Biz Tips: Purchase Decisions: 9 Things to Know About Influencing Customers

Biz Tips: Purchase Decisions: 9 Things to Know About Influencing Customers

Biz Tip:

Purchase Decisions: 9 Things to Know About Influencing Customers

If you want to get people to buy your stuff, you need to understand how consumers make purchasing decisions.

People research products. They compare competitors. Some 87% of buying decisions begin with research conducted online, usually on Amazon or Google.

Product quality and seller reputation matter, of course. But what about when the product matches the customer’s needs and they trust the seller? What influences a purchase decision once those fundamentals are in place?

Here are 9 things you should know if you want to win over customers as they make a decision to buy.

1. Reviews matter for deciding on products and companies.

Many studies in recent years have confirmed what we already know: People read reviews and decide what to buy based on them.

Some 88% say they trust online reviews as much as personal recommendations, and 39% read reviews on a regular basis. In fact, only 12% of those surveyed don’t read reviews at all. (And that was a few years ago.) We’ve written at length on the impact of user-generated reviews.

There’s a strong correlation between a product’s review stars and the number of orders. (Image source)

So start gathering reviews on your site. If you sell commodity products, you might want to pull reviews from an external site so that you can display more of them. Use structured data to get review stars from highly reviewed products into search results. Our internal study on the impact review stars showed that they can increase click-through-rates by as much as 35%.

More reviews can help insulate your reputation from the inevitable impossible-to-please customer. That said, don’t delete negative reviews. They actually help sales if there are only a few of them and they’re politely worded.

If there are tons of negative reviews, most people are naturally turned off and look elsewhere.

2. People gather buying recommendations from mixed sources.

Even though social media and the Internet rule, customers make purchase decisions using a combination of old media, new media, and conversations with friends and family. (To read more about this, I encourage you to check out People Comparison Shop, Stupid.)

According to a 2009 study by Harris Interactive, the most common methods for gathering information prior to making a purchase are:

  • using a company website (36%);
  • face-to-face conversation with a salesperson or other company representative (22%);
  • face-to-face conversation with a person not associated with the company (21%).

Another, slightly more recent, study claims that 59% of people still consult friends and family for help with a purchase decision.

friends discussing a purchase

Even in the modern era, the influence of friends and family on purchasing decisions remains strong. (Image Source)

Asking people around us for recommendations remains commonplace. This means the experience you provide to your customers matters a great deal.

Omnichannel journeys are on the rise as well. Customers are no longer relying on single sources. According to recent research, 73% of retailers say omnichannel is important to them, but only 38% say they are beyond the beginning stages of an omnichannel journey.

3. People don’t often know why they like something.

There’s a famous study about jam tasting. Scientists asked a big sample of consumers to rank jams on taste, ordering them from top to bottom.

Then the scientists re-did the study with a different, but still statistically representative, group. This time, they asked the sampler to put the jams in order of taste and explain their thinking. The order flipped. The jams that the first group ranked as the best tasting were judged to as the worst by the second group.

The reason is that the conscious brain suddenly got involved in a task it didn’t really understand. Suddenly, there were social pressures (i.e. what they should choose), leading answers away from what people actually liked.

People make instant decisions with their subconscious. When they have to explain the choice, the choice may change completely because the rational mind is involved. (To learn more about rational and irrational thinking, check out our articles on System 1 and System 2.)

Takeaway: Don’t trust people when they explain why they bought something. They might not know themselves.

4. The crowd leads the way to buyer preferences.

Most of our preferences are learned and formed by social norms and expectations.

large crowd

Your buying habits may depend more on crowd behavior than you think. (Image Source)

An old Washington Post column uses the example of clam chowder. Decades ago, it was thin. But now, it’s almost uniformly thick. What happened? At some point, restaurateurs got in the habit of adding flour to make chowder thicker and thicker. Now, this is what consumers have come to consider a bowl of “authentic” clam chowder.

These learned preferences can just as easily involve characteristics that, from an objective standpoint, don’t make a product any better—and might even make them worse, especially when it comes to texture.

Ravi Dhar, a marketing professor at the Yale School of Management, notes that although Heinz ketchup does not reliably win in blind taste tests, it has established itself as the gold standard in its category because it’s thicker. In the marketing world, Dhar says, “meaningless attributes often lead to meaningful differentiation.”

Ever wondered why so many products on store shelves are so similar? Wouldn’t it be better to make them different? Not necessarily.

“There are huge incentives in consumer markets, even for competing companies, to make everything the same, ” says Dan McGinn, president of a research and strategy consultancy in Arlington, Virginia.

Yes, our preferences evolve as society evolves. That impacts our purchasing decisions. A “family car” used to mean a station wagon. Then it was a minivan. Now, it’s an SUV.

If you’re interested in this concept, we’ve written an article on the idea of familiarity as a marketing tactic. Essentially, the more we’re exposed to something, the more likely it is that we’ll develop a preference for it and decide to buy it.

Takeaway: In markets where people have a lot of experience with the product category, it pays to mimic the market standard.

5. Simplicity always wins for decision-making.

Cognitive fluency is the human tendency to prefer things that are not only familiar, but also easy to understand. (That’s why simple sites are scientifically better.)

For marketers, this means that the easier it is to understand an offer, the more likely people are to buy it.

Psychologists have determined, for example, that shares in companies with easy-to-pronounce names significantly outperform those with hard-to-pronounce names. Coincidence? Nope.

Why people love to buy unlimited plans.

Understanding and comparing different cell-phone plans is a pain. It takes time to identify the best option. Who wants to spend 20 minutes comparing monthly minutes and text limits? So what do people do? They buy the unlimited plan. It’s often not the best value, but it’s easy to understand.

unlimited plan from verizonConsumers often decide to buy unlimited plans because they’re simple to understand, not because they make the most financial sense. (Image source)

Cell phone companies make the most money from unlimited plans, and they have an extra incentive to make other plans confusing. Plans with a fixed number of minutes charge high fees for going over your allotted minutes. It’s designed to cause you enough pain that you switch to a plan with a higher regular fee.

Previous positive experiences matter.

Cognitive fluency also explains

  • Why you continue to buy from brands and service providers you’ve used before
  • Why you often order the same thing from the menu.

It’s just easy. You’ve tried it, it worked, and you don’t want to spend a bunch of time researching alternatives. You don’t want to risk a bad purchase.

As a marketer, this means it’s super important to get a customer to decide on that first purchase. Pack your first offer with value and make it as easy as possible to buy. Once consumers have their first positive buying experience, it’s much easier to get repeat purchases.

Hard to read, hard to buy.

Make your website easy to read. When people read something in a difficult-to-read font, they transfer that sense of difficulty onto the topic they’re reading about.

The same goes for products and purchases. We’ve conducted a number of original studies on ecommerce product pages. In one of those studies, we found that the way products are described matters. The format of text descriptions influences how people perceive the products themselves.

Takeaway: Make every aspect of the decision to purchase as simple as possible.

6. For retail stores, even flooring influences purchasing decisions.

Research by Joan Meyers-Levy suggests that the way people judge products may be influenced by the ground beneath them.

“When a person stands on carpeted flooring, it feels comforting,” says Meyers-Levy. “But the irony is that when people stand on carpet, they will judge products that are close to them as less comforting.”

carpet and wood flooring

If you’re trying to persuade your retail customers to buy, even elements like your store flooring can impact their purchasing decision.

When people were standing on soft carpet and viewed a product that was moderately far away, they judged that item’s appearance to be comforting. However, people who examined products while standing on the same plush carpet judged items that were close by as less comforting.

This translates online as well. The way things are presented and emotional factors come into play. It’s your responsibility to be aware of them and manage them accordingly. Seemingly unimportant details can affect consumers’ decision to buy or click away.

Takeaway: Cover walking areas in your retail store with soft carpet, but use hard flooring next to products.

7. The jury is out on social media’s influence on buying decisions.

There’s conflicting research on the influence of social media on purchase decisions. One study found that consumers are 67% more likely to buy from brands they follow on Twitter.

Another report showed that social media rarely leads directly to online purchases. Data indicated that less than 2% of orders resulted from shoppers coming from a social network. The report found that email and search advertising were much more effective vehicles for turning browsers into buyers.

The difference between these two studies is that the first was based on what people said, but the second was based on what people actually did. (However, they were tracking direct click-throughs from social media, not taking into account the positive influence it may have over time.)

The real answer is that social media probably impacts purchase decisions, but it’s a slow, relationship-building process. Just shouting “buy this” works on a very small number of people.

More recent research confirms this. Reviews (45%), promotions (44%), ads (30%), and trends (25%) observed on social media influence buying decisions, but not directly. Only 16% of those surveyed purchased directly from a social media platform.

social media influence on shopping behavior

Image Source

That said, as the popularity of off-site buy buttons increases, so might direct purchases.

influence of buy buttons on social media purchases

Image Source

Social media links have an influence, too.

A study examined how the presence of a Facebook “Like” button and the Twitter logo might affect online purchase decisions.

The findings:

  • When the product was one for which public consumption is desirable (sportswear, fragrance), the presence of the Facebook and Twitter icons made people 25% more likely to purchase.
  • When the product was more private in nature (Spanx, Clearasil), the presence of Facebook and Twitter icons made participants 25% less likely to purchase.

Does buying your product make your customer seem more or less cool? Place the Facebook and Twitter icons accordingly.

8. When it comes to buying, we make emotional decisions and rational justifications.

Do people make decisions based on emotions or logic? McCombs marketing professor Raj Raghunathan and PhD student Szu-Chi Huang point to their research study.

It shows that comparative features are important but mostly as a justification fofr after a buyer makes an emotional decision. Here’s how they ran their study.

The story of two chickens

Research participants were shown two photos. One was a nice-looking, plump chicken. The other was a chicken that looked thin and sickly. Participants were told that the plump chicken was a natural chicken and that the thin chicken was genetically engineered.

Do we make rational buying decisions? A study with two chickens suggested otherwise. (Image Source)

Researchers informed half the participants that natural chickens were healthy (but less tasty) and genetically engineered chickens were tasty (but less healthy). The other half were told the opposite.

Overwhelmingly, participants preferred the plump chicken, but their reasoning was different:

  • The first group claimed that it was because they valued health above taste.
  • The second group said it was because taste was more important.

Neither group justified their choice based on how they felt about the chicken’s looks. They felt compelled to justify their emotional choices with rational reasons—to the point that the two groups gave opposing accounts to justify the same “purchase” decision.

Emotions rule in all areas of buying behavior.

The scientists replicated the results in other areas, including marketing, politics, religion, etc.

“This process seems to be happening somewhat unconsciously, people are not really aware they’re coming up with these justifications. What is even more interesting is that people who claim that emotions are not that important, who consider themselves to be really rational, are actually more prone to fall into this trap.”

What does this mean for marketers? Raghunathan suggests that the earlier you can make an emotional connection, the better. Once consumers have decided that they like a particular option, it’s difficult for them to backpedal.Rational thinking will only justify their emotional choice.

(You might also be interested in reading about how consumers use post-purchase rationalization to avoid buyer’s remorse. The brain doesn’t like to think it made an emotional decision, so we assign rational reasons for our decisions post-purchase.)

9. The subconscious drives purchase decisions.

For the last 50 or 60 years, market research, as an industry, has believed that people make decisions based on rational, conscious thought processes. Science tells a different story, one that turns that fundamental belief on its head. Most decision-making happens at the subconscious level.

We may focus on facts and numbers, but in many cases, it’s the subliminal that makes people decide one way or another.

Conclusion

People are complex. We’re just beginning to scratch the surface of what they really want. Some tests have shown that people prefer items on the right or at the bottom of the list. Why?

We don’t know yet. Sometimes we make purchasing decisions even when we aren’t paying attention to the products. New questions about human thought processes and decision-making pop up every day.

Neuroscience is still working on the answers, but there are some insights that we can start putting into play now.

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