Consumer Decision Journey

The Consumer Decision Journey, sometimes also called the Customer Decision Journey, is a business framework developed by McKinsey & Co.  It describes the process a consumer goes through of making a purchase.  The Consumer Decision Journey proposes that the customer goes through four phases in a cyclical process. Each phase represents a potential marketing battleground where companies compete for the customer’s purchase and loyalty.

Conventional thinking compares the customer’s journey to a funnel, where she travels through the phases of Awareness, Familiarity, Consideration, Intent, and finally Purchase. In the funnel, drop-offs occur at each stage. According to McKinsey’s research, due to the increase in online activity, this linear funnel concept has become outdated and the journey is now circular. Drop-offs and new entrants occur at each stage.

customer_decision_journey

The four phases of the Consumer Decision Journey are:

  • Initial Consideration.  When the customer first conceives the notion of buying a product, she will develop an initial set of brands to consider buying.   Brands in the initial-consideration set are three times more likely to be purchased than brands that aren’t in it.  This means that Brand Awareness is vital.  In this phase, we should focus on push marketing.
  • Active Evaluation.  In the evaluation phase, the customer is seeking information and shopping around to make an informed purchase decision.  She will ask for recommendations from friends and family, read reviews online, go to the store to test out products, and so forth.  This phase empowers both the customer and the company.  How are companies empowered?  Companies have the opportunity to enter the consideration set–and even force out companies in the Initial Consideration Set.  Big brands can no longer take their position for granted.  With increased online and social presences, companies are  increasing the number of touch points with the customer–thus increasing their influence over the customer’s purchase decision in the Active Evaluation phase.
  • Moment of Purchase.  This is the point in the time when the customer goes to the retailer and makes the purchase.  Even at stage of the journey, companies can still influence the purchase.  This is done through in-store marketing and influence of store salesmen.
  • Post-purchase Experience.  After the purchase, the customer builds expectations based on her experience that will impact her next purchase journey.  This creates the circular nature of the journey.  In this phase, our goal is to foster customer loyalty, which will drive repeat purchases and word-of-mouth marketing.  Likewise, if the customer is dissatisfied with the purchase, she will become a negative influence on the purchase decisions of others.  This is not limited to her immediate circle of friends and family either.  For instance, she can post a negative review on a prominent website, which will be read by countless potential customers in the Active Evaluation stage.

If our goal is to reach an emerging market, there are certain nuances that should be highlighted and understood.   Though the overarching process is the same, the emphasis in marketing is different when comparing a customer in an emerging market versus a customer in an established market.  For instance, in an established market, customers often rely on online reviews when making purchase decisions.  In emerging markets, online sites are not yet trusted by the customer.

More information can be found in these articles:

http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey

http://flevy.com/blog/the-complete-guide-to-product-adoption/

http://flevy.com/blog/craft-a-successful-strategy-for-emerging-markets/

Business frameworks like Consumer Decision Journey are invaluable to evaluating and analyzing various business problems. You can download business frameworks developed by management consultants and other business professionals at Flevy here.

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