The Customer Decision Tree

Customer Decision Tree


The Customer Decision Tree is a simple and effective way to approach product sourcing and assortment building. This method requires a vendor to put themselves in a consumer's shoes. We may think, "Seems simple enough, I buy things all the time", but may fail to recognize how specific a customer decision tree may be to a certain category. For example, the customer decision tree for a pack of gum is vastly different from that of buying a premium grill. Intuitively, we can already start thinking of the factors that may sway a customer to buy from a certain model/brand, or to even buy a product in the first place. 

  • Urgency/Need-.If a customer’s child informs them of a last minute diorama of a plant cell due tomorrow, they won’t have the luxury to pick out crafts or look for certain materials. Their options would be limited, and since they likely need that cellulose wall to pass science, other product details like price and brand will be less important.  
  • Seasonality/Trends- whether it’s for the changing of the seasons or to follow a social media trend, customers will make time-specific decisions and purchases. We will talk more about seasonality in the Forecast It section, but it is important to recognize these fads and changes in order to have a relevant and appealing assortment 
  • Complements- some products have accessories or similar items that can enhance the original product. If a customer just bought a new bike, they might want to also buy a helmet and lock. 
  • Consumables or durables- durables are purchased regularly (weekly/monthly), often at a low cost. Durables are bigger purchases made once in a while (yearly, every few years). When purchasing consumables, customers often do less research because if they don’t like the product, they can try another one next time they purchase. When purchasing durables, customers are more likely to do extensive research, compare products, and wait for sales in hopes of rationalizing the higher sticker price. Vendors should be conscious of this difference in pre-purchase research and provide enough information for their product to be considered. We discuss this information in the Display It section. 
  • Price- we will talk a bit about price in the Price It section. Very simply, the lowest price usually wins. However, if a brand or product can advertise and convince customers it is better than the lowest cost option (through quality or features), they may have a dedicated consumer base willing to pay extra. In either case, there is a market for both, allowing many brands to exist for a single item. 
  • Brand- a brand’s reputation could be a determining factor in a customer’s purchase. If a brand is able to ensure consistent quality products, customers are sure to respond by choosing the brand (and maybe even paying a bit extra for it) 
  • Design- depending on the category, features like color or shape may not matter to a customer, and other factors will prevail. However, other categories like home decor or kitchen appliances are all about aesthetics, and the customer will buy the product that reflects their personal style and preferences 
  • Specificity- if a product only uses a certain type of pod (VERTICAL INTEGRATION) then you’re probably SOL unless you can make a working substitute. if a customer’s car breaks down, they will most likely need a specific part for a specific make and model
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