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The Three Factors That Affect Consumers' Purchase Decisions

February 2008, Auto Dealer Today - WebXclusive

by Tom Herald - Also by this author


Why do people decide to buy? Some consumers use an intense system of thorough investigation before they decide to purchase, while others are basic impulse shoppers. Either way, three factors affect all purchasing decisions. Retailers should be familiar with the impact each factor has on the minds of consumers. A thorough understanding of the interdependency of each factor will help you market your inventory better, attract more customers and close more deals.

Apple, Inc. was flawless in their execution when they rolled out the new iPhone and iTouch because they knew what made consumers act. They knew the emotional hot buttons. They knew how to create enough excitement about a new line of entertainment gear that for many, a simple “want” transformed into a self-justified, immediate need. The iPhone and iTouch hit the market with a fury like the Running of the Bulls and Apple’s stock skyrocketed. So did the net worth of Steve Jobs, a hard-charging and creative businessman who understands the consumer.

If you want a better understanding of how consumers act, implement these three factors into your marketing and sales plans:

The Economic Factor – This is the foundation of a purchasing decision. People can’t buy what they can’t afford no matter how badly they need it or want it. However, affordability is often a matter of perspective, which would explain why so many consumers use “creative” budgeting to get the things they really want. This practice has led to the special finance market and a struggling mortgage industry, and it has you reading this article.
In our business, the economic factor is represented in the terms of down payments and monthly payments. You will be better served to hold your considerations of this most basic of the three factors to the end, long after you’ve gained the attention and interest of your prospects. Otherwise, you will run into the common scenario of “these customers have no money” problems. To stay off that road, focus on the other two factors first.

The Functional Factor – The functional factor is all about needs. It’s about logic, what makes sense and the best interest of the customer. Although it too plays an important role in the decision to buy, it is the boring factor and typically doesn’t affect emotional appeal.

That being said, the functional factor is perhaps the most important of all three when it comes to special finance. A dealer must set the customer up for success and not for failure. It is much too easy to get a customer excited about a vehicle that is out of their price range and/or does not meet their needs. A dealer with a strong special finance program is able to weave logic into the equation and convince the customer to do what is in their best interest by taking time to learn and understand their needs first. 

If you take the time to uncover the needs with a thorough analysis, you will build more rapport and be much more likely to earn the customer’s trust in the process. Then, when you introduce the logical choice later in the sale, your customer will be more apt to follow your advice and direction rather than seeing you as just another fast-talking salesperson.

The Psychological Factor – All effective advertising appeals to emotion, or the psychological side of the sale. The psychological factor is all about what the customer wants. To divert the customer from the “wrong” vehicle and effectively bypass price, a special finance salesperson must introduce the psychological elements of the sale early in the process. One effective method that I recommend is to show the customer the merits of establishing or re-establishing a positive credit score. To be effective, you have to build the vision of an easier life for them with good credit, and then, get their buy in.

Personal image is also an important emotional hot button. Having an iPhone is a social statement. Likewise are having a nice car and home. People want the best they can afford and, more often than not, the best they can’t afford. That’s why the most powerful commercials focus on image and not price. Image, fear, wants and dreams are all powerful emotional forces that drive the decision to buy. If used in a timely fashion, they will be the forces behind higher down payments and profit.

Special Finance Insider Vol. 2, Issue 1


  1. 1. josh [ May 07, 2015 @ 09:48AM ]

    this didn't help me at all with my work

  2. 2. Fred [ May 16, 2015 @ 02:20PM ]

    yeah ^

  3. 3. ashyra [ August 24, 2015 @ 06:37AM ]

    somehow it did give me info>tsk

  4. 4. Jamie [ September 22, 2015 @ 01:52AM ]

    sup nros i like grass sexualy

  5. 5. Sad James [ September 22, 2015 @ 02:21AM ]

    Jamie has broken my heart and now im suicidal.

  6. 6. PAUL EBENER [ October 12, 2015 @ 10:11PM ]


  7. 7. Emily [ December 19, 2015 @ 12:51PM ]

    i didn't get what i need on dis page

  8. 8. daisha [ March 02, 2016 @ 06:08AM ]

    i couldn't find anything i needed and hey hannah

  9. 9. Victor [ April 21, 2016 @ 03:01AM ]

    thanks for the effort but you can improve them to address the intended area.

  10. 10. Dennis [ April 27, 2016 @ 04:23AM ]

    <----just starting in the auto business, this article elaborated on these basic priniciples. Speaking just for me, I liked it and understood it well. It made sense.

  11. 11. ASHLEIGH [ May 03, 2016 @ 05:01PM ]


  12. 12. mary [ May 22, 2016 @ 12:14AM ]


  13. 13. felix [ August 24, 2016 @ 04:36AM ]

    at least I got three factors for my project

  14. 14. timmy [ August 26, 2016 @ 10:26AM ]

    this site do not help at all so i wanted be visiting this site nomore ever

  15. 15. Ted poulos [ October 16, 2016 @ 08:43AM ]

    It put the first factor (affordability) last and the last (desire) first

  16. 16. OceanGirl696969 [ October 31, 2016 @ 08:15AM ]


  17. 17. harry [ January 04, 2017 @ 10:55AM ]

    yall are some dicks

  18. 18. Bob [ January 20, 2017 @ 08:31AM ]


  19. 19. Bob [ January 20, 2017 @ 08:33AM ]


  20. 20. bruh [ March 02, 2017 @ 08:25AM ]


  21. 21. Adrianna [ March 10, 2017 @ 06:53AM ]

    No help at all

  22. 22. Adrian [ March 19, 2017 @ 01:13AM ]

    did help me

  23. 23. Hillard [ March 30, 2017 @ 10:28AM ]


  24. 24. Estapha Elligara [ March 30, 2017 @ 01:06PM ]

    Hero, mie nem is estapha and i wnt to sat new clesh of clanes chanell i jst relly ned to so plz halp me. It wil be ta mot powerfel clane eva

  25. 25. Jazzy [ April 07, 2017 @ 05:01AM ]

    It did not help me get two factors

  26. 26. Jazzy [ April 07, 2017 @ 05:05AM ]

    It actually helped me

  27. 27. Sandra [ April 17, 2017 @ 04:05PM ]

    This is true. About 60% or better customers today know more about the sale process then most sales reps. They do their research and they know when they are being played. Never try to push a vehicle on a customer when they are not sure. ALWAYS make the customer feel welcomed. If he/she did not buy this time, they will when time is right. ALWAYS GIVE GREAT CUSTOMER SERVICE! As a BDC manager this makes a lot of sense.

  28. 28. noname [ April 24, 2017 @ 05:21PM ]

    what this is not helpful

  29. 29. lol [ July 04, 2017 @ 12:29AM ]

    this didnt help at all

  30. 30. polo [ September 20, 2017 @ 08:53AM ]


  31. 31. colin yarbrough [ September 26, 2017 @ 08:50AM ]

    hell yea

  32. 32. Kim Jong Um [ October 20, 2017 @ 05:53AM ]

    Hail North Korea


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