What motivates customer’s to buy new ideas and innovations?

A customer’s decision to purchase generally follows a five-step sequential process:

1.  Problem recognition – the purchase process begins when the buyer recognises a need or a problem to solve.

2.  Information search – the buyer then actively searches for information about how to fulfil the need or solve the problem.  This usually takes the form of identifying alternatives that solve the problem.

3.  Evaluate alternatives – there are six factors that customers consider in their evaluation of alternatives that may include new ideas and innovations.  From a customer’s perspective the decision to purchase a new technology is high-risk and customers don’t want to make bad or wrong decisions, usually because of market or technological uncertainty, switching costs and training needs.   You should understand these six factors and be prepared to articulate how your innovation measures against them.

Table 1 – Six Factors Affecting Customer Purchase Decisions1

1. Relative Advantage The benefits of adopting the new technology compared to the costs
2. Compatibility The extent to which adopting and using the innovation is based on existing ways of doing things and standard norms
3. Complexity How difficult the new product is to use
4. Trialability The extent to which a new product can be tried on a limited basis
5. Ability to communicate product benefits The ease and clarity with which the benefits of owning and using the new product can be communicated to prospective customers
6. Observability How observable the benefits are to the consumer using the new product

Using all or some of these criteria the buyer, whether consciously or not, will form opinions about the desirability of the different alternatives, so you should assess these simple factors carefully to understand how quickly your innovation will accelerate in the marketplace.

Merely assuming your customers will understand the usefulness of the innovation is not sufficient.  Your sales and marketing efforts must include the various messages that communicate how your innovation responds to these six factors.

4.  Purchase decision – Once the buyer has made a decision on the best alternative that suits their needs, they will reach agreement with the seller on the terms of the sale and take receipt of the new innovation.

5.  Post-purchase evaluation – Having purchased the innovation, the buyer will assess whether it has realised its potential or expectation.  A buyer’s response at this stage will likely determine what sort of relationship they will have with you and your innovation into the future.

1 Rogers, E., Diffusion of Innovation, Free Press, New York, 1983.

Links to subsections of this topic

What motivates customer’s to buy new ideas and innovations?
What are the categories of customers that buy new ideas and innovations?
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