A Key Skill for Innovators: Understand How Your Customers Make Buying Decisions

Good innovators do one thing particularly well.

They relate to their prospects and customers. They try as hard as possible to understand how people think and what is their buying decision process.

The holy grail in marketing?

This is to make sense of why someone buys something.

Psychology, anthropology, and cognitive neuroscience are great sources of inspiration for good marketers. That’s because marketing is intrinsically about human beings.

You can find examples of this in two of the best marketing books:

The Four Human Laws of Marketing: People’s Decision-making Process

Al Ries and Jack Trout highlight 22 laws that should shape a marketing strategy. These laws are rooted in a theory they popularised, positioning.

Positioning is a great way to look at how people make buying decisions. It helps to explain how prospects and customers perceive and categorise products and brands:

  1. Law of the Mind: It’s better to be first in the mind rather than to be first in the market.
  2. Law of Category: If you can’t be first, then you should set up a new category you can be first in. Marketing is more a battle of category than a battle of brands. Most companies try to create “better” products rather than to set up a new category that resonate with their prospects.
  3. Law of Perception: Marketing is not a battle of products, it’s a battle of perceptions in the mind of the customers. You have to match what’s in the mind if you want to succeed.
  4. Law of Focus: The most powerful thing in marketing is owning a word in the prospect’s mind. So, narrow the focus down to what you want the prospect to remember.

Jobs to Be Done: A Theory about Why People Buy Things

Customers don’t just buy products or services. They “hire” them to make progress. Clayton Christensen and Karen Dillon refer to this theory using the term “jobs to be done“.

Here’s how they define it in Competing Against Luck:

“A job is defined as the progress that a customer desires to make in a particular circumstance.

This definition is specific and important: Fully understanding a customer’s job requires understanding the progress a customer is trying to make in particular circumstances and understanding all of its functional, social, and emotional dimensions—as well as the tradeoffs the customer is willing to make.”

The job theory is an excellent lens to observe your market. It forces you to adopt a customer-oriented approach. This is a way to go beyond what your products and services can do. And it makes you think about “what is the reason they bought my product or not”.

An Example of the Buyer Decision Process for New Products

How do you decide if you’re going to buy the new iPhone or the new Android phone?

When making a decision to buy something, consumers often consider a bucket of brands. In this example, this could be iPhone, Google Pixel, and Samsung Galaxy.

Comparison: iPhone 7 vs Google Pixel vs Samsung Galaxy S7

The brand that they perceive will do the job better is often the one they decide to buy.

And perception is based on emotional reactions:

Few consumers will bother looking at all the features and testing the user experience in both iOS and Android. We make most buying decisions depending on how we feel about them.

In the example of buying a new product, a significant part of our decision-making process is about our concerns. We all feel a bit of anxiety when we buy something new.

Concerns are the things that are holding us back.

Sometimes the decision is already made. If you feel that you’re an Apple person, you will hardly consider buying an Android phone—the concern level is too high. You see that in practice: Some consumers have an extreme opinion on this, some other don’t. So if you don’t feel particularly attached to a brand, you will consider other concerns—the hurdles of moving from one ecosystem to another: learning the new user experience, the uncertainty of whether you’re going to like it, moving your data…

You’ll buy the new product if you perceive that the experience of using it is way better than the current one that you have. You feel that the new product will be better at doing the job. And this justifies overcoming your concerns.

Theory + Practice: Understand Why People Make Buying Decisions

Marketing isn’t difficult in theory.

The tough part is to understand in practice how your prospects and customers make buying decisions, and why they would buy something from you. And then, buy again.

Keep this in mind:

Empathy requires practice and immersion. It cannot be simply taught in a book.

[Want to learn more about brand positioning? Listen to my chat with Laura Ries—positioning expert and Al Ries’s daughter.]

Understand Buying Decisions