Understanding consumer behavior is a key element of a marketing strategy. In fact, before implementing a strategy, it is essential to fully understand the needs and expectations of the consumers you want to influence. To do this, you need to understand how the consumer will react and be influenced by your marketing strategies.
To delve deeper into the preferences of your target market, some of the questions you must answer are:
- How do the consumers perceive the information?
- How do you capture their paying attention?
- What are their needs?
- What factors influence them to make purchasing decisions? Are they price, quality, commercial offer, or others?
The goal of every entrepreneur is to meet the demands of the public and market, which will give a boost to the organization’s sales and customer satisfaction.
To achieve this goal, an entrepreneur conducts a study and gains insights into the consumer’s behavior, who can be potential buyers. Surveys and research studies make decision-making easier and aid in improving relationships with customers.
What is consumer behavior?
Consumer behavior is the actions and decisions that people or households make when they choose, buy, use, and dispose of a product or service. Many psychological, sociological, and cultural elements play a role in how consumers engage with the market.
It is a multi-stage process that involves identifying problems, collecting data, exploring options, making a decision to buy, and evaluating the experience afterward. Consumers may be impacted during these stages by things including personal views and values, social conventions, marketing campaigns, product features, and environmental conditions.
Understanding consumer behavior is essential for businesses to create marketing plans that work and to supply goods and services that satisfy customers’ wants and needs. To see trends and patterns, forecast demand, and make wise choices regarding product design, price, promotion, and distribution, marketers must analyze and understand data on customer behavior.
LEARN ABOUT: Test Market Demand
Consumer behavior in marketing
Consumer behavior is important in marketing because it explains how consumers make decisions about what products to buy when to buy them, and from whom to buy them.
Marketers can develop effective marketing strategies that target the right consumers with the right message at the right time by understanding consumer behavior.
Here are some examples of how consumer behavior affects marketing:
SegmentationConsumer behavior research helps marketers behavioral segment markets. Marketers can modify their marketing messages and strategies to better appeal to each demographic by recognizing these segments.
Product designUnderstanding consumer behavior can also aid in product development. Marketers can create products that better meet consumer needs and preferences by analyzing customer requirements and tastes, leading to increased sales and customer satisfaction.
Pricing StrategiesMarketers can use consumer behavior data to determine the price points at which customers are willing to pay for a product, as well as the pricing strategies most likely to appeal to each market segment.
BrandingConsumer behavior research helps in the development of branding strategies. Marketers can create brand messages and strategies that resonate with consumers and build brand loyalty by understanding consumer attitudes and perceptions of brands.
Why is consumer behavior so important?
Businesses invest a lot of time and resources in their product or service. Hence, it is absolutely essential that their offerings cater to the needs of their customers. Or they will incur huge amounts of losses.
So, in order to make sure that the products, as well as the brand, are well-accepted by the consumers, it is important to first know what consumers want and are likely to buy.
Better marketing and communicationsAs living standards, trends, and technology keep changing, consumers’ choices also keep varying. Understanding how these factors affect customers’ buying habits helps organizations design their messaging accordingly. Thus, having insights into consumers’ purchase behavior can help marketers in meeting their objectives.
Improve customer retentionIt is far more beneficial to retain an existing customer than to gain new customers. It’s easier to sell new products and services to your existing customers than to find new ones.
Entrepreneurs who are able to retain their customers and create strong relationships manage to create strong new brand loyalty for their businesses. Customer loyalty can prove to be a promoter of your business and spread positive word of mouth. Satisfied customers share their happy experiences with their friends and family.
So, retaining as many customers as possible should be the goal of entrepreneurs interested in growing their companies.
Increase customer loyaltyUnderstanding customer behavior helps in finding out ways to boost customer loyalty, which in turn, will lead to higher sales and a strong brand. Analyzing trends in sales can aid in offering discounts as well as suggesting the best products and services to them.
Better plan inventoryResearching customer attitudes helps companies plan inventory and stock raw materials. In the case of a service-based business, the management team can better plan their human resources. If businesses see a trend in demand for specific products, they are likely to send more purchase orders to their suppliers. Consumer behavior data can help them to balance demand and supply.
Increase salesA company always aims to satisfy specific market niches. Even if the company operates in different sectors, it should target potential buyers in each segment. If you know your customers well, you can have better conversations with a high probability of closing the deal.
Knowing who you are selling to makes it possible to clearly define your objectives in the market. Learning more about consumer behaviors helps to define the main customers that come directly to the company. Your inventory should be stocked with products that meet the requirements of your potential buyers.
Instead of taking random shots and trying to sell to anyone, having knowledge about your customers’ likes and dislikes helps in making smarter decisions. Such a strategy has a higher chance of generating sales.
Research competitionStudying consumer buying behavior helps in understanding the competitive market. You can plan on how to position your products and services to offer competitive advantages. Find out answers to questions like:
- Is the customer already using a competitor brand?
- What drives a consumer to buy from your competitor?
- Are potential customers happy with the competitor brands?
- What are the gaps between your products and that of competitors?
Explore further: Consumer research: Examples, process, and scope
4 Types of Consumer Behavior for effective marketing strategies
Marketers must understand several types of consumer behavior to create effective marketing strategies and meet customer needs. This section will look at the four types of customer behavior and how they affect businesses.
Complex buying behaviorWhen customers are actively involved in the purchasing decision process and are aware of the significant differences between the various brands, this happens. Before making purchasing decisions, consumers conduct extensive research, gather information, and evaluate alternatives.
Dissonance-reducing buying behaviorThis type of behavior happens when people make expensive or risky purchases and then feel uncomfortable or confused about their decision. Consumers may seek reassurance, information, or feedback from others to reduce confusion.
Habitual buying behaviorThis happens when customers make purchases with minimal decision-making and marketing efforts or information search. Based on prior experiences, they have developed brand and customer loyalty also buying habits, and they may buy things out of habit, convenience, or familiarity.
Variety-seeking buying behaviorThis type of behavior happens when customers are not deeply involved in the purchase decisions but seek variety or uniqueness in their purchases. They may most often change brands or products to satisfy their curiosity or need for variety.
What factors influence consumer behavior while purchasing?
Consumer behavior is influenced by many external factors and internal factors such as situational, psychological, environmental, and marketing factors, personal factors, family, and culture.
Businesses try to collect data so that they can make decisions on how they can reach their target audience in the most efficient way. While some influences may be temporary and others can be long-lasting, these factors can influence a person to buy or not buy. Let’s now look at some of these factors in detail.
Situational factorsThey are temporary in nature and include physical factors such as a store’s location, layout, colors, music, lighting, and even scent. Companies try to make these factors as favorable as possible. Other situational factors include holidays, time, and moods of the consumer.
Personal factorsThese factors include demographic factors such as age, gender, income, occupation, etc. It also depends on one’s interests and opinions. To further understand consumers, companies also look more closely at their lifestyles – their daily routine, leisure activities, etc.
Social factorsThis factor also includes social class, level of education, religious and ethnic background, sexual orientation, customer orientation, and people around you – family, friends, or social network. Different cultures have varying customs and rituals that influence how people live their lives and what products they purchase.
Generally, consumers in the same social class exhibit similar buying behavior. Most market researchers believe a person’s family is one of the biggest determinants of buying behavior.
Psychological factorA person’s ability to understand information, perception of needs, and mindset influence consumer behavior. One’s reaction to a marketing campaign will depend on one’s beliefs and state of mind.
How to collect data on consumer behavior?
To understand consumer buying behavior, you need to know how consumers think and feel about the different alternatives available in the market, how they reason, and how they choose between different options.
The motivations that influence consumer behavior are so broad that the most effective way to study them is to use different market research methods. These methods should collect both qualitative and quantitative data. Some of the common data collection methods are:
Surveys are a popular method for collecting data about customer behavior. Online, phone or in-person surveys can provide quantitative information about customer opinions, preferences, and behavior.
Small, moderated consumer discussions about a specific good or service are called focus groups. Focus groups provide qualitative information on consumer opinions and views and also insights into how customers interact with products and services.
Consumer interviews can provide detailed data on customer behavior, attitudes, and preferences. Interviews can be conducted in person or over the phone, and they can provide qualitative data to boost quantitative data.
Observational research entails watching and recording consumers in their natural surroundings. This method can aid in identifying patterns of behavior and offer insights into how consumers engage with products and services.
Experiments involve changing one or more variables to see what effect it has on customer behavior. It can be carried out in a controlled environmental analysis or in the field, and it can provide information about the connections between variables and consumer behavior.
Data from sources such as sales data, web analytics, and social media can be analyzed to gain an understanding of customer behavior. This method entails recognizing patterns and trends in data in order to determine consumer behavior and preferences.
Online surveys are the most efficient method of conducting consumer behavior studies. You can create a survey using survey software and send it to your target audience. You can also customize the survey flow to ask only relevant questions to respondents.
It lets you analyze data and generate reports to make better decisions. You can also filter data, compare results and identify trends over time. Based on the results, you can predict demand and formulate your sales and marketing strategy.
It also helps in designing pricing models, and the maximum amount customers can pay for a specific bundle of features.
How QuestionPro helps in consumer behavior research?
QuestionPro is an all-in-one survey software platform that can assist researchers in a variety of fields, including consumer behavior research. Here are some ways QuestionPro can help with research on customer behavior:
Designing surveyQuestionPro offers a variety of survey templates and question types for creating surveys that measure various aspects of consumer behavior. The platform allows for survey customization to meet specific research objectives.
Targeting respondentQuestionPro enables researchers to target specific demographic, behavioral research, and preference groups of consumers. This aids in the collection of a sample group that is more likely to offer useful insights.
LEARN ABOUT: Behavioral Targeting
Collecting dataResearchers can collect data using QuestionPro through a variety of channels, including email, SMS, social media, and websites. The platform also supports offline data collection via a mobile app.
Analyzing dataQuestionPro offers a variety of data analysis tools to assist researchers in making sense of the information gathered. Data visualization, text analytics, sentiment analysis, and statistical analysis are among the tools available.
Reporting insightsFinally, QuestionPro enables researchers to present data insights in a range of ways, such as charts, tables, and reports. The platform also allows team members and stakeholders to share insights.
QuestionPro can be an extremely useful tool for researchers conducting consumer behavior research. It can help researchers learn about consumer behavior in a reliable and actionable way by giving them a complete solution for survey research.
QuestionPro can help you learn more about your potential customers and conduct research studies. If you need any help with designing a survey and collecting data, connect with us. We’d be happy to help!