The Purchase Journey & Customer Psychology
Exploring Some Economic Principles
I want to start this article by explaining some key terms in economics. Veblen, Giffen, and normal goods are product categories used when referring to how a product responds to the laws of supply and demand. Normal goods are fairly self-explanatory and follow the basic law of supply and demand. Where things get a little weird is with Veblen and Giffen goods, as neither of these adheres to the laws of supply and demand. Veblen goods are luxury goods (think Rolex and Rolls-Royce). Unlike normal goods, Veblen goods have a greater demand when the price is higher or supply is limited. Similarly, Giffen goods also have an upward-sloping demand curve. However, Giffen goods are essential items (like bread, rice, and supermarket own-brand food) so unlike Veblen goods, Giffen goods are heavily affected by the income effect. When real income is lower, the demand for Giffen goods increases.
You might be wondering why I'm explaining economic principles in an article about marketing, but it is important to differentiate these products. As consumer behaviour and psychology change drastically depending on the type of product. For this article, I will be exploring the purchase journey and customer psychology of 'normal' goods.
The Purchase Journey
Recognition of a problem or need
Searching for information on a solution
Evaluation of alternatives
Selection of the chosen solution
Making the purchase
Evaluating the purchase
(In reality, the journey is rarely this linear and simple)
The more expensive and long-term a purchase is, the greater the extension of this journey - specifically steps 2 and 3. Commonly referred to as a considered purchase, these are frequently more emotional purchases that necessitate lengthy deliberation, e.g. A car. These items are not purchased with the same frequency and are often expected to last several years. Less-considered purchases like clothing still follow the same journey, it is simply a more accelerated journey in the majority of cases. This can make it more competitive to market these products, as there is less time to reach the consumer.
Disrupting the Purchase Journey - The Jam Study
Offering a large variety of products is often considered to be a positive attribute for a brand. However, it can very easily overload customers with choices, which can disrupt the purchase journey.
A study was conducted by Columbia University Business Professor, Sheena Iyengar. The Jam Study was conducted at a gourmet market in California, in the study Iyengar offered samples of jam. Every few hours the amount of samples would alternate between 24 and 6 options.
The findings of this study were that while 60% of customers were drawn to the larger assortment of 24 jams, only 5% of them went on to make a purchase. Conversely, of the 40% of customers who visited while the smaller sample selection was available, 30% went on to make a purchase.
Too many choices can 'jam' up sales!
This is not to say that your brand shouldn't have plenty of choices available, it is more to be mindful that there is a point of diminishing returns when it comes to choice.
Let's say for example you sold a product like a radiator on your website, radiators can be configured by length, width, depth, style, colour, orientation, and sometimes heating type. If each one of these options was listed individually on your website, this could easily become thousands of products a potential consumer would have to scroll through to find what they wanted. It is easy to see why this might be overwhelming and thus make a purchase less likely.
The solution isn't to not offer these choices, but to present them in an alternative manner that makes digesting these choices easier and less overwhelming. Take those same radiators, if on your website all customers had to do was pick between a handful of styles first and then configure their exact specifications, this would be far less disruptive to their purchase journey.
Why the Journey Should Matter to You as a Marketer
At this stage, there's a non-zero chance you're reading this why I'm rambling about economics, jam, and radiators in an article about the purchase journey. To that I say, fair enough.
However, the purchase journey is important to consider and understand as someone trying to get consumers to make that journey with you. The most effective way to market your products is to be present at every stage of the purchase journey. This doesn't mean bombarding consumers with flashy discounts and sales as they're just recognising a problem or need, it means showing them the right content at the right time. In my opinion, the best way you can do this is with funnel-based marketing. You can read more about this in one of my articles titled: The Marketing Funnel & Funnel-based Marketing.
