora of factors.
Consumers are often observed to make choices and decisions that are not necessarily rational but may be influenced by cognitive bias, the order of product presentation, the framing of incentives, default options, fatigue, and many other variables. This approach is often referred to as behavioral economics. [beworks]
Differing stimuli often influence the customers’ behaviors in the marketing eco-space, and in all this noise, the single most important factor influencing the purchase decision is the decision simplicity. The main components of decision simplicity are trust, ease of navigation, and the weighing options to choose between alternatives. Trust not only refers to the trustworthiness of a brand but also how far the information gathered can be trusted is also an important criterion that influences the purchase decision. Ease of navigation refers to how efficiently a consumer is guided towards the desired information sources that aid the purchase process. The third component is weighing the options, and marketers who plan the purchase path of the consumers making the purchase decision of the consumers easy will be able to make their customers stick with them.
Too much information
Many companies approach prospects with a strategy of “more is better,” increasing their messaging, hoping that the influx of information and the frequency of interaction will convert the prospect into a customer or solidify customer retention. This strategy may be ill-conceived because it creates so much noise that consumers are driven away rather than drawn toward a company’s products or services.
In the New York Times, John Tierney reported on “Decision Fatigue,” which he describes as the mental exhaustion from making decisions and processing choices. Decision fatigue can wear people down, causing them to make impulsive decisions without carefully thinking through consequences, or it can cause them to do nothing due to the energy needed to weigh options.
In his article, Tierney cited an experiment where customers at a German car dealership had to choose from a myriad of car options for the sedans they were purchasing. The consumers would carefully weigh choices initially, but when they became fatigued from the decision-making process, they would settle for the default options – the path of least resistance. The researchers found that if they adjusted the order, so those difficult option categories were presented early in the process, the customers then settled for different choices as fatigue set in. When they presented the options in this different order, the customers ended up paying more for expensive cars.
Simplicity for “Stickiness” in consumer decision making process
A 2012 Harvard Business Review article studied what makes consumers “sticky” or how likely a prospect was to follow through with a purchase decision making, to buy the product again and recommend the product to others. The study was based on extensive surveys and interviews and found that the single biggest factor influencing consumer stickiness was, by far, “decision simplicity”—the ease with which consumers can gather trustworthy information about a product and confidently and efficiently weigh their purchase options.
The easier a prospect can move through the process to a purchase decision for a brand, the higher its decision-simplicity score. Comparing brands with scores in the top quarter and those in the bottom quarter, consumers were 86% more likely to purchase brands they were considering, 9% more likely to repurchase those brands, and 115% more likely to recommend those brands to others.
In today’s environment, with consumers having access to and being inundated with so much information, it is crucial for a seller to nurture leads in three fundamental ways effectively: (1) by aiding navigation; (2) by building trust, and (3) by simplifying options. Sales acceleration data science and analytics allow a seller to determine where the customer is in the sales cycle and what information the customer needs most to help in the purchase decision. The seller can then maintain consistent contact, with appropriate content, with appropriate frequency, and at appropriate times.