The buying decision is at the end of the buyer decision process and refers to the decision to buy goods, services, in­ven­tions, companies or other things. The goal of a buying decision is usually to maximise benefits or sales. To un­der­stand how to plan marketing and business strategies, it is important to un­der­stand the types of buying decisions and the buyer decision process.

Defin­i­tion: Buying decision

Buying decisions related to buying behaviour are rational or emotional decisions made in­di­vidu­ally, col­lect­ively, formally, or in­form­ally. Buying decision can refer to the final moment in the decision-making process as well as the entire decision-making process from per­cep­tion to purchase. Buying decision is thus un­der­stood syn­onym­ously with buyer decision process.

What are the different types of buying decisions?

A buying decision can range from shopping in the su­per­mar­ket to online shops to buying companies or services. For this reason, we do not talk about the buying decision, but dis­tin­guish between several types of buying decisions. What all buying decision types have in common: There is an over­rid­ing goal for the purchase, which is usually utility or profit max­im­isa­tion. Buying decisions are also char­ac­ter­ised by the fact that a written, verbal or tacit purchase agreement is concluded between the parties involved and tangible or in­tan­gible goods are acquired in return for payment of the purchase price.

To develop one’s own sales strategies and to un­der­stand the buying behaviour of customers, a dis­tinc­tion must be made between the following buying decision types:

Extensive buying decision

An extensive, i.e. extended, buying decision is defined as a com­pre­hens­ive decision-making process. The rational and psy­cho­lo­gic­al processes and learning processes involved are deep, complex and an­ti­cip­at­ory. Buyers take their time in the buyer decision process, making com­par­is­ons, analyses and eval­u­ations to rule out risks and weigh up ad­vant­ages and dis­ad­vant­ages. In most cases, targeted tangible or in­tan­gible goods are char­ac­ter­ised by high prices and costs or involve po­ten­tially high risks. Examples are the purchase of companies, special equipment, real estate or cost-intensive tech­no­lo­gies and special machines.

Limited/Sim­pli­fied buying decision

The limited buying decision is also called a sim­pli­fied buying decision because the decision-making process is not char­ac­ter­ised by complex pre­lim­in­ary con­sid­er­a­tions or lengthy psy­cho­lo­gic­al processes. Buyers are usually familiar with the product or service category, have made a pre-selection or are guided by limited common criteria such as price level, material or awareness of brands and companies (e.g. when buying food, beverages, sanitary products or office supplies). The buyer decision process thus does not ne­ces­sar­ily go through every step, is sim­pli­fied and does not involve high financial risks or burdens.

Habitual buying decision

In habitual buying decisions, decision-making is based on habit and ex­per­i­ence. Buyers usually target or automate products, man­u­fac­tur­ers or service providers with which they are familiar. Prior actions such as com­par­is­ons or research basically do not occur because buying decisions are shaped by known product quality, man­u­fac­turer contacts or an optimal price-per­form­ance ratio. An example of this is the buying behaviour of regular customers or sub­scribers who remain loyal to a shop, man­u­fac­turer, product, service provider or brand.

Impulsive buying decision

A buying decision is described as impulsive if the purchase is triggered spon­tan­eously, emo­tion­ally or by strong stimuli and does not require a lengthy psy­cho­lo­gic­al process. Financial or material risks are low. The purchase may be triggered by a sudden feeling of pleasure such as ravenous hunger, emotional triggers, lack of time, urgent need, or external in­flu­ences such as special offers.

Here’s how the buyer decision process works

Sellers, busi­nesses or service providers should not leave buying decisions to chance. Those who analyse and evaluate both the types of buying decisions and the phases in the buyer decision process can influence the buying behaviour of customers and control it through targeted marketing. Buying decision depend on cultural-social, in­di­vidu­al, financial and psy­cho­lo­gic­al criteria and factors, depending on the category, situation and person. Nev­er­the­less, they can be divided into essential phases in B2C and B2B situ­ations as well as in e-commerce and sta­tion­ary retail.

Which phases are involved depends on the phase model used to il­lus­trate the customer journey. The five-phase model according to John Dewey and the Consumer Decision Journey (CDJ) according to McKinsey are among the most es­tab­lished marketing models.

Five-phase model (Dewey)

If you want to align marketing and the eval­u­ation of customer behaviour with John Dewey’s model, you should consider the following purchase decision phases:

  1. Problem iden­ti­fic­a­tion (need): Customers and buyers have a concrete need that can be served by ap­pro­pri­ate offers. This is stim­u­lated or triggered by internal or external stimuli. Needs can also be spe­cific­ally created through marketing and ad­vert­ising.
  2. In­form­a­tion phase (research): To satisfy the need, customers go in search of in­form­a­tion and conduct a search for suitable offers and product details. The scope of the research de­term­ines whether extensive or limited decisions are made. In this phase, decision-making from the company’s point of view can be actively in­flu­enced by a multi-channel strategy or eval­u­ations of customer behaviour when searching for in­form­a­tion.
  3. Eval­u­ation/com­par­is­on of al­tern­at­ives: Depending on the hoped-for or desired max­im­isa­tion of benefits and profits, the buying decision is preceded by a com­par­is­on and eval­u­ation of the closer choices. It is important here to com­mu­nic­ate product features and benefits clearly and con­vin­cingly and to make them at­tract­ive through positive feedback, reviews, awards and USPs.
  4. Buying decision (buying act): The buying decision is the cul­min­a­tion of the preceding phases. The act of purchase brings about a written, verbal or tacit contract of sale. According to the American economist Philip Kotler, the decision in this phase can still be disrupted by negative feedback from other customers or by other in­di­vidu­al factors on the part of the customer that are difficult to influence.
  5. Post-purchase phase (after-sales): The after-sales phase offers companies a wide range of op­por­tun­it­ies to build customer loyalty, customer trust and customer retention, e.g. through after-sales services, customer service, product guar­an­tees or ad­di­tion­al in­form­a­tion on offers such as those used by re­com­mend­a­tion systems in e-commerce. Satisfied customers can thus become regular customers and the buying decision can become habitual.
Image: buyer decision process in five phases
The buyer decision process by dewey can basically be divided into five phases

Consumer Decision Journey (McKinsey).

The CDJ model is based on a study by the con­sult­ing firm McKinsey and maps the buyer decision process in the following phases:

  1. Con­sid­er­a­tion: Customers and shoppers compare offers and consider different options for a buying decision based on previous contacts or in­form­a­tion gathered.
     
  2. Eval­u­ation: Through various in­form­a­tion channels, customers compare, analyse, and evaluate a selection of options. Companies can already use these channels to guide buying decisions.
     
  3. Buy: The final phase consists of the act of buying, which can be leveraged and in­flu­enced to maximise profits through flexible pricing models, low-cost shipping options, and low customer effort.
     
  4. Ex­per­i­ence, Advocate & Bond: The after-sales phase provides multiple op­por­tun­it­ies to make quality im­prove­ments in pro­duc­tion, service, order and shipping pro­cessing, and customer sat­is­fac­tion by following up with customers and analysing feedback.
Note

Another model that defines phases and goals of sales-boosting marketing activ­it­ies is the AIDA model. It includes the phases and ad­vert­ising subgoals of attention, interest, desire, and action.

Special features of the online buyer decision process

Suc­cess­fully in­flu­en­cing buying decisions in e-commerce depends heavily on companies knowing where their customer groups are moving, informing and ex­chan­ging in­form­a­tion online. An­ti­cip­at­ory multi-channel and customer journey strategies can be used to analyse customer buying behaviour and improve vis­ib­il­ity and reach, e.g. through customer journey mapping, customer profiles or personas and buyer personas as well as through vis­ib­il­ity, ac­cess­ib­il­ity and trans­par­ent com­mu­nic­a­tion. Here, it is important to know what ex­pect­a­tions and re­quire­ments customers have of e-commerce services and online retailers.

The fact that more and more customers are making buying decisions online, makes a sus­tain­able digital sales strategy including con­ver­sion rate op­tim­isa­tion and CRM in e-commerce in­dis­pens­able and rep­res­ents a clear com­pet­it­ive advantage in view of the digital in­form­a­tion overload.

As special features of the online buyer decision process, the following customer ex­pect­a­tions and criteria for a positive buying decision should be noted in par­tic­u­lar:

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Factors in­flu­en­cing a buying decision

The process of buying decision is in­flu­enced by various factors. If you fa­mil­i­ar­ise yourself with criteria for a buying decision, you can use them in marketing or cir­cum­vent them, depending on the situation, to ensure an optimal customer journey and increase turnover rates.

The following in­flu­en­cing factors should be con­sidered:

  • Personal or emotional buying motives/in­cent­ives, e.g. physical needs such as hunger, thirst or eating habits, in­di­vidu­al interests and pref­er­ences, technical re­quire­ments or wishes, aesthetic pref­er­ences and tastes, hygienic needs.
     
  • Higher-level, rational purchase motives/in­cent­ives, e.g. maximum or minimum financial limits, family situ­ations, business goals, special re­quire­ments, pro­fes­sion­al needs or equipment, hygienic demands
     
  • External purchase motives/in­cent­ives, e.g. strategic display of products, ar­ti­fi­cial scarcity of offers, discounts, special offers, brand prestige, aesthetic/sensory marketing, word-of-mouth and customer re­com­mend­a­tions, ad­vert­ising campaigns and prominent ad­vert­isers or promoters, multi-channel marketing and om­ni­chan­nel marketing
     
  • Purchase re­stric­tions, e.g. products or services requiring pre­scrip­tion, approval, or cer­ti­fic­a­tion
     
  • Purchase risk, e.g. pre­lim­in­ary financial con­sid­er­a­tions and action con­straints, or safety and quality concerns of certain groups of buyers and shoppers
     
  • Shipping and returns service, e.g. low-cost shipping including various shipping options and customer-friendly returns service
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