A paper originally presented to the PMSA Global Knowledge Conference,
Monday May 10, 2004,
Midrand, South Africa.
Published here January 2005.

Introduction | The Project | Project Management Processes | Progress
Things Start to Go Wrong | Workshop Outcome | Next Steps | What Went Wrong?
The Purchase Process and Buyer's Remorse | Suggestions to Avoid Similar Situations
Commentary | Issues for Discussion

The Purchase Process and Buyer's Remorse

It is worthwhile trying to understand what caused the Client to have so little confidence in the upgraded software. The Client Project Manager had said all along that he was happy with the current version of the software. There should surely not have been any reason for him to doubt that the upgrade would suit his business needs?

Consumer decision-making is depicted in distinctly different ways.[4] The term "model of consumers" refers to a general view or perspective as to how (and why) individuals behave as they do. Specifically, there are models of consumers in terms of four views that will be examined.

The Economic View

In this view, the consumer makes rational decisions by being:

  • Aware of the alternatives
  • Capable of correctly ranking each alternative
  • Able to identify the best alternative

It is clear from what transpired in this project that an economic view was not adopted.

The Passive View

This view is quite the opposite of the economic view and it depicts the consumer as basically submissive to the self-serving interests and promotional efforts of the marketers. In this project the SP approached the Client and suggested an upgrade. The Client did not look at alternatives. The Client Project Manager, who claimed to be completely ignorant of any alternative systems, confirmed this.

The Cognitive View

This view portrays the consumer as a thinking problem-solver, actively searching for products or services. The consumer is generally unwilling to engage in extensive decision-making activities and will settle, instead, for a "satisfactory" decision, one that is "good enough".[5] The cognitive view falls between the economic and passive views. Here the consumer does not (or cannot) have total knowledge about available product alternatives and therefore cannot make perfect decisions. Instead he/she actively seeks information and attempts to make satisfactory decisions based on that information.

The Emotional View

When a consumer makes an emotional purchase decision, less emphasis is placed on the search for pre-purchase information. Instead, more emphasis is placed on current mood and feelings. The decision to proceed with the upgrade was taken after the Client's business objectives had been identified. Tough targets had been set and it was decided that there was an urgent need to upgrade the computer system in order to help the organization reach its goals.

The Client did decide that the current system was the only choice. Interestingly enough, when doubt set in and the project went "on hold", the Client MD was asked why he was still considering the SP system. He replied, "our relationship with the SP is the most important thing and I will do my best to make sure it stays". Why would the above views have a bearing on a project or its delivery? Figure 5 shows the four views, represented in red or green depending on its potential affect on the project.

Figure 5: Model of consumer views
Figure 5: Model of consumer views

A consumer with a red view is a bigger risk and this must be taken into consideration by the sales or after-sales team. This consumer will need support and reassurance. The reason is that these categories of consumers have little or knowledge of what is available elsewhere and this can lead to doubt setting in as they learn more about competitor products.

As consumers use or are exposed to a product, they evaluate its performance in the light of their expectations. The longer this takes, the greater the chance the Client will have to second-guess the original decision. There are three possibilities here. Performance can match, exceed or be below expectations.[6]

An important component of post purchase evaluation is the reduction of uncertainty or doubt that the consumer might have had about the selection. As part of their post purchase analyses, consumers try to reassure themselves that their choice was a wise one; that is, they attempt to reduce post purchase cognitive dissonance.

What can be done to mitigate the risk? An experiment was conducted that focused on the effects of regret following a consumer's decision to go ahead with a purchase.[7] In 1970, Donnelly and Ivancevich conducted an experiment to study buyers from two car dealerships. Each of these customers had made a commitment to buy a car and the study sought to determine how many of these buyers would back out of the deal before the car was delivered.

Donnelly and Ivancevich hypothesized that buyers experienced post decisional dissonance between the time they decide to buy a car and the time the car was delivered to them. As a way to reduce this dissonance, some buyers changed their decision to buy the car. In other words, post decisional dissonance had resulted in lowering the attractiveness of buying a car for some buyers and the changing of their original decision was a dissonance-reducing method.

The experimenters then sought to reduce dissonance for several of the buyers by having a salesman call the buyer a few times after the initial sale. The salesman would speak favorably about the car sold, and reassured the customer that he/she had made the right decision. The experiment was set up so that one group of buyers received the courtesy calls from the salesman while a control group did not receive this dissonance reducing phone calls.

The results of the study tended to confirm the hypothesis of the study authors. Those buyers who did not receive the follow-up calls were more likely to rescind their decisions than those who were in the positive follow-up group. In effect, only 2.5% of those buyers who received the courtesy phone call rescinded their decision to purchase the car while 6.4% of those who did not get the phone call backed-out of their initial purchase decision. This study illustrates the importance of positive reinforcement as a means of dissonance reduction as shown in Figure 6.

Figure 6: Experiment – changing mind after purchase
Figure 6: Experiment changing mind after purchase

For the project in this case study, the Client had a "risk rating" of red, which meant that it needed to be looked after. The sales team should have kept in touch and provided re-assurance all along the way. This did not happen at all and the project team was the only contact that the Client had with the SP until it was too late.

What Went Wrong?  What Went Wrong?

4. Schiffman, L, & L. Kanuk, Consumer Behavior, 6th ed. Prentice Hall, Upper Saddle River, NJ, 1997, pp560-561, 582
5. March, J. & H. Simon, Organizations, Wiley, New York, 1958, pp140-141
6. Olskavsky, R., Towards a More Comprehensive Theory of Choices, in E. Hirschman and M. Holbrook, (eds) Advances in Consumer Research 12 (Provo, UT: Association for Consumer Research), 1985, pp465- 70
7. Donnelly, J, and J. Ivancevich, 1970. Post-purchase reinforcement and back-out behavior, Journal of Marketing Research, 7, pp399-400
 
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