How consumers make decisions

Every day, people form impressions of brands from touch points such as advertisements, news reports, conversations with family and friends, and product experiences. Unless consumers are actively shopping, much of that exposure appears wasted. But what happens when something triggers the impulse to buy? Those accumulated impressions then become crucial because they shape the initial-consideration set: the small number of brands consumers regard at the outset as potential purchasing options.

The funnel analogy suggests that consumers systematically narrow the initial-consideration set as they weigh options, make decisions, and buy products. Then, the postsale phase becomes a trial period determining consumer loyalty to brands and the likelihood of buying their products again. Marketers have been taught to “push” marketing toward consumers at each stage of the funnel process to influence their behavior. But our qualitative and quantitative research in the automobile, skin care, insurance, consumer electronics, and mobile-telecom industries shows that something quite different now occurs.

Actually, the decision-making process is a more circular journey, with four primary phases representing potential battlegrounds where marketers can win or lose: initial consideration; active evaluation, or the process of researching potential purchases; closure, when consumers buy brands; and postpurchase, when consumers experience them (Exhibit 2). The funnel metaphor does help a good deal—for example, by providing a way to understand the strength of a brand compared with its competitors at different stages, highlighting the bottlenecks that stall adoption, and making it possible to focus on different aspects of the marketing challenge. Nonetheless, we found that in three areas profound changes in the way consumers make buying decisions called for a new approach.