What we know about consumer decision making

Source: WARC Best Practice, December 2021

Downloaded from WARC

Looks at the processes through which people make decisions, often sub-conscious, instinctive and
driven by bias, and how to work with these processes effectively.

Consumer decision making is a surprisingly complicated issue to research as much of it is completed

sub-consciously, it is instinctive and based on a series of subtle heuristics and bias. Cultural
background and interest in the category will influence the decision making at various points across
the path to purchase. Brands are advised to use decision making analysis to ensure that the choices
they offer the consumer are timely and genuinely useful, that they aid rather than inconvenience the
consumer.

Definition
Consumer decision making is the process by which consumers identify their needs, collect information, evaluate
choices, and, finally, make a purchase decision. These actions are determined by psychological and economic
factors and can be influenced by environmental factors such as cultural, group, and social values.

Key insights

1. Consumer decision-making is complex and adaptive, along a mindful to mindless

continuum

Market research company Ipsos has challenged conventional wisdom about System 1 and System 2 thinking
with a new model that outlines the complex and adaptive nature of the decision-making process. It argues that
decision making is not simply automatic or deliberative but adaptive, based on what is going on around and
within people; that decisions occur along a continuum, where multiple cognitive processes ranging from more
mindful to more mindless are working at the same time. Furthermore, decision-making is regulated by an
adaptive control process in the brain that can dial up more deliberative processing as required. This is deeply
influenced by the context in which decisions are made, as well as by goals, prior associations, and experiences
stored in memory.

So while brand choice is often more mindless and makes use of shortcuts, in many cases, more mindful choices
take over – triggered by context, motivations, emotions, values, or past experiences. Brands can influence these
decision-making processes by triggering ‘conflicts’ that challenge more automatic, mindless choices, or through
interventions that disrupt someone’s automatic impulse, cause them to pay attention, and encourage a more
mindful and possibly different choice. Understanding the ever-changing cultural context and influencing choice
through brand perceptions, experience and identity are key.

Read more in: Dancing with duality: Achieving brand growth in a mindful and mindless world

2. ‘Mental availability’ aids decision-making for both ‘maximising’ and ‘satisficing’

shoppers

‘Mental availability’ – a brand’s accessibility from memory across the range of situations and needs buyers in a
category encounter - is a central tenet of Byron Sharp’s theories of how brand grow. Research into the
psychology of online and offline shopping found that it matters more than ever. Online shopping encourages
‘maximising’ decision-making – where people compare lots of options to seek out the best one, but this can lead
to ‘choice overload’. Brands, including retail brands, help online ‘maximiser’ shoppers by reducing risk and
uncertainty in the absence of physical sensory clues and shortcutting decision-making. Brands also help
‘satisficing’ consumers looking for a ‘good enough’ purchase by reducing effort. In either case, strong mental
availability helps shoppers feel confident and in control.

Read more in: Does mental availability matter in the digital age?
 3. Six key biases can influence online purchase decisions

Google and The Behavioural Architects set out to study how consumers choose to buy one product over
another in an online environment of “abundant choice” and “limitless information”. The study was underpinned
by six key biases identified by behavioural science as influencing purchase decisions:

Category heuristics– key product specs that simplify decisions

Power of now– the longer you wait, the weaker the proposition becomes
Social proof– the power of others’ recommendations
Scarcity bias– as availability decreases, desire increases
Authority bias– trust and expertise can sway decisions
Power of free– a free, even unrelated, gift with a purchase is a motivator

The study included a shopping simulation which varied how brands were represented based on the six biases
and results clearly showed how easily brand preference could be shifted by applying the biases, as the online
environment makes it easy to be curious and explore options with just a click.

Read more in: Navigating the ‘messy middle’ of online consumer decision-making and Decoding
decisions: Making sense of the messy middle

4. Behavioural triggers that address key barriers help shoppers make a purchase
decision

Latent brand equity does not guarantee brands are bought, or even in the consideration set once people are in
front of the shelf where 70% of purchase decisions are made. Brands understand the importance of investing in
awareness but often forget to create a behavioural trigger, without which conversion does not happen. This
behavioural trigger establishes the role brand plays in people’s lives and makes it relevant for them. Without it, a
brand is just another choice in a sea of interchangeable options. The success of shopper marketing lies in
creating an integrated idea with a clear, memorable engagement mechanic that is, at its heart, linked to
purchase e.g. Share a Coke. To create a suitable trigger, brands should look at the five key barriers to
purchase:

Time: personalisation triggers make time spent with the brand meaningful and rewarding.
Convenience: physical triggers can help address the challenges of today’s shopping experience by
understanding and anticipating friction in the main touchpoints of the journey (e.g. search, access, self-
service, subscription, payment, delivery, etc.) and providing the right information, right solution at the right
time on the right platform.
Relevance: occasion-based triggers rooted in specific moments of consumers’ lives can help increase
relevancy and meet individual shopper demands.
Trust: Social proof can serve as a commitment trigger that is very important for overcoming a trust barrier
and helping consumers make a final purchasing decision. This can take the shape of recommendations
from customers, employee advocacy, influencer reviews, or even celebrity endorsements.
Emotional connection: association triggers can create emotionally engaged consumers who are less
price sensitive, less likely to buy from competitors, and three times more likely to recommend and
repurchase.

Read more in: How to make shopper marketing more effective

 5. Too much choice can hinder consumer decision-making about ‘utilitarian’ products

The idea that consumers are always paralysed by an excess of choice is too simplistic – choice overload
depends on the type of product or service being purchased. A study found people tended to demand and prefer
more choice when searching for and choosing a ‘hedonistic’ product than they did for ‘utilitarian’ products.
Utilitarian products typically include necessities such as detergents, toilet roll, milk – but can also include family
cars and laptops – which tend not to generate much emotional response in the buying process. Hedonistic
products are nice-to-have items that generate an emotional response and pleasure – such as perfumes,
designer clothes, jewellery, and sports cars. Utilitarian purchases are also more open to ‘satisficing’ where
picking an option that is ‘good enough’ may be the best option for many people. But even then, the concept of
‘good enough’ will vary from one person to another.

Read more in: New Frontiers in Behavioural Science: When is Choice a Paradox? The evolution of choice
theory

6. Creating effortless decision-making processes has been key to tech giants’ success

The application of behavioural science to create experiences that cost consumers the least cognitive effort has
been central to the success of the FANGs (Facebook, Amazon, Netflix and Google). Techniques such as auto-
completing queries and the use of recommendation engines are derived from aspects of behavioural economics
like System 1 thinking, heuristics and choice satisficing. Creating the right experiences has been the result of
constant, real-world consumer testing. Even something as simple as the shade of blue used to show results in
the Google toolbar is a result of testing over 40 different shades to see what generated the most clicks. This
optimisation is estimated to have generated over $200m in additional annual revenue.

Read more in: How Amazon, Netflix and Google use behavioural science to simplify the user experience

7. Taking unconscious biases into account can improve communication effectiveness

There are a multitude of unconscious biases that influence everyday decision making. Understanding and using
the existing learning about them can help marketers work with the grain of human nature to make better
marketing decisions and create more effective communication, as De Beers have done with diamonds.

When it comes to everyday communications, it’s suggested that seven tools based on unconscious biases are
key to optimisation – choice architecture, salience, anchoring, framing, chunking, cognitive ease and social
norms. These can be applied using a four-step process:

Defining the desired behavioural response

Analysing the context in which communication will be received, read and acted upon
Audit and optimise communication through a behavioural science lens, particularly utilising the seven tools
Pilot and test the optimised version

Read more in: Richard Shotton: why strategists must understand the science of consumer choice, Seven
key behavioural science-based concepts for optimising everyday communications and How to apply
behavioural science to build more effective everyday communications

8. Most decisions are made quickly, using intuition not considered reasoning
Psychologist Daniel Kahneman has identified two mental systems people use to make decisions: System 1
which is fast and largely intuitive and System 2 which is slower and takes more effort. Most decisions are guided
by System 1 and confirmed by System 2. Most System 1 decisions are good enough but are often influenced by
unconscious biases. System 1 is hugely affected by the environment and actions of other people, rooted in
experience and habit, and strongly guided by how people feel. System 2 is highly attention-driven and requires
effort to process information, so people try to avoid it. It’s important to remember that System 1 and 2 are not
separate processes but are complementary and work in tandem to produce more effective and efficient decision-
making.

Read more in: System 1 and System 2 thinking – Debunking myths and re-establishing truths

9. Mental short-cuts and instincts dominate consumer decision making

It is important for brand owners and agencies, to remember that you think about a brand, it's appeal, competitive
context and technical detail, far more thoroughly than a consumer will ever do. Yes, there will be category
enthusiasts who engage with the detail, who seek to optimise their choice, but for most consumers, in most
categories, the decision will be made using some form of 'short-cut', a heuristic or instinctive bias. Research from
Germany shows that these 'shortcuts' are hugely important, but they aren't random, they are created by instincts
that are developed through exposure to relevant messaging across brand touchpoints.

Read more in: First Impressions Count: The power of instant meaning for brand decisions

10. Emotional advertising is effective by tapping into how the brain makes decisions

Market research company System1Research have found that consumer emotional responses to an ad explain
its business success. They tested campaigns for which there was business effect data – from UK industry body
the Institute of Practitioners in Advertising – in their pre-testing system, which gathers emotional response, and
found those with a greater emotional response produced more very large business effects. Emotional
advertising can create memories of good feelings about a brand that act as a quick mental shortcut which
influences future decision-making.

However, others argue that while emotional communication is an effective vehicle because it can increase
attention, recall and sharing, to influence consumer decision making and drive actual sales it needs also to
speak to the consumer’s motivation – their desires, needs, goals or ‘jobs to be done’.

Read more in: Marketing from the heart for growth and How emotion really works in advertising

11. Culture influences consumer decision making

Having established that consumers employ short cuts when making decisions it is worth acknowledging the role
that local culture will play in the creation of bias. It seems reasonable to assume that consumer perception of
issues such as cost or aversion to loss, would be fairly similar the world over – influenced perhaps by wealth
and price of the item but little else. However, research across 11 very culturally diverse countries shows that
perception of risk and loss is hugely influenced by culture with responses varying by as much as 30%. Much of
the existing research around behavioural economics is skewed towards Western economies and brands are
advised to ensure that strategies are culturally adapted.
A study, using an open-ended text analytics methodology, asked consumers to evaluate their shopping
decisions across a number of mostly FMCG categories in seven global markets. It found several cultural
differences. For example, in the USA, and to some extent the UK, decisions were more driven by individual
wants and needs, while in India and Singapore social influences and friends were stronger. In Spain, and to a
lesser extent in Brazil, India and Mexico, the consumer’s mother was an important factor. It also showed different
purchase drivers in different product categories across the markets.

Read more in: Globally irrational, locally rational? Localising behavioural economics for the Asian
market and Is shopping cultured? An exploration into the global language of consumer decision making

12. Decisions are taken at many different points along the customer journey

A great deal of consumer decision making analysis focuses on one specific touchpoint be that in-store, online or
elsewhere. However, because the modern path to purchase is hugely iterative and inter-related, there is
evidence to suggest that looking at touchpoints in isolation is misleading. By looking at multiple touchpoints
there are more opportunities to understand the context of the decision, the influence of issues such as
competitors and emotion – to create a richer picture to inform future planning. One significant barrier to this
happening is the silos in which brand teams often still operate within, a focus on their KPIs rather than the
customer journey.

Read more in: The power of perception: Creating value through integrated touchpoint management

13. Brands can assist consumer decision-making by accounting for the nature of the
category

People organise categories around risk and reward – what’s at stake in making brand choices and how much
enjoyment they get from it. This creates four category types – routine, burden, passion and entertainment – with
different patterns of decision making. Decision journeys will vary in length, touchpoints, motives, perceived
social engagement and the role of emotion and cognition. Passion categories i.e. vacations, organic food or
designer clothing involve high emotion and cognition. Burden categories, such as insurance, tyres, banks and
tax preparation services, tend to induce negative emotion and slow thinking, while entertainment sectors i.e.
beer, cookies, coffee shops and confectionery tend to induce positive emotion and fast thinking. Routine
categories such as deodorant, batteries and trash bags involve some positive emotion but little thinking.

Read more in: Eight lessons to better connect with customer journeys

More on this topic

WARC topic page: Consumer Decision Making

WARC topic page: Shopper Insight

WARC topic page: Purchase Behaviour

WARC best practice: What we know about behavioural economics

Further reading
WARC Webinar: Are consumers eating their feelings? How memory and emotion create stronger brand
connections

WARC Webinar: The Higgs boson of creative effectiveness

WARC Webinar: The effectiveness of the irrational

WARC Webinar: Common objections to behavioural economics

WARC Webinar: Cannes Replay: Is Behavioural Economics worth the hype?

Time to decide: Measuring response time for innovation and brand growth

The role of emotion in human decision-making: Implications for brand success

Disrupting system 1 thinking: Better science for smarter marketing

Brand love? That’s just plain silly

How brand leaders can hold on to their advantage

New frontiers in behavioural science

How food marketers can turn desire into purchases

Building shelf awareness: Quantifying radio’s last-minute influence for FMCG brands

Children’s influence on parental purchase decisions: Scale development and validation

Efficiency can’t equal effectiveness without creativity: DDB

Updating the Foote, Cone & Belding Grid: Revisiting the product classifications of the FCB Grid for
online shopping and contemporary consumers’ decision making

Capturing heterogeneous decision making processes: the case with the E-book reader market

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