Marketing and Sales

Understanding your customer's key purchasing criteria


Whenever a customer makes a purchase they are consciously or sub-consciously evaluating the product on a variety of attributes that are important to them. For any given product, a consumer may be extremely price-sensitive, or perhaps may want the highest quality product, no matter the cost. In order to successfully price and market your social enterprise’s goods or services, you must develop a deep understanding of who your customers are and what it is that they value when making a purchasing decision.

In this learning guide, we will learn:

  • The importance of developing an understanding of your customers’ key purchasing criteria
  • How to build an understanding of your customers’ key purchasing criteria
  • How to benchmark your products with your competitors’

Key Purchasing Criteria

Customers have choices. When making a purchasing decision, a customer is able to compare a variety of products or services available, and evaluate them on their various strengths and weaknesses. The attributes that your customers place the most value on when making a purchasing decision are known as your customers’ key purchasing criteria.

Common attributes that customers consider when selecting a product or service from one company over another are:

Of course, this list is not comprehensive and there may be additional criteria to consider depending on your industry. Additionally, some of these attributes may be broken down further into distinct components. For example, “quality” may be broken down into distinct attributes such as taste, smell, or appearance. Again, this will vary depending on your product or service.

The better you understand your customers’ key purchasing criteria, the more you can be responsive to their needs. This information can be used to:

  • Inform the price-point at which you sell your product or service
  • Understand the product or service attributes your social enterprise should focus on improving or marketing to customers.
  • Evaluate your social enterprise’s strengths and weaknesses relative to your competitors.

So while this is an important component of any pricing strategy, it also has operational benefits that should also help you make product or marketing decisions in the future.

Learn about (and from) your customers

The best way to understand your customers is to talk to them. Whether in-person or online, the more you can talk to and learn from your customers the better. This can be done through a variety of methods, both formally and informally – interviews and surveys being most common. Online surveys are a particularly effective way to reach large numbers of people.

This type of data collection shouldn’t be limited to your existing customers. In fact, your existing customers offer a biased sample of the market – they’re already your customers! Of course you want to learn ways to better serve them, but you also want to capture additional market share in the form of new customers. Unfortunately, these are also the people that are the hardest to reach.

Whatever method you choose, your goals when talking to your customers (and potential customers) should be to:

1. Identify their key purchasing criteria

While you likely have a good sense of what your customers value, don’t assume you know everything. You may be surprised to learn that your customers particularly value certain things that you hadn’t previously considered. That’s why your first step should be simply to identify all of the criteria your customers consider when making a purchasing decision in your product or service category.

2. Understand how they value these different criteria

Of course, most people value many things to some degree when making a purchasing decision, so it is essential to determine the relative importance of each. Which of these are the most important to your customers? Which are the least important? How much of a tradeoff between quality and price, for example, are they willing to accept?

Ideally you should ask your customers to rate attributes in a way that is quantifiable. One way is to ask them to directly assign a numerical value to a given attribute (“Please rate from 1-5 the importance of…”). Another way is to ask them to answer how important something is on a scale, with responses ranging from “Extremely important” all the way to “Not at all important”. In turn, these answers can be assigned numerical scores (“Very important” = 5 and “Not at all important” = 1, for example).

When doing so, be careful that you do not skew your answers in the direction of positive or negative responses. For example:

In the example above, the responses are skewed in the direction of having at least some importance to the respondent. Instead, it is best practice to offer a balanced set of choices, such as:

Depending on the survey software you use, there may be different ways to construct these questions. So use your best judgment on the way to ask the question to give you the best data to work with later.

3. Learn how your products or services compare with your competitors on these attributes

Remember, perception doesn’t always reflect reality. Your products may be of a higher quality than your competitors, or sold at a lower price, but are they perceived that way? Use this opportunity to ask them directly how they perceive your products on these key criteria, and how your competitors compare. Again, you’ll want this to be as quantifiable as possible for the sake of analysis later.


Data Analysis

Fortunately, this is not an academic study nor a formal program evaluation. This means you don’t need to worry about getting a statistically significance sample size – just get enough responses that you can do some meaningful analysis. What that number is varies depending on who you ask, but 50-100 responses is a reasonable amount. Again, you are just trying to improve your understanding of the market – perfect information is not possible.

Once you have received a number of responses that you are comfortable with, you can begin your analysis. One effective way to visually represent the data you have captured is to create a combination chart of customer responses:

This is a clear way of visualizing the three learning objectives you had when surveying your customers: their key purchasing criteria, the relative importance of each, and how your social enterprise compares to your competitors on these attributes.


Once you know what your customers care about, you can focus more on actually delivering it to them. In turn, this raises your customers’ willingness to pay and allows you to charge more or reap more market share given your price point. Furthermore, you may learn that you are focusing on things that your customer actually doesn’t care about. Cutting these out may allow you to reduce your price point to a more competitive level by getting rid of unnecessary costs.

Understanding your customers’ key purchasing criteria is an essential component of any pricing strategy. It also allows you to more fully understand the market in which your social enterprise operates, as well as its strengths and weaknesses relative to your competitors. In turn, you will be able to make smarter product and marketing decisions.

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