Pilgrim's Progress? How the Consumer Makes Complex Decisions

Nick Watkins and Dr Miriam Comber
GfK-NOP Financial Division

BACKGROUND TO THE PAPER

Whilst many of the decisions that consumers have to make are relatively quick and easy, and the purchaser can benefit from frequent previous experience, this is not always the case. Some decisions will involve more than one member of the household, they may be considered over a fairly long period of time, they may be addressed only infrequently and they may involve a whole host of factors, some of which the consumer struggles to understand.

Financial services seems to have more than its fair share of these types of decision, although they are by no means exclusive to the sector, with car purchase another obvious example of a complex and lengthy consumer decision. Within financial services, the mortgage seems to us to epitomise this type of decision. The whole decision-making process takes months, if not years, from initiation to fruition. Like the eponymous pilgrim, the consumer will face a whole variety of challenges. Whilst gazumping and increasing loan-to-value ratios may not be quite as serious as the “Slough of Despond” and the “Hill of Diffculty”, they can certainly tax the patience and resilience of most consumers.