How Consumers Really Make Purchase Decisions

Jip Inglis / Strategic Marketing Practice

Driving revenue today is all about persuading potential consumers to buy your product versus the competition. Central to success in this mission is the ability to understand how consumers make their purchase decisions, and what points of leverage you might have to influence the outcome.

It has been well documented by now that that the traditional purchase decision model, metaphorically represented by a funnel, is outdated and too limited.

There is any number of new models suggesting that this process is not linear, but rather circular with feedback loops based on usage experience providing inputs for future purchases.

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Figure 1 (left) represents McKinsey & Company’s model, which breaks the purchase process into three basic steps:

1) Creation of the Initial Consideration Set

2) Active Evaluation of the options

3) Closure of the sale at the Moment of Purchase

Using this as a construct, here are three truths to keep in mind about the purchase process.


1)      The Importance of Being in the Initial Consideration Set

Former major league baseball manager Whitey Herzog once remarked when asked about the importance of speed to baseball player, “It’s no guarantee of success, BUT, it’s a big asset!” A similar comment might be made about being in the initial consideration set for a purchase decision.

When consumers move into the active evaluation phase they typically will expand the number of brand/product options from their initial consideration set.  Research has shown, more specifically, that consumers are likely to expand their options by 50% to 60% in the evaluation phase versus the options that were initially in their consideration set.

In other words, if the consumer was initially considering three different brands for purchase they will likely to expand the universe to five options that they actively evaluate.

That said being in the initial consideration set has been shown to confer a considerable advantage.  Consumers are up to three times more likely to purchase brands that were in their initial consideration set versus brands that were not. This suggests that brand awareness does, indeed, matter.

2)      Touchpoints Effectiveness Changes by Purchase Decision Phase

The importance and effectiveness of different touchpoints changes as consumers move through the decision process. Traditional, marketer driven “push” messaging is most effective early on to create awareness and ensure a brand is included the initial consideration set.

As consumers move to the active valuation phase, however, this changes.  In the evaluation phase consumer-driven marketing such as online research and work of mouth, i.e., “pull” activities, becomes most important.

When they are evaluating various purchase options consumers are taking control and setting the agenda for the amount and type of information they want to narrow their choices.  Certainly the internet and the proliferation of social media and mobile devices has given new power to consumers and enabled them to expand the scope of information they can access the help in the decision process.

Not surprisingly, when it comes to closing the sale at the point of purchase it’s the interactions that consumers have at the store and/or with sales representatives that are the most influential (figure 2).

The takeaway is that winning the purchase decision war requires that brands must master consumer interactions across a wide spectrum of touchpoints – push and pull; traditional and digital, out-of-store and in-store.

3)      Winning At The Point Of Purchase Is Critical In Business

One consequence of the new world of marketing complexity is that more consumers hold off their final purchase decision until they’re in a store.  Multiple studies have re-affirmed that about half of all purchase decisions are made once the consumer gets physically in the store.

Further, consumers will often change a brand decision in-store from what their initial purchase intentions may have been because of influences that take place in the store.  GFK found that while 25% of consumers intended to buy a particular flat screen TV brand when they entered the store, only 13% ended up actually purchasing that brand.

McKinsey learned that up to 40% of consumers change their minds about what brand to buy because of something they see, learn, or do in-store.  The bottom line is that the effects, of packaging, product placement, fixturing, and POP signage/communications should not be ignored.

Aligning Your In-Store Presence to Your Marketing Efforts

If you are not sure if your in-store presence aligns with your overall brand personality, you are not alone. Many brands today realize they lose control of the shopper once they enter the store.

If your company or brand could use some strategic help improving its in-store presence and driving greater shopper engagement contact us at Our team of shopper marketing experts has experience on both the retail and supplier side of the in store equation and can help you maximize your retail opportunity.

Don’t take your retail opportunity lightly…get some qualified, high impact strategic help today!