Do you know, exactly, how your customers make decisions? How do they find you, decide on your showroom or your dealer’s showroom and slap down the cold hard cash (or plastic) for a purchase? Do you know what methods they’re using to find your showroom? Do you know why they’re making decisions to buy from you rather than your competitors?

To find out answers to these questions, you need to understand what is meant by customer decision-making process. Each customer goes through five stages to complete this process: need recognition, information search, evaluation of alternatives to meet this need, purchase decision and post-purchase behaviour.

You have to firmly grasp each of these steps to convert a potential customer to a satisfied customer. Steve Jobs once said, “You’ve got to start with the customer experience and work backwards to the technology. You cannot start with the technology and try to figure out where you are going to sell it.”

I. Need recognition 
Need recognition is the first step in consumer buying behaviour and is also called problem identification. It occurs when a consumer discovers an unmet need that must be fulfilled.

A need is a specific requirement you have to live and function in society. Needs can be physiological, personal or socio-economic. For example, needs include food, shelter, transportation, wealth, power and social status. A want, on the other hand, is a means by which needs are satisfied. A pizza fulfils the need for food; a car fulfils your transportation needs. Some products indicate power and status. Marketing centres on determining needs and developing, promoting and distributing products and services that fulfil them.

How do you identify these needs? Put yourself in your customers’ shoes
Understanding the customer needs, you have to take a hard look at the points at which your customers have contact with your business. These include customer visits, phone calls, correspondence and deliveries. Do your premises look scruffy, is your receptionist unfriendly or do your phones ring off the hook? All these things can make a customer feel disappointed.

The most common customer complaint is being kept waiting. If you’re slow to return calls or fulfil orders, then you’re in danger of losing customers. Above all, customers want you to deliver what you have promised and surpass their expectations.

Understanding your customer needs and improving your service must be a priority throughout your business. Everyone from the front desk to the delivery staff should focus on exceeding customer expectations. 

Use data to understand your customers
Your customer relationship management (CRM) system holds valuable information about your customers that will help you to understand their needs. Investigate the data thoroughly and it can tell you a lot. Look for patterns so you can see when your customers typically make orders. You can also use the data to analyse your performance. Check how quickly you’re responding to orders or delivering goods.

Modern CRM systems are more sophisticated than simple mailing lists. Because they hold information about customer behaviour and preferences, they can improve customer satisfaction and retention. They can help you to identify customer needs more effectively, allowing you to up-sell and cross-sell, increasing profitability.

Ask your customers what they think
Conduct a customer satisfaction survey and you will make your customers feel valued. You will also gain valuable insights. But don’t ask for feedback if you are not prepared to make changes. When you do make improvements, tell your customers what you have done as a result of their feedback. 
Customer surveys can tell you things you may not know, including human factors such as rigid company procedures. Not everyone complains when they are dissatisfied. Instead, they tell their friends about their bad experience and take their business elsewhere. Unless you proactively consult your customers, you may never discover where you are going wrong. As well as asking for feedback, set up a customer contact programme to ensure you keep in touch with your clients. 

II. Information search
Once the need is identified, it’s time for the customer to seek information about possible solutions to the problem. He will search information depending on the complexity of the choices to be made.  For example, while buying pizza requires little information, a TV set needs more. Then the customer will move to make his opinion to guide his choice and his decision-making process with:
Internal information:

 This information is already available with the customer. It may come from his previous experiences with your brand or his personal opinion he may have of your brand. Internal information is sufficient for the purchasing of everyday products that the customer knows. But when it comes to a major purchase with a level of uncertainty or stronger involvement and the customer does not have enough information, he turns to next source:

External information:
 This is the information on a product or brand received from the friends or trusted advisors, by reviews from other customers or from the media and of course, from business sources such as your advertising and promotion.

III. Alternative evaluation
Once the information is collected, the customer will be able to evaluate the different alternatives available to him.

He will evaluate not only objective characteristics (such as the features and functionality of the product) but also subjective (perception and perceived value of the brand by the customer or its reputation).  No two customers will give the same importance to each characteristic. And it varies from one customer to another. 

The customer will then use the information previously collected and his perception or image of a brand to establish a set of evaluation criteria. He will classify the different products available and decide which alternative has the best chance to satisfy him.

IV. Purchase decision
Although the customer has decided what suits him best, his buying decision process and his final decision may also depend or be affected by such things as the availability of a special promotion, a return policy or good terms and conditions for the sale.

For example, a customer has decided to purchase a TV of X brand could change his decision if he has an unpleasant experience with the sellers in the store. Or, a promotion in a department store for another similar brand with 12 months’ interest-free offer could tip the scale for the new brand in the customer’s mind.

V. Post-purchase behaviour
After the product is purchased, the customer will begin to evaluate the adequacy with his choice to meet his original needs. If the product has brought him satisfaction, he will then minimize the stages of information search and alternative evaluation for his next purchases in order to buy the same brand.  On the other hand, if the experience with the product was average or disappointing, the customer is going to repeat the all five stages of the customer buying decision process during his next purchase.
The post-purchase evaluation may have important consequences for a brand. A satisfied customer is very likely to become a loyal and regular customer.  And, he will spread the word around. This type of loyalty is a major source of revenue for the brand. 

On the other hand, dissatisfaction amongst customers has a significant impact on the financial outcomes for your company. As satisfaction levels drop, loyalty drops faster. Since customer satisfaction and employee satisfaction have such a direct influence on each other, when correctly managed, this can have a positive influence on profitability and growth.

(Lionel Wijesiri, a corporate director with over 25 years’ senior managerial experience, can be contacted at [email protected])