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Organizations should develop a thorough understanding of a number of aspects of their customers’ buying processes, in particular:

• Who is involved in making the purchase decision?
• How long does the process of making a decision take?
• What is the set of competing services from which consumers make their choice?
• What is the relative importance attached by decision makers to each of the elements of the service offer?
• What sources of information are used in evaluating competing service offers?

Simple models of buyer behavior usually see some underlying need triggering a search for need-satisfying solutions. When possible solutions have been identified, these are evaluated according to some criteria. The eventual purchase decision is a consequence of the interaction between the final decision maker and a range of influencers. Finally, after purchase and consumption, the consumer develops feelings about their purchase which influence future decisions. In reality, service purchase processes can be complex iterative processes involving large number of influencers and diverse decision criteria. Needs can themselves be difficult to understand and should be distinguished from expectations. The intangible nature of a service and the general ability of buyers to check the quality or nature of a service until after it has been consumed adds to the importance of understanding the sources of information which are used in the process of evaluation.

Need Recognition

The buying process is always triggered by an underlying need. That need motivates us to seek a solution which will restore a sense of physiological and psychological balance which was previously absent. Needs can be extremely complex and are no longer dominated by basic physiological needs. The service industry has benefited from the tendency for societies to climb to higher levels of Maslow’s Hierarchy of Needs. Among consumer services, a high proportion of new expanding sectors would appear to be catering for individuals’ social and self-actualization needs. Mobile phones, flower delivery services and long-haul travel are long way from satisfying our basic needs, but are typical of the sectors that have expanded rapidly in recent years by satisfying customers’ higher order needs.

In addition to our inherent physiological and psychological needs, our needs are influenced by the situation in which we currently find ourselves. The subjects of age and socioeconomic status can have profound effects on buying behavior. The stage that an individual has reached in the "family life cycle" also has a significant influence on needs.

As well as being physically intangible, many services may be mentally intangible. For instance, few young people recognize an underlying need for old-age security which a pension will provide. Such people may only purchase a pension policy if they become aware of the product. Prior to this, they may not have been aware of the underlying need which a pension policy seeks to satisfy.

Information Sources

In the classic model of buyer behavior, the next stage in the process is to collect information about services which are capable of satisfying the underlying need. These can be divided into two basic sources: those which are dominated by the service provider and those which derive from other sources.

Once a need has triggered the search for need-satisfying solutions, a search for information will begin. In the case of making routine repurchase of a familiar service, probably very little information is sought about the product. But where there is a greater element of risk, buyers are likely to seek out more comprehensive information about the alternative ways in which they can satisfy their needs.

• Personal experience will be a starting point, so if a buyer has already used a company’s products, the suitability of the proposed purchase may be assessed in the light of the previous purchases.
• Word-of-mouth recommendation from friends is important for many categories of services where an individual may have no previous need to make a purchase. When looking for a plumber or solicitor, for instance, many people will initially seek the advice of friends.
• Rather than referring to individuals on a face-to-face basis, we may use various other reference groups to guide us.
  • Newspaper editorial content and business directories may be consulted as a relatively objective source of information.
  • Advertising and promotion in all of its forms is studied, sometimes being specifically sought and at other times, being casually seen without any search activities involved.
  • Increasingly, customers are using the Internet to find information about the alternatives available. There is evidence that within the travel sector, consumers are undertaking extensive "surfing" of the web to establish information about a resort and the alternative means of getting there, even through the Internet may not be used as a medium for booking the holiday.

The greater the perceived risk of a purchase, the longer and more widespread the search for information. Of course, individuals differ in the extent to which they are prepared to methodically collect information. Some may make a purchase more impulsively than more calculating individuals, reflecting their lower risk threshold, lower level of involvement or greater familiarity with that type of purchase.

Evaluation of Alternatives

By the time all possible competing alternatives have been reduced to a smaller shortlist, many possibilities have been discarded along the way. This may be simply due to poor awareness of a product’s existence, or an inability to acquire sufficient information about it. Even allowing for services which a consumer has not become aware of, they will probably be left with too many choices to evaluate each one individually in detail. It is therefore usual to base evaluation on a set of a small number of alternatives, which will be subjected to a more detailed competitive analysis.

Can we have too much choice? Making decisions involves effort and the psychological anxiety that we might have made the wrong decision. Limiting our choice is therefore a natural reaction. Ideally, we would like to be presented with just one choice that reflects our needs perfectly. Increasingly, with the use of databases, companies are able to limit the range of choice presented to each individual, so that only those options likely to appeal are presented.

The term "confusion marketing" has been used to describe the practice of certain service providers. In an ideal world, we would all be able to evaluate the options open to us and make a rational choice from the available options. We might still appear to act irrationally by placing a high value on a service feature which someone else would regard as frivolous. But when there is an enormous choice and service providers appear to go out of their way to confuse buyers, buyers will be overwhelmed at the choices available to them. For instance, in mobile phone services, the tariff plans offered by the phone companies seem unbelievably complex, with an array of peak/off-peak price plans, "free" inclusive minutes and discounts for loyalty. In this case, the phone companies may confuse the buyers with low "headline" prices and a confusing range of supplementary prices. However, this approach could reflect a concern to segment markets so finely that every buyer’s preferences are catered for.

The Decision Making Unit (DMU)

Few service purchase decisions are made by an individual in total isolation from other people. Usually, other people are involved in some role and have a bearing on the final decision. It is important to recognize who the key players in this process are, in order that the service format can be configured to meet these players’ needs, and that promotional messages can be adapted and directed at the key individuals involved in the purchase decision. In reality, people play multiple roles in this process, sometimes switching between roles.

• Influencers are people or groups of people who the decision maker refers to in the process of making a decision. Reference groups can be primary (e.g. friends, acquaintances and work colleagues), or secondary in the form of remote personalities with whom there is no two-way interaction. Where research indicates that the primary reference group exerts major influence on purchase decisions, this could indicate the need to take measures which will facilitate word-of-mouth communication, perhaps by giving established customer rewards in return for the introduction of new customers. An analysis of secondary reference groups used by consumers in the decision process can be used in a number of ways. It will indicate possible personalities to be approached who may be used to endorse a product in the company’s advertising. It will also indicate which opinion leaders an organization should target as part of its own communication programme in order to achieve the maximum "trickle-down" effect. The media can be included within this secondary reference group — what a newspaper writes in it columns can have an important influence on purchase decisions.
• Gatekeepers are most commonly found among commercial buyers. Their main effect is to act as a filter on the range of services which enter the decision choice set. Gatekeepers can take a number of forms — a secretary barring calls from sales representatives to the decision maker has the effect of screening out a number of possible choices. In many organizations, it can be difficult to establish just who is acting as a gatekeeper. Identifying a marketing strategy which gains acceptance by the gatekeeper, or bypasses them completely is therefore made difficult. In larger organizations and the public sector in particular, a select list of suppliers who are invited to submit tenders for work may exist. Without being on this list, a provider of services is unable to enter the decision set. Although gatekeepers are commonly associated with the purchase of services by business organizations, they can also apply to private purchases. In the case of many household services, an early part of the decision process may be the collection of brochures or telephoning to invite quotations for a service. While the final decision may be the subject of joint discussion and action, the initial stage of collecting the decision set is more likely to be left to one person. In this way, a family member picking up holiday brochures acts as a gatekeeper for their family, restricting subsequent choice to the holidays of those companies whose brochures appealed to him or her.
• In some cases, ordering a service may be reduced to a routine task and delegated to a buyer. In the case of business-to-business services, low-budget items which are not novel may be left to the discretion of the buyer. In this way, casual window cleaning may be contracted by a buying clerk within the organization without immediate reference to anybody else. In the case of modified rebuys, or novel purchases, the decision-making unit is likely to be larger.
• The users of a service may not be the people responsible for making the actual purchase decision. This is particularly the case with many business-to-business service purchases. Nevertheless, research should be undertaken to reveal the extent to which users are important influencers in the decision process. In the case of the business air travel market, it is important to understand the pressure which the actual traveller can exert on their choice of airline, as opposed to the influence of a company buyer (who might have arranged for a long-term contract with one particular airline), a gatekeeper (who may discard promotional material relating to new airlines), or other influencers within the organization (e.g. cost center managers who might be more concerned with the cost of using a service, in contrast to the user’s overriding concern with its quality).
• The decision maker is the person (or group of individuals) who makes the final decision to purchase, whether they execute the purchase themselves or instruct others to do so. With many family-based consumer services, it can be difficult to identify just who within the family carries most weight in making the final decision. Within any particular service sector, an analysis of how a decision is made can only realistically be achieved by means of qualitative indepth research. In the case of decisions made by commercial buyers, the task of identifying the individuals responsible for making a final decision — and their level within the organizational hierarchy becomes even more difficult.

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