Have you ever stopped to think about how many times a day you make decisions? What should I wear today, where should I have lunch, which grocery store should I go to, which route should I take to get to work faster? If you stop and think about it, we make a huge number of decisions every minute. And each decision we make has a direct impact on our consumer behavior.
These decisions, however insignificant they may seem, keep many companies committed to finding the best time to offer us a product/service .
Large corporations like Ford , Apple , and Amazon have spent billions of dollars studying consumer behavior—and all of this effort is aimed at understanding how consumers make purchasing decisions and what influences those decisions.
Well, your company may not be as big as Ford, Apple, or Amazon, but this is certainly a factor you should keep an eye on to stay competitive in the market. After all, the more you know about what drives your customers' or potential customers' purchasing decisions, the more products or services your company can sell .
With that in mind, I'll walk you through this process to understand consumer behavior in depth and share several methods for getting to know your customers .
Let's go?
What is consumer behavior?
Consumer behavior is the study of patterns and processes consumers typically follow when choosing, using (consuming), and disposing of products and services. To uncover these patterns, consumer behavior incorporates insights from various sciences, including psychology, biology, chemistry, and even economics.
By better understanding your consumer's behavior, you can also learn how they interact with and use your products/services. This knowledge can help you make better decisions about product development or improvements .
While consumer behavior research is often under the marketing umbrella, it's increasingly moving into other departments like customer success , product, and HR. When implemented across multiple departments, the company ultimately gains significantly by understanding customers from different perspectives and with different expectations .
In this way, the company increasingly focuses its efforts on solving customer problems quickly and efficiently, creating a cycle of continuous improvement of the experience.
What factors influence consumer behavior?
Now that you have an understanding of consumer behavior, let's talk about the reasons that influence and motivate them to make decisions .
We all have internal and external motivators when it comes to purchasing or engaging with a product or service. To put this into practice, think about your last trip to the supermarket. I believe several factors may have influenced what ended up in your cart, including the following:
- Whether or not you took a list;
- Whether or not you were hungry;
- If you were dedicated to following a specific diet;
- The items that were discounted that day;
- What did you remember seeing in a recipe online?
- If you started shopping in the first or second aisle;
- Between others…
Well, you don't need to be an expert to say that you probably experienced this the last time you went to the grocery store—and I must say, I did too. Based on this, Schiffman and Kanuk, two authors specializing in consumer behavior, highlight that influences can be psychological, personal, social, and cultural . To make it easier to understand, let's discuss each of these separately.
Cultural factors
Culture is one of society's most important influences on individuals. It is defined as a set of values, beliefs, preferences, and tastes passed down from one generation to the next.
If you stop and think about it, everything we wear, eat, and use is determined by the culture we're part of. For example, a Lebanese person doesn't have the same consumption habits as someone from Brazil, as the standards of the West and East are very different.
And looking more closely at our reality, it's likely that a consumer in the Brazilian Northeast has very different interests and needs than a consumer in the South. This demonstrates how cultural factors have a strong impact on consumer behavior .
Social factors
Social factors are also highly influential on consumer behavior, as they take into account social circles and group belonging needs. In this case, consumers may belong to the same culture, but social factors reflect habits according to their class and social role.
However, people can change their market choices over time, but it's important to understand that consumption patterns are primarily shaped by school and work environments, for example. And based on the choices a person makes, these same habits and interests can change over the years.
Personal factors
As you might imagine, a person's needs change over time and are unlikely to remain the same forever. Consumption patterns are essentially shaped by the family's life cycle . Therefore, personal factors are directly linked to lifestyle, personal motivations, attitude, and ethics.
An example of this is the movement brands are making to become increasingly human and purpose-driven . If you already buy cell phones from brand X, you're probably less drawn to brand Y because your interests are more aligned with X.
Psychological factors
The psychological factors that influence consumer behavior are emotional states, personality states, and patterns of thought or action that align with the customer journey .
A well-known example for identifying a consumer's psychological profile is Maslow's pyramid , which addresses the hierarchy of human needs. Furthermore, branding are closely linked to emotional and sensory motivations that can positively influence consumers if done correctly.
If you want to understand everything about each of the factors in an expanded form, I leave a link that fully explains the concepts presented.
Why is consumer behavior important for your business?
Studying consumer behavior is important because it allows marketing and customer experience professionals, for example, to understand what influences consumers' purchasing decisions and how to improve their experience with your business.
By understanding how consumers decide or relate to your product/service and your brand, they can fill the gap in the market to identify which products are needed and which are obsolete, according to customer opinion .
Studying consumer behavior also helps you decide how to present your products in a way that generates maximum value for consumers. Understanding consumer buying behavior is the key to reaching and engaging your customers to buy more and better from you .
Data on consumer behavior
- 7 out of 10 Brazilians already shop regularly online – IstoÉ / PWC
- 75% of consumers search for product information online, while 37% use social media – Brazilian Automation Association
- 75% of consumers expect a consistent experience across all channels they choose to interact with – Salesforce
- 87% of shoppers start researching products online – RetailDive
- 80% of consumers say the experience a company provides is as important as its products and services – Salesforce
- Customer-centric companies are 60% more profitable than companies that don't focus on customers – SuperOffice
Conclusion
As consumer behavior changes, customer experience is increasingly becoming a key brand differentiator . To create remarkable experiences, companies need to understand consumer demand and then leverage the right technologies to deliver personalized customer experiences.
As you've probably noticed, consumer behavior influences all purchasing decisions , regardless of the product or service. So, before making decisions based on intuition regarding your customers and audience, observe their behavior and listen to what they say to build a strong relationship with them before your competitors do the same.
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