Understanding Consumer Behaviour
Understanding consumer behaviour allows businesses to optimise their practice, products, services and the way they advertise, in order to achieve their goals.
Consumer behaviour is a body of knowledge concerned with the study of individuals, groups, or organisations and the processes they use to select, secure, use and dispose of products and services to satisfy their wants and needs. It comprises of a variety of disciplines such as Economics, Psychology, Sociology, Anthropology or Neuroscience.
The contribution of those disciplines make consumer behaviour an important part of marketing, as it gives marketers a great deal of insight into how their customers think and behave. In other words, we may not able to read their minds, but we can come pretty damn close.
Why is consumer behaviour important?
Marketing is all about taking action to help your company be more competitive and stronger in its marketplace. Those actions typically imply researching, analysing and forecasting the trends of a marketing to understand its potential and characteristics. Based on this information, marketers develop strategies to deploy their resources in a way that will generate wanted results.
As part of their marketing strategy, they must segment, target, position their offering(s) and execute their plan in a coordinated way, based on the information they have gathered about their opposition, but also – their customers or potential clients. The processes can only be done once marketers understand their customers – how they think and behave before, and after, buying a product or service.
Here’s an example: consumers often buy products and services that help shape the image they have of themselves. By understanding this aspect, a marketer can then help customers associate products and services with their identity, thus generating leads and revenue. Consumer behaviour doesn’t only apply to individual customers in the B2C (business-to-consumer) sector, but also in the B2B (business-to-business) field. The best marketers have the customers’ interests at heart.
Psychological factors that influence Consumer Behaviour
Consumers buy things when they are motivated, therefore, if you know what drives people to buy products or services, then you can ensure that your products or services have all the features and provide all the benefits that motivate people to buy them.
It is, obviously, easier said than done. There are two main forces that drive people to make a purchasing decision: their wants and their needs.
Needs are items with existential importance – that facilitate life, from food, rent, phone, bathroom tissue, transport and products/services related to them.
Wants, or desires, are items that enhance life such as clothes, better phone, travelling, better car, video games, dining out, etc.
So, how do you motivate consumers? By emphasizing how your products and services connect with their expectations, needs and wants, but by also addressing customer concerns or perceived risks regarding purchasing the wrong item. There are a variety of risks that every single consumer, including ourselves, tries to avoid – such as financial risks (wasted money, product not worth it), physical risk (injury from misuse, trauma), functional risk (item does not work as expected) and psychological risk (buyer’s remorse, guilt after purchase). You must help consumers reduce the downside risk that is involved with purchasing your products or services.
There are three major methods to alleviate consumer uncertainty:
Provide as much info about your product/service as you can possibly can – where can it be purchased from, price, expectations and potential risks.
Compare with Competitors
Put your money where your mouth is – provide independent data that shows how your product work, its benefits compared to its competition.
Make it easy and convenient for customers to access and test your products, services, and staff members for information and inquiries.
Appealing to consumers' Sense of Self
Think about it – when you try on a new shirt and look in the mirror, you’re not looking at the shirt, but the image of yourself and the person you want to become by wearing that shirt, based on your unique personality. As a marketer, you should be able to understand that personality plays an important role in consumer purchasing choices. As consumers are people, they are complex, sometimes unpredictable, and express a variety of individual traits and characteristics that makes them unique.
Customers follow a distinct set of steps when making a purchase and the process can be as long as a couple of seconds (which we call impulsive purchase) or months (like the purchase of a car or house). Regardless of time length, the overall process is similar among people.
This process is what we call the Consumer Purchasing Process:
1. Need Recognition
An internal (want or need) or external (advert) stimuli is what makes people notice an item and buy it.
2. Information Search
When customers feel a need or want for something, they start searching for information about it.
3. Evaluation of Alternatives
Customers make choices based on two things, what features are most important and which brand does the best job at delivering those features.
Once customers start using the product or service, they compare the results with their expectations.
The post-purchase stage
The fifth and last phase of the buying process is the post-purchase stage and consumer behaviour that is specific to this moment (think ‘buyer’s remorse).
We all experience various emotions after buying something – sometimes we are happy with our purchase, sometimes we typically ask ourselves “did I actually need it?”, “wasn’t it a bit too expensive?”, “what am I doing?”, and so on. The questions are the results of various thought processes and emotional responses.
As a marketer, you should always try to determine what goes in the consumer’s mind after buying your product or service. As points of reference, always look out for these three scenarios:
- The delighted customer – when your product provides additional benefits that the customer didn’t expect, or the product delivers better than expected.
- The satisfied customer – the product works as expected, no better nor worse.
- The unsatisfied customer – we’ve all bought things that didn’t work at all or as expected, from gadgets to croissants that didn’t have as much cream as it showed on the label design. When the product underperforms, there are two things that can happen:
- The customer suffers in silence, they don’t make a fuss about it, don’t pursue a refund, don’t write a bad review on Trustpilot.
- The customer expresses their dissatisfaction – they WILL write a one star review on Trustpilot or Google. They will make complaints and ask for their money back. They may also tell other people to not trust your brand – in the field of digital marketing, this is a ship sinker.
It is important for the marketer to constantly know in which category each and every one of their customers will be, based on their post-purchase behaviour in rapport with the product’s performance. Where your customer lands is critical because it will affect whether they repurchase the product, whether they complain about the product, and how they give word of mouth advise to others about your product, positive or negative.
As a good marketer, you need to be ready for all scenarios – if a customer is delighted or satisfied, then congratulate them for making the right choice and encourage them to tell others about your product by producing a testimonial, a social media post comment, a positive review, etc. Finally, make sure to make it easy for them to re-purchase your items, by providing discounts, offers or loyalty programs.
Conversely, when the customer is dissatisfied, you first need to understand precisely why – were the expectations of the customers too high? Was this due to misunderstanding or misinformation from your part? Was the product used in the wrong way? Or, did the product just not perform as expected?
People complain if two conditions are met:
- They believe the problem was somebody else’s fault
- They believe the complaint will cause some some responsive action. In this case, is it your duty to make it right and save the relationship with the customer.
Understanding how consumers behave in the throughout the buying process, including the post-purchase phase, allows the marketer to stay ready and know how to act and when to act, in order to protect the integrity of the company, brand, product/service, and the satisfaction of the customer.
Great marketers pay the most attention to the post-purchase phase because after all, that’s the moment of truth on whether you’ve created and kept a customer.
Adding consumer behaviour into the marketing plan
Knowing your consumer’s behaviour is a critical part of your marketing plan, specifically the strategy phase.
Start off with segmentation and targeting – the process of grouping customers with common characteristics, and deploy your marketing resources towards converting them. Use demographic and behavioural variables such as age, location, gender or purchase frequency. You can also segment and target your audiences based on other variables – learning behaviours, personality traits, self-concepts or reference groups.
How you position your products and services is perhaps the most important decision you make in marketing. Your positioning statement should promote the functional, emotional, or economic benefits that appeal to the customers’ motivations. It should appeal to their self-concept and possibly connect the customer to one of their reference groups.
Marketing is all about creating happy customers. A solid understanding of consumer behavior helps you and your team create powerful campaigns that do just that.