{"id":7305,"date":"2020-01-29T18:21:51","date_gmt":"2020-01-29T22:21:51","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=7305"},"modified":"2022-03-30T15:44:25","modified_gmt":"2022-03-30T19:44:25","slug":"how-consumers-make-buying-decisions","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/how-consumers-make-buying-decisions\/","title":{"rendered":"Psychology of How Consumers Make Buying Decisions, Revealed"},"content":{"rendered":"\n<p>How do consumers make purchasing decisions? As a buyer, are you aware of your <a href=\"https:\/\/www.shortform.com\/blog\/methods-of-decision-making-crucial-conversations\/\">decision-making<\/a> process when you decide to buy something? As a seller, how can you exploit the psychology of how consumers make <a href=\"https:\/\/www.shortform.com\/blog\/buying-decision\/\">buying decisions<\/a>?<\/p>\n\n\n\n<p>We&#8217;ll cover how consumers make buying decisions and why, in order to <a href=\"https:\/\/www.shortform.com\/blog\/how-to-sell-a-product\/\">sell your product<\/a>, you need to connect with buyers at the gut level. Learn why buying decisions aren&#8217;t always rational.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">How Consumers Make Buying Decisions: <strong>They Trusting Their Gut<\/strong><\/h2>\n\n\n\n<p>How do consumers make purchasing decisions? It has to do with the <a href=\"https:\/\/www.shortform.com\/blog\/simon-sinek-golden-circle\/\">Golden Circle<\/a>.<\/p>\n\n\n\n<p>The reason The Golden Circle works is that the different levels (WHAT, HOW, and WHY) correspond with different levels of the brain: specifically, the neocortex and the limbic brain.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>The neocortex <\/strong>is our analytical center that controls <a href=\"https:\/\/www.shortform.com\/blog\/what-is-rational-thought\/\">rational thought<\/a> and language. This corresponds to the WHAT and HOW level of The Golden Circle.&nbsp;<\/li><li><strong>The limbic brain<\/strong> controls our feelings, like trust and loyalty, but it doesn\u2019t have any capacity for language. It also handles our decision-making processes. This corresponds to the HOW and WHY levels of The Golden Circle.&nbsp;<\/li><\/ul>\n\n\n\n<p>Because the limbic brain doesn\u2019t use language, it makes <strong>it hard for us to put our feelings into words<\/strong>. <strong>It\u2019s why we have a hard time talking about the decisions we make. <\/strong>When a choice \u201cfeels\u201d right, when we <a href=\"https:\/\/www.shortform.com\/blog\/be-decisive\/\">make a decision<\/a> based on a \u201cgut feeling,\u201d it\u2019s because we\u2019re using our limbic brain. This is how consumers make buying decisions. Once the decision gets made, our neocortex swoops in to try and verbally articulate the way we feel.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>For instance, many may describe their romantic relationship with \u201cshe completes me\u201d or \u201cit feels right.\u201d These statements don\u2019t make rational sense, but they feel inexplicably true.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Do Consumers Make Purchasing Decisions?<\/strong><\/h2>\n\n\n\n<p><strong>To put it simply: decisions start in our limbic brain, and then we articulate and rationalize them using our neocortex. <\/strong>The WHY is how you win a customer\u2019s \u201cheart,\u201d and afterward the WHAT and HOW is how you win their \u201cmind.\u201d This is how consumers make buying decisions.<br><\/p>\n\n\n\n<p>When you start with why, you target the emotional gut part of a person\u2019s brain. While making decisions by gut may sound wishy-washy, the limbic brain is actually powerful.<strong> <\/strong>Studies suggest <strong>our gut instinct leads to better, faster <a href=\"https:\/\/www.shortform.com\/blog\/integrative-decision-making\/\">decision making<\/a>. <\/strong>That\u2019s because when<strong> <\/strong>we use our neocortex to make decisions, we often end up overthinking them. We try to rationalize our decisions, which often leads to poorer choices.&nbsp;<br><\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Examples of How Consumers Make Buying Decisions<\/h4>\n\n\n\n<p>Let\u2019s compare rational and gut decision making with example scenarios:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>A Rational Decision: <\/strong>Imagine you\u2019re buying a new television. The sales clerk gives you all the rational, data-driven reasons you should buy a certain model, so you do. But later that day, you run into a friend who has a different television that he loves. Now, you\u2019re not sure whether you made the right decision at all. That\u2019s because you made a choice based only on your neocortex.&nbsp;<\/li><li><strong>A Gut Decision: <\/strong>For brands that have strong WHYs, people don\u2019t need to articulate their reasons for buying a product. The WHY becomes the reason for the buy. The brand resonates with you emotionally, which makes you confident in your purchase choice. This is the case for people who are passionate Mac users. Their <a href=\"https:\/\/www.shortform.com\/blog\/buying-decisions\/\">decision to buy<\/a> a Mac originates in their limbic brain, not their neocortex.<\/li><\/ul>\n\n\n\n<p>This is how consumers make buying decisions: while we can make decisions with our rational brains only, we are often less confident in our choices. That happens when a company sells us on their WHAT.<br><\/p>\n\n\n\n<p>But WHY connects to a deep, emotional part of ourselves. <strong>WHY leads people to make decisions based on their gut instinct, which in turn helps them feel more confident and satisfied with your choice<\/strong>.&nbsp;<br><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Gut Decisions are Hard to Explain<\/strong><\/h2>\n\n\n\n<p>Because <a href=\"https:\/\/www.shortform.com\/blog\/gut-decision\/\">gut decisions<\/a> are hard to articulate, <strong>when your customers explain their decisions, they point to factors that might be misleading for you to act on<\/strong>. Knowing how consumers make buying decisions, don&#8217;t trust their rationalizations.<br><\/p>\n\n\n\n<p>For example, people explaining why they bought a Mac may point to the screen resolution and the features, but really it was a gut, emotional decision based around Apple\u2019s mission.<br><\/p>\n\n\n\n<p>This is a red herring for companies &#8211; <strong>just because people explain their decisions in terms of features doesn\u2019t mean giving more features will sway them<\/strong>. In fact, often asking people what they want is misleading. As Henry Ford said, \u201cif I\u2019d asked people what they wanted, they would have said a faster horse.\u201d This is the pitfall that WHAT companies compete on, and they commoditize their products by focusing on easy-to-replicate features. Keep in mind how consumers make buying decisions.<br><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Buying Decision <strong>Example: Laundry Detergent<\/strong><\/h2>\n\n\n\n<p>Laundry detergent companies spent years competing on how clean they can get your clothes. Market research showed that people said they were looking for the detergent for the cleanest clothes. Built on this research, brands competed on how well they actually cleaned clothes, experimenting with proprietary additives.<\/p>\n\n\n\n<p>But what people <em>actually<\/em> wanted was different. Later research showed that people weren\u2019t interested in the detergent that literally got their clothes the cleanest. <strong>Instead, they wanted a product that made clothes <em>feel <\/em>the cleanest. <\/strong>The first action after taking laundry out of the dryer wasn\u2019t to inspect it for cleanliness, it was to smell it. The <em>feeling <\/em>is stronger than the <em>fact.&nbsp;<\/em><\/p>\n\n\n\n<p>This revelation changed the grounds of competition for laundry detergent. They know understood how consumers make buying decisions.<br><\/p>\n\n\n\n<p>When you start with WHY, you don\u2019t have to have the best, cheapest, most wonderful product. <strong>The <a href=\"https:\/\/www.shortform.com\/blog\/create-a-sense-of-belonging\/\">sense of belonging<\/a> is a powerful driver that can overcome minor differences in quality<\/strong>.<br><\/p>\n\n\n\n<p>Loyal customers stick with companies, even when their products are more expensive than their competition (Apple) or take a long time to deliver (Harley-Davidson).&nbsp;<br><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Starting With WHY Creates Lasting Success<\/strong><\/h2>\n\n\n\n<p>How do consumers make purchasing decisions? They go with their gut. And you can sway a consumer&#8217;s decisions by being clear about your WHY.<\/p>\n\n\n\n<p>Working The Golden Circle from the inside out &#8211; starting with WHY &#8211; <strong>provides a path to long-term success<\/strong>. It provides a mix of innovation and flexibility that allows a company to adapt to changing circumstances.<br><\/p>\n\n\n\n<p>Take railroads, for example. In the late 19th century, railroads were some of the biggest companies in America. Their early innovations changed the landscape of the country.&nbsp;<br><\/p>\n\n\n\n<p>But over time, railroads lost sight of their WHY and instead began focusing on WHAT they were. Instead of defining a WHY of \u201cmoving people affordably,\u201d they focused on the WHAT of \u201crailroads and trains.\u201d<br><\/p>\n\n\n\n<p>So when the airplane was introduced, many of those big railroad companies went out of business. If they\u2019d kept sight of their WHY, the outcome might have been different. They might have realized technology was changing and switched to a better WHAT to meet their WHY. In order to act on how consumers make buying decisions, you need to <a href=\"https:\/\/www.shortform.com\/blog\/know-your-why\/\">know your WHY<\/a>.<br><\/p>\n\n\n\n<p>This example demonstrates one of the dangers of using The Golden Circle from the outside in. When you lead with WHAT, you become vulnerable to new technologies and trends. It makes it hard for people to see why your products or services have value in the face of change.&nbsp;<br><\/p>\n\n\n\n<p>This is true for newspapers, publishing, even television. <strong>Starting with WHY does more than help you adapt&#8211;it helps you innovate, which is the key to lasting success. <\/strong><strong><br><br><\/strong><\/p>\n\n\n\n<p>Two other reasons that starting with WHY leads to long-term success:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>A WHY is defensible because it generates loyalty. A competitor could copy your WHAT and put out a similar product, but it can\u2019t easily replicate your WHY and rip away your loyal followers.&nbsp;<\/li><li>If you don\u2019t have a WHY, you become a commodity producing a WHAT, and you\u2019re forced to compete on WHAT factors like price, features, or quality. It becomes hard to succeed on these fronts in the long term.<\/li><\/ul>\n\n\n\n<p>Understanding how consumers make buying decisions can help you develop a WHY that resonates with them.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How do consumers make purchasing decisions? As a buyer, are you aware of your decision-making process when you decide to buy something? As a seller, how can you exploit the psychology of how consumers make buying decisions? We&#8217;ll cover how consumers make buying decisions and why, in order to sell your product, you need to connect with buyers at the gut level. Learn why buying decisions aren&#8217;t always rational.<\/p>\n","protected":false},"author":4,"featured_media":7324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,9],"tags":[70],"class_list":["post-7305","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-psychology","tag-start-with-why","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Psychology of How Consumers Make Buying Decisions, Revealed - Shortform Books<\/title>\n<meta name=\"description\" content=\"How do consumers make purchasing decisions? 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