How we make purchasing decisions
We make decisions based on what other people say, as well as how we experience a product. There is a major fear amongst consumers (especially in the township) of wasting money on a product that may fail on delivering – hence why 92% of consumers cite word of mouth as the best source for new product ideas. This results in very little initial experimentation, with consumers rather sticking to what they know and trust. For example, many people would rather walk for 20 minutes to buy airtime from Pep than buy immediately from a trader on the roadside. If there is a problem with the airtime, they know Pep will solve it, but the trader won’t – so there’s effectively too much of a risk to not buy from Pep.
Lack of willingness to take a risk on an unknown brand or service, minimizing the risk by the tried and true over something ostensibly ‘new and improved’. Proof of performance is critical as is getting the maximum value for their money i.e. the return on their investment. Reading these two articles linked reminds me so strongly of the purchasing patterns and buyer behaviour observed among BoP customers – the very first time in the townships of South Africa back in January of 2008, that I think I’m going to finally get around to sharing my Life is Hard presentation, and my accompanying talk to go along with the slideset.