Three frameworks for understanding how customers make decisions

The prime driver in decision-making is emotions. And yet economic theory says otherwise. It says that we all behave rationally. Which is it? I want to explore how three marketing frameworks can help us better understand decision-making and why it is by no means a rational process.

Do we always follow the science?

Throughout the pandemic we have heard politicians say that they are driven by the science – i.e. the rational factors – in their decision-making. They say this but I suspect that emotions (the government prefer to use the word “judgement”) carries more weight. This seems counter-intuitive. You would imagine that we, as thinking human beings, weigh up the facts when we make decisions. We do. However, the importance we attach to the facts will differ between us. Those of us who are risk averse will think some things are more important than those who are fearless. There are many of us how decide with the heart and not the head. A lot depends on the decision that is being made. Sometimes we go so far as to write down the pros and cons of a decision and try to weigh them up. We wouldn’t do this when we buy a tube of toothpaste but we may do it when we are buying a machine tool for a business.

1. Maslow's framework leads to segmentation

Once we recognise that people interpret facts and data in a different way, we get closer to understanding how our customers make their decisions. A good starting point is Maslow's hierarchy of needs. At the bottom of his pyramid Maslow places physiological needs such as food and warmth as the most basic motivations. Once we have got basic needs out of the way he tells is that we are influenced by more aesthetic factors such as esteem.

Not all customers are at the same level on the Maslow pyramid. Take for example a buyer of machinery used in a manufacturing facility. A buyer of machinery who is desperate to make a purchase because the machine in the plant has given up the ghost will be driven by basic needs at the bottom of the pyramid. Without a replacement machine the plant will stop working. In desperation for a machine to replace the failed incumbent, the buyer is likely to act differently to someone who has time on their hands to buy a new machine for expanding the plant. It doesn't matter if the product is software, toothpaste or machinery, the motivations of customers are different. This is, of course, the basis of segmentation.

2. AIDA - awareness, interest, desire, action - they are all important in decision making

Once we have got the idea of segmentation out of the way we need to consider another marketing framework. This is the awareness and knowledge a customer or potential customer has of the product. Here we turn to the AIDA template that tells us that before a decision can be made, a customer has to be aware of the supplier, have interest in the supplier, and desire the product. Clearly someone cannot buy a product if they have no idea it exists.

3. The branding bull's eye will explain the role of emotions

There is a final framework that helps us understand the decision-making process and this is the branding bull’s-eye. What do people know about a brand? What do other people say about it? And what is the position of the brand on the shelf space of our mind. Here we loop back to emotions because if the brand speaks to us in a way that resonates, the decision is largely made.

Of course, it's important to have a product in the right place at the right price at the right time. The marketing 4Ps are fundamental to every business. But getting a customer to choose your product will come from the consideration of just three frameworks:

· Maslow's hierarchy of needs leading to segmentation

· The AIDA framework that describes the purchasing funnel

· The branding bull's-eye that helps you make your product is different and distinctive.