McKinsey Consumer Decision Journey: The Circular Loop

Created by David Court, Dave Elzinga, Susie Mulder and Ole Jørgen Vetvik (McKinsey & Company) - https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-consumer-decision-journey

Overview

The McKinsey Consumer Decision Journey (CDJ) is a model of how people choose a brand, and it replaces the linear marketing funnel with a loop. David Court, Dave Elzinga, Susie Mulder and Ole Jørgen Vetvik introduced it in McKinsey Quarterly in June 2009, after examining the purchase decisions of almost 20,000 consumers across five industries and three continents. The industries were automobiles, skin care, insurance, consumer electronics and mobile telecom.

The funnel assumes a buyer starts with many brands and narrows them step by step until one is left. The CDJ describes four phases instead: initial consideration, active evaluation, closure (the moment of purchase), and postpurchase. The authors found that people often add brands during evaluation instead of only dropping them. In the original study, personal computer shoppers added an average of 1 brand to an initial set of 1.7, while car shoppers added 2.2 to an initial set of 3.8.

Two further findings shape how the model is used. The first is that brands in the initial consideration set can be up to three times more likely to be bought than brands outside it, so the accumulated impressions a brand leaves before anyone shops matter a great deal. The second is that two-thirds of the touchpoints during active evaluation are consumer-driven, such as online reviews, word of mouth and recollections of past experience, and only a third are company-driven marketing, according to the McKinsey article. Marketers who only push messages reach a minority of the touchpoints that decide the sale.

The postpurchase phase closes the loop. What a customer experiences after buying shapes the next decision in the category, and the authors separate active loyalists, who stay and recommend, from passive loyalists, who stay out of inertia and are open to a competitor's reason to switch. In auto insurance they found as much as a sixfold difference in the ratio of active to passive loyalists among major brands. When loyalty is strong enough, the customer skips consideration and evaluation on the next purchase and buys again directly. That shortcut is the loyalty loop.

David Edelman, who later coauthored McKinsey's 2015 update, restated the model for a wider audience in Harvard Business Review in December 2010 as consider, evaluate, buy, and enjoy, advocate, bond, with a buy-enjoy-advocate-buy loop that skips the first two stages entirely. Many later write-ups use this vocabulary, so it helps to know both versions refer to the same model.

McKinsey revised the idea in 2015. In The new consumer decision journey, Edelman and Marc Singer argue that companies can now shape the journey on purpose, through automation, proactive personalization, contextual interaction and journey innovation, and in doing so compress or even remove the consideration and evaluation phases. The original model describes how people decide. The update describes what a company can build in response.

The CDJ sits alongside other journey models rather than replacing them. Google's work on the messy middle zooms into the stretch between trigger and purchase and describes buyers looping between exploration and evaluation, which is a closer look at the CDJ's active evaluation phase. Staged frameworks such as the five-stage customer journey are useful for aligning content and channels to a sequence of stages. The CDJ is the better choice when the question is where brands enter and leave consideration and whether customers come back without shopping around.

Use the CDJ as a diagnostic. It tells you which phase is losing customers and which touchpoints carry the most weight in that phase, so budget and effort can move to where decisions are actually made. It does not prescribe tactics for any single touchpoint, and the skills below cover the working methods for each phase.

Core Principles

Consideration is decided before shopping starts

When a need appears, people name a short list of brands from memory. That list comes from impressions accumulated over time through advertising, news, conversations and product use, and the 2009 study found that fragmented media had made consumers shrink it. Work that raises a brand's chance of being recalled in buying situations, which the Ehrenberg-Bass Institute calls category entry points, is what earns a place on the list. Measure it with unaided recall, because recognition overstates it.

Evaluation can expand the set

Active evaluation is where the funnel metaphor breaks. Shoppers research, compare and ask others, and a brand that was absent at the start can enter and even push a rival out. Google's research on the messy middle describes the same behavior as a loop between exploration and evaluation that repeats until the shopper is ready to decide. For a challenger brand, this phase is often the most realistic way in.

Consumers pull more than brands push

Most evaluation touchpoints are consumer-driven: reviews, recommendations, in-store interactions and memories of past use. A brand cannot buy these directly, so it has to earn them, by giving people useful information, making the product easy to recommend, and joining the conversations already happening. McKinsey's authors framed the shift as moving from buying media to developing properties that attract consumers.

The moment of purchase is still contestable

Winning evaluation does not guarantee the sale. The original research found that more consumers now delay the final decision until they are in the store, and up to 40 percent change their minds because of something they see, learn or do there, per the McKinsey article. Online, the equivalent is the checkout, the pricing page or the sales call, where friction and last-minute doubts decide the outcome.

Loyalty comes in two kinds

A renewal rate hides the difference between customers who would recommend you and customers who have not bothered to look elsewhere. Active loyalists stay and advocate. Passive loyalists stay without commitment and switch when a competitor makes comparison easy, which is how the article describes GEICO and Progressive winning customers in auto insurance. Grow the active group, and treat the passive group as at risk.

The journey is a loop that feeds itself

Postpurchase experience shapes the next consideration set, both for the buyer and for the people the buyer talks to. The McKinsey authors used US and Asian carmakers as the example: positive ownership experience built loyalty and word of mouth, which kept Toyota and Honda in the initial set while sales incentives could not break the cycle. Investment in the postpurchase phase therefore pays off in the first phase too.

Customer-facing work needs one owner

The CDJ cuts across the website, PR, sales, support and loyalty programs, which usually sit with different executives and budgets. The 2009 article argues these activities must be integrated under one leader, and Edelman and Singer later proposed a journey product manager accountable for a journey's results in Competing on Customer Journeys. Without an owner, each team optimizes its own touchpoint and the loop breaks at the handoffs.

Funnel vs. Decision Journey

Steps

1. Define the journey and the buyer Pick one category purchase and one buyer type to study, because journeys differ by segment and by trigger. Write down what starts the journey, who decides, and what counts as a purchase and a repeat purchase. For a subscription product, a renewal or an upgrade is the repeat purchase. Keep the scope narrow enough that one team can own the findings.

2. Measure the initial consideration set Ask recent and prospective buyers, without showing them a list, which brands they would consider for this need. Record set size, whether your brand appears, and where it appears in the order of mentions. Ask why each brand came to mind, so you learn whether you have an awareness problem or a relevance problem. Repeat the question for each major buying trigger, since each one can produce a different set.

3. Trace active evaluation Find out what buyers did between the trigger and the decision: what they searched, which reviews and comparison pages they read, whom they asked, and which brands they added or dropped along the way. Combine interviews with behavioral data such as search terms, review traffic and competitor comparisons. Sort each touchpoint as consumer-driven or company-driven, and note which ones caused a brand to enter or leave the set.

4. Examine the moment of purchase Study the last step: the checkout, pricing page, store shelf or final sales conversation. Look for what made buyers hesitate, switch or leave, such as surprise costs, missing information, weak reassurance or a competitor's offer at the last moment. Compare conversion among people who reached this point with the reasons given by those who did not buy.

5. Separate active and passive loyalists Segment existing customers by whether they would recommend you and whether they have looked at alternatives. Survey questions such as the recommend question behind the Net Promoter Score, combined with behavior such as referrals, direct repurchase and comparison shopping, show who is in the loyalty loop and who is only staying put. Map what the active loyalists experienced that the passive ones did not.

6. Find the weakest phase and the heaviest touchpoints Put the four phases side by side and ask where you lose the most buyers relative to competitors. The McKinsey authors found that some brands are strong at consideration and weak at closure, and those brands need different spending from brands that never make the initial set. Rank touchpoints within the weak phase by how often buyers meet them and how much they sway the decision.

7. Reallocate effort and spending Move budget and people from phases where you already win to the phase where you lose. That might mean shifting brand advertising toward content that helps evaluation, retooling a loyalty program to reward advocates, or investing in packaging and checkout. Tailor messages to the weak phase, as Hyundai did in the 2009 article's example with a job-loss return guarantee that got it into more initial sets.

8. Assign ownership and remeasure Name one owner for the whole journey and give each phase a metric: inclusion rate in the initial set, win rate in evaluation, conversion at purchase, and the share of active loyalists. Rerun the consideration and loyalty research on a fixed cadence and after major launches, then check whether the changes moved the weak phase. Treat the journey as something you keep improving, as Edelman and Singer recommend.

When to Use

• When buyers know your brand but rarely shortlist it, because the CDJ separates awareness from inclusion in the initial consideration set and shows which one you lack.
• When you are deciding how to split marketing budget across awareness, evaluation content, conversion and retention, because the model gives you a phase-by-phase view of where decisions are won and lost.
• When you are a challenger in a category with established leaders, because active evaluation is where brands that were not in the initial set can still enter and win.
• When renewal numbers look healthy but growth from referrals and repeat purchases is weak, because the active and passive loyalist split shows whether loyalty is commitment or inertia.
• When marketing, sales and support each own a piece of the customer experience and nobody owns the whole, because the loop makes the handoffs visible.

When Not to Use

• For low-involvement, habitual purchases where people barely evaluate, because the model's value comes from studying research and comparison behavior that hardly exists there.
• Before you have enough customers to interview or observe, because a journey built from assumptions will reflect your team's beliefs more than buyer behavior.
• In markets with no real choice, such as a single regulated provider, because the model assumes buyers can add, drop and switch brands.
• When you need detailed interaction design for one screen or one service step, because a service blueprint or usability study will serve that question better than a category-level journey.