Understanding Customer Behavior During The Buying Process

  • Written By:
    Matt Callen
  • Published On:
    May 29th, 2019
  • Read Time:
    5 Mins
  • Category:

If you want to increase sales, understanding how potential customers think and behave during the buying process is essential. Once you know how a potential client thinks you’ll be able to position your products, services, and brand to appeal to them. This, in turn, can help you increase sales and satisfaction, and improve other metrics.

A lot of people have studied customer behavior over the years and a ton of literature has been written on the subject. When it comes to understanding the buying process, it helps to go back to the source. John Dewey first took a deep dive into the decision-making process all the way back in 1910.

Dewey expounded what many people in business already know: the buying process largely boils down to cost-benefit analysis. He took things much further, however, and outlined a five-step process that can help you understand how customers make decisions throughout their entire journey.

Let’s take a look at Dewey’s original five-step buying process and how customers behave at each step.

Recognizing the Problem or Want

The buying process is triggered when a potential customer realizes that he or she needs something. This can occur internally. For example, your stomach could rumble and suddenly you realize you’re very hungry. Or external stimuli could trigger an urge. Let’s say you walk by a bakery and the scent of fresh baked cookies triggers your sweet tooth.

How customers behave during this stage depends on their needs. If a person is extremely hungry, they’ll be more likely to pull the trigger quickly, settling for nearby food. If a person is planning a date, they may take time to do research.

Many marketers actively seek to trigger wants or needs. Ecommerce stores will frequently target users who are inputting certain keywords into search engines. For example, if you type “luxury watches” into a search engine, you’ll be presented with ads for luxury watchmakers and jewelers on the search results page.

Researching Solutions

Once a customer recognizes a need, they will start to look for solutions. Let’s take PayKickstart’s clients as an example. At some point, every one of our clients has realized that they need a checkout solution to process payments, make checkout easy, and perhaps lock up some extra sales through upselling.

Often, people first ask if they can solve the problem themselves. Our clients might first check to see if they can develop their own shopping cart. They’ll quickly find that a lot of work goes into building a shopping cart that’s secure and converts. Processing payments can also be difficult owing to security issues.

After realizing that building a shopping cart and processing payments is difficult, our future clients will begin to look for other solutions. They could pay developers to build their own solution, but that’s expensive. Another option is to buy an out-of-the-box shopping cart.

Customers that will go this route will find that there are many shopping cart solutions. Some will select the familiar brand or solution with the cheapest upfront cost. However, savvy customers will evaluate the various different solutions to find the one that works best in their given situation.

How Customers Evaluate Alternatives

Simply putting your business in front of customers often isn’t enough. Whether they are looking to buy food or software, potential purchasers will usually evaluate alternatives to determine which solution offers the most benefits at the most attractive price.

At this stage, customers hone in on the cost-benefit of each product. Their behavior is often influenced by how “big” the decision is. Someone buying a candy bar might just grab the candy with the most appealing wrapper. Someone looking to buy a luxury watch will probably compare each model, read reviews, and do research.

Since customers are focused on cost-benefit analysis, you have to hone in on the competitive advantages that will be most appealing to your customers. At PayKickstart, we focus on providing clients with tools that can increase sales and conversions while charging an affordable flat rate. Many of our competitors charge payment processing fees or else offer fewer features.

Having the lowest price doesn’t always work. In fact, sometimes it might hurt you. If you sell ultra-luxury watches online, a cheap price might cause shoppers to think you’re selling counterfeits or inferior watches. Instead of price, brand prestige, authenticity, insured shipping and the like may all be more important.

The Purchase Decision

Now it’s time for the customer to pull the trigger.  While the customer may have completed his or her own personal evaluation, the purchase could still be disrupted. For one, an outside party may interfere with negative feedback. If the would-be purchaser encounters negative feedback that they didn’t discover during the evaluation phase, they could decide not to complete the purchase.

Some customers will also simply have second thoughts. The evaluation process isn’t over until the payment is complete. Even then, customers will continue to evaluate their purchase and may decide to return it.

Further, outside circumstances could interfere with their ability to complete the purchase. What if the customer’s credit card is declined, for example? What if they simply can’t figure out how to use your ecommerce shopping cart? We’ve found that users will quickly give up, abandoning their cart, if it’s too complex or takes too long to fill out.

Ecommerce retailers can reduce the above risks by offering a simple, easy-to-use shopping cart that allows customers to quickly check out. Don’t bog customers down with multi-page shopping carts. The longer it takes for them to complete their order, the more likely they’ll have doubts or will be influenced by outside factors.

Also, make sure you offer multiple easy-to-use payment methods. This way, if the customer is having trouble with one method they can quickly switch to another.

Post Purchase Behavior

Great! The customer made the purchase! You’re done, right? Hardly. Once the customer has the product or service in hand, he or she will compare the product versus their expectations. This will influence their post purchase behavior.

If they are dissatisfied, they may ask for a refund or refuse to do business with you in the future. They could also leave bad reviews, discourage friends from shopping with you, and otherwise express displeasure. On the other hand, if they are satisfied, they may leave positive reviews and recommend your products.

For this reason, you need to make sure you deliver on the goods. If a retailer promises two-day shipping then they must make sure that they get the product to their doorstep in two days. If not, the customer could become upset.

Conclusion: Knowing Customer Behavior is Vital

Markets are competitive. If you don’t understand how customers think, you’re going to struggle to make sales. On the other hand, your best competitors will work hard to understand purchasers and their behavior during each stage of the buying process. If you want to compete, you need to do the same.

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Matt Callen

Matt Callen is co-founder of PayKickstart. He has founded several million dollar online businesses and lives in Indianapolis. Since 2006, he has helped hundreds of thousands of entrepreneurs scale and grow their online businesses with software and automation.

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