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  • Rey Z

Purchase Quotient Model: Decoding Customer Purchase Intentions

In the world of marketing and consumer behavior, understanding what motivates customers to make a purchase is crucial for businesses. One model that can provide valuable insights is the Purchase Quotient Model.


Lets explore the concept of the Purchase Quotient Model, its formula, and how it quantifies desire, fear, and trust to predict customer purchase intentions.


What is the Purchase Quotient Model?

The Purchase Quotient Model is a framework used to measure and evaluate the likelihood of a customer making a purchase based on their levels of desire, fear, and trust. It recognizes that these three factors play a significant role in influencing consumer behavior and decision-making.


The Formula

The formula for calculating the Purchase Quotient is as follows: Purchase Quotient = (Desire + Fear) / Trust


Understanding the Components:

  1. Desire: Desire refers to the level of attraction or interest a customer has towards a product or service. It represents their motivation or inclination to acquire the offering. The higher the desire, the stronger the pull towards making a purchase.

  2. Fear: Fear represents the concern or apprehension that a customer may have if they don't acquire the product or service. It can be related to missing out on benefits, experiencing problems, or facing undesirable consequences. Fear acts as a driver for making a purchase to mitigate perceived risks or avoid negative outcomes.

  3. Trust: Trust plays a crucial role in building confidence and credibility in a brand, product, or service. It signifies the belief and reliance a customer has in the offering, the company, and its ability to deliver on promises. Trust acts as a foundation for establishing long-term relationships and encourages customers to make purchases.

Example:

Let's consider an example involving mutual fund investors. Suppose an investor has a desire (attraction towards potential wealth creation) of 0.9 and a fear (concern about financial struggle) of 0.1. Additionally, the investor has a high level of trust (0.9) in a mutual fund website. Using the Purchase Quotient formula, we can calculate:

Purchase Quotient = (0.9 + 0.1) / 0.9

= 1 / 0.9

≈ 1.11


Interpreting the Result:

The calculated Purchase Quotient of approximately 1.11 indicates a high likelihood of the purchase happening. Starting from 1, lower the value higher the propability of purchase.


This result implies that the combined influence of desire and fear, along with the strong trust in the mutual fund website, significantly increases the probability of the investor making the purchase.


Conclusion:

The Purchase Quotient Model provides a valuable framework for understanding and predicting customer purchase intentions. By quantifying desire, fear, and trust, businesses can gain insights into the factors influencing consumer behavior and tailor their marketing strategies accordingly.


Implementing this model allows companies to identify and address gaps in desire, fear, and trust, ultimately driving higher conversion rates and customer satisfaction.


Remember, the Purchase Quotient Model is a dynamic concept that can be adapted and customized based on specific industries, products, or services. Understanding and leveraging this model can provide businesses with a competitive edge in today's customer-centric marketplace.

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