To maintain long-term sales stability goes beyond just having a product that everyone likes. In the first place, no product will be loved if it doesn’t meet consumers' needs. Therefore, understanding what makes your customers tick and resonating with them in the ways that make them want to engage goes a long way. To do this, marketers turn to a wide range of reports, studies, and mechanisms to understand one concept – CONSUMER BEHAVIOR.
As gold is to miners, so is consumer behavior to every marketer. Moreover, we've discovered time and time again that those who utilize it best and align their marketing strategies to what the data tells them are those who achieve the best sales returns. So, what exactly is consumer behavior, and how does this concept make a difference to your business? Keep reading to discover these and more.
What Is Consumer Behavior?
When we consider this concept in general terms, we discover that consumer behavior is mainly psychological. This concept is a psychologically-based analysis of how people make buying decisions. Here is a study that seeks to understand what stimulates them to make that buy.
Meanwhile, we must mention that there are numerous facets of consumer behavior. Here are a few of them:
- • How a consumer feels about particular businesses, products, or services
- • What prompts a consumer to select one product over another, and why
- • The components in a consumer's everyday environment that influence buying decisions or brand perceptions and why
- • The way consumers make decisions in groups or independently
Factors Affecting Consumer Behavior and Decisions?
There are different factors responsible for changes in consumer behavior. Hence, marketers must study consumer purchase habits and figure out relevant buyer trends at every point. Understand that there are a lot of factors that impact consumer behavior. However, we will only consider four of them. These four are the social, cultural, personal, and psychological factors. Here, we will talk about only four of them.
Cultural Factors
Culture comprises the processes of a particular nation, people, or group. This culture can be a proud t of a specific nationality, religion, location, or association. A good instance is of a consumer making decisions based on their culture. Imagine a Midwesterner who pays for a ranch to go with their pizza from the grocery store.
Social Factors
The social factors are the aspects of a person's environment or background that influence their buying behaviors. Examples of such social factors include family and friends as well as other social groups whose acceptance is of importance to the consumer. Therefore, when paying for an item, a consumer might prefer a brand or a company because of what their parents bought for the family growing up.
Personal Factors
This aspect may include a person's age, occupation, finances, marital status, lifestyle, and value system. A good example of such consumer behavior impacts would be a single mother in her 20s preferring to buy an SUV rather than a minivan because of her personal perception of the minivan being a vehicle for a middle-aged mother.
Psychological Factors
It is psychological when it concerns the way someone perceives a product or service. It also involves their personal beliefs and motivations. All of these can affect the way they buy items and choose one service over another. A good example is a consumer who relishes working out. Such a customer will presumably spend more money on fitness classes or dumbbells for home. The case will be different with someone who loathes working out.
Why Is Consumer Behavior Important to Your Business?
Reports from a Salesforce study state that 66% of consumers expect companies to recognize their needs and prospects. What this suggests is that if you don't recognize what a consumer wishes for before they can tell you, they're possibly taking their business to another provider.
When you study consumer behavior, you do your business a lot of good. Understanding consumer behavior becomes crucial as it assists marketers in understanding what inspires consumers’ buying decisions. When you understand how consumers decide on a product, you can fill in the gap in the market. Also, you can recognize the products that are necessary to meet their needs and the products that are no longer needed.
Also, understanding consumer behavior enables marketers to determine the best ways to introduce their products or services. With this understanding, they can do this in a way that produces an ultimate effect on consumers. In addition, understanding consumer buying behavior is the pivotal mystery behind reaching and engaging your clients. This knowledge is what you need if you must convert them to buy from you
What should a Consumer Behavior Analysis Reflect?
A good consumer behavior analysis should reveal the following details:
- • What consumers believe and how they feel about several options (brands, products, etc.);
- • Factors that impact consumers when selecting between many alternatives;
- • Consumers’ behavior while surveying and shopping;
- • Ways consumers’ environment (friends, family, media, etc.) impacts their behavior.
- • The psychological analysis of consumer needs and wants.
- • Familiarity with consumer buyer behavior and how consumers reach a purchase decision eventually.
- • Evaluating personality factors that concern how a consumer feels about a brand, product, or service and what stimulates them to prefer one brand over the other.
Aside from the psychological factors, the consumer decision procedure emanates from social media, personality factors, and prior customer ordeals. A good example is how a young single woman will prefer a hatchback or sedan rather than a truck, or a minivan, because of understanding that a minivan or truck fits a male or someone middle-aged best.
Why is a Consumer Behavior Analysis Important?
Consumer behavior analysis is crucial for marketers because:
- • 76% of consumers want brands to realize and cater to their needs and anticipations.
- • According to the S&P 500 Index, companies leading in customer experience surpass companies that do not consider consumer feedback.
- • Marketers have to acknowledge consumers buying behavior, what provokes customers to buy particular products and services over others, and what deters them from buying specific products or services or reaching out to particular brands. Every consumer gets affected by several factors examined above and in other parts of this post.
Additionally, based on findings of behavioral science and the 2020 McKinsey report, understanding consumer behavior is relevant because of the following:
- • Consumer behavior helps strengthen positive beliefs attributed to products and services.
- • It molds developing and new habits
- • This concept strengthens habits related to consumer purchase and buying decisions
- • These behaviors align messages to a consumer’s perspective
- • They assess consumer beliefs and behavior to a thorough degree
Consumer Behaviors and Marketing Strategy
Thriving companies establish their marketing strategies based on consumer behavior insights as a foundation. You don’t find them solely generating products and marketing plans based on their ideas. These brands are taking external information into the fold to discover what customers prefer and how they want it. Afterward, they engage them based on these findings.
That process and result are the significance of developing a positive customer experience (CX), and CX means a lot to nurture a loyal customer base. Check out this quote from Qualtrics:
"Consumers are 3.5 times more likely to purchase more from a brand after a positive customer experience."
How Can Marketing Affect Consumer Behavior?
Marketing can be highly effective in influencing consumer behavior. Here are some of the factors that contribute to that success.
1. Audience’s Emotional Response
One of the incentives that come with marketing campaigns and make them effective is they provoke consumers to respond to them. The more people react to your marketing campaigns, the more they will converse about your business. Consequently, the more they talk about your brand and products, the more likely people are to buy from you.
2. Branding And Message of the Business
Employing imagery and word associations is a terrific strategy to draw attention to your company brand. Here is a good example, if you seek to reach young people, you may use trendy phrases and memes as a part of your campaign. By doing this, you prompt your audience to relate your product to things they already see as fun and trendy.
3. Audience’s Memory of the Brand
One other crucial way marketing influences consumer behavior is by provoking emotions such as nostalgia and fear. Take this for example: when a product gets attached to certain brands, ideas, pictures, or music from your childhood, this may affect your feelings of brand loyalty. Similar to this, on the flip side, if a marketing campaign makes you scared, you may get the urge to purchase the product as a way to lessen anxiety and protect yourself.
Note: Consider marketing to be the creation of an emotional relationship with your customers, as well as to exhibit your products and services. Understand that customers often buy based on emotional effects as opposed to rational thinking.
What Are The Consumer Behavior Trends In 2022?
It’s better to know how to control consumer behavior when you understand consumer trends. With the evolution of businesses, consumers’ habits and preferences also change. Customers’ appreciation ten years ago will not be the same as their present tastes. Similarly, these preferences and needs will be different ten years from now.
Therefore, when in the process of creating and improving your marketing strategy, always keep in mind that consumer behavior trends are dynamic. Not that you have that in mind, below are some of the customer behavior trends that will influence consumers buying decisions in 2022:
1. Transparency
In the last couple of years, customer needs have continued to lean towards transparency in the businesses they prefer. Consumers now revolt and soon look away from companies with debatable methods or are in the hands of CEOs they politically disagree with. Consumers hold a higher chance of supporting firms that resonate with their personal beliefs and moralities. Businesses need to be transparent concerning their histories and procedures if they wish to earn their consumers’ confidence.
2. E-commerce Capabilities
Remember, the COVID-19 lockdown compelled people to stay inside their homes. This event led to a rise in online spending. Now that these restrictions got lifted, that trend does not seem to be stopping any time soon. Businesses need to satisfy consumers where they are. More so, now more than ever, that place is online.
Therefore, establishing an intuitive e-commerce site that delivers a positive customer experience Is essential in the process of developing strategies to impact customer behavior and brainstorming strategies to impact consumers both in-person and online.
3. Security/Anonymity
There are so many businesses out there doing their things online. Presently, most consumers get worried about the security of their personal information. These buyers seek more anonymity. No one wants a company to know too much about them. All they will provide will only be the vital details for the business transactions.
Businesses need to meet consumers halfway and welcome those who forbid giving any information besides what is necessary for a transaction. Indeed, this may make it extra tough to impact a particular person. Still, demonstrating that your company follows this trend could affect their buying decisions.
4. Environmental Friendliness
Climate change remains a top fear for many people. Most consumers hope to play their part to offset the damage to the planet. Hence, they prefer more environmentally friendly businesses. More so, they will push that preference further in the future. When you have an eye leaning towards clean and green methods, consumers will often choose your services or products. In all, consumers get influenced by brands offering sustainable products.
Note: Overall, consumers’ prospects of brands continue to rise. Consequently, companies need to satisfy those prospects to retain and enhance brand loyalty among their target audience.
Principles of Influence According to Robert Cialdini
We take insights from Robert Beno Cialdini, an American psychologist, and academic who is also a Regents' Professor Emeritus of Psychology and Marketing at Arizona State University. Cialdini served as a visiting professor of marketing, business, and psychology at Stanford University. Also, he took on this role at the University of California at Santa Cruz
Cialdini combined years of research on social influence and created six universal principles for understanding consumer behavior and was to affect these behaviors. Both businesses and consumers can benefit from these principles to better comprehend the basic workings of consumer behavior. These principles will help discern which techniques are most likely to drive results.
1. Reciprocity
Consumers often perceive the need to pay back a favor or return kind gestures. These consumers might react best to you when you offer a free sample or a generous discount.
2. Commitment
As soon as someone gets immersed in something, they are more likely to attach to it. When this happens in business, it affects brand loyalty mostly. Once someone begins to use a product or service, there is a higher chance to commit to paying for it once more.
3. Consensus
When more consumers do something, others are likely to follow the trend and do the same. Therefore, when brands can prove their popularity or satisfaction across a wide customer base, other consumers will come in and patronize such brands.
4. Authority
Humans are more prone to heed an expert than anyone off the street. Hence, while pack mentality is crucial, a fitting expert speaking to the potency of a brand’s product or service is vital to bring in new consumers.
5. Liking
Those who share similarities with the target consumer are more likely to convince the consumer to buy. Watch out for those from similar demographics. This similarity can be in terms of ethnicity, socioeconomic class, religious inclination, or even shared attractions. All of these are far more productive at convincing consumers than those they recognize as largely varied.
6. Scarcity
Some people tend to prefer what they understand they cannot get. Therefore, making a product or service appear limited comes in handy. Making it look as if it will go out of stock if they don’t act soon often makes it more stimulating to the consumer. This strategy boosts the odds that they will buy.
Now that you have these six principles of influence, you can more adeptly steer your potential consumers and convert more to sales. Nevertheless, Cialdini advised against crossing the line between influence and manipulation. Understand that the latter could spell disaster in the long run for your business.
He said, “People, companies, and marketers need to ask themselves whether the principle of influence is inherent in the situation – that is, do they have to manufacture it, or can they simply uncover it? No one wants to be a smuggler of influence. Claiming to be an expert when they’re not, exploiting power – those eventually will have negative consequences. We can focus too heavily on economic factors when seeking to motivate others toward our offerings and ideas. We would do well … to consider employing psychological motivators such as those we have covered here.”
Conclusion: Always Stay Abreast
DemandJump advises every business owner to cultivate the habit of keeping in touch with consumer behavior trends. If you wish to do this, carry out customer surveys, hold focus groups, and go through trade association and industry research reports. Also, do well to talk to your retail partners. When you get new technologies debuting every month, stay particularly attentive to disruptive products that might make yours stale or a second-choice category by a mile.
Finally, hold interdepartmental meetings with your marketing, sales, finance, IT, and distribution department heads. These meetings aim to discuss how consumer behavior influences marketing strategy for your company and ways to maximize available opportunities.
