Secret decoded behind consumer online decision making
June 20th, 2014
What really takes a consumer to make a purchase still remains a mystery for most companies. While the decisions are entwined with volatile aspects like demographics, personal preferences, cultural specifications, sociological, economic, legal and environmental aspects – psychologists proudly say that most purchase patterns can be related to ‘utility maximization theory’.
What is utility maximization theory
Utility maximization theory states that most consumers make a purchase decision in such a way that they get the greatest value possible from least expenditure. In simple terms, when a consumer buys a product, he/she understands the basic requirements, and matches every competent product with the features and picks the product that closely suffices the requirement.
Relative thinking is the key
According to the psychologists and economists, relative thinking becomes the key in taking a purchase decision. Consumer makes a decision based on the relative prices of the products rather than understanding if the product is worth the price claimed. To understand the phenomenon better, Strategic Marketing Services has conducted an online study on a third party platform. In this experiment, the consumers were given three options to buy the same product. Option A being the lowest and C being the highest. The heat map patterns observed seemed fascinating.
Based on the heatmap metrics most of the consumers either picked Option A or Option C than Option B. However, when we dropped the Option B, we observed that more consumers picked the least priced option rather than the best one.
Can we drop the option B?
Option B acts as a catalyst in making the consumer spend more on a product rather than getting the free services. In the context, when the consumer sees three options and finds that there are two options, which are financially almost equal, they try to weigh the product specifications. So, the trick here is to price the option B and C in such a way that option C is slightly more priced than the second best option B. This makes the consumer feel that they’ve got much more than actual price.
So regardless of the product or service a company is selling, [tweetable] giving the consumer three options is the best way to make the consumers buy the best of the lot.[/tweetable]