Have you ever stopped to think about how many times a day you make decisions? What should I wear today, where will I have lunch, which supermarket should I go to, which route should I take to get to work faster? If you stop to analyze it, it's a gigantic number of decisions we make every minute. And each decision we make has a direct impact on our behavior as consumers.
These decisions, however insignificant they may seem, keep many companies focused on finding the best time to offer us a product/service.
Large corporations like Ford, Apple, and Amazonhave spent billions of dollars studying consumer behavior—and all this effort aims to understand 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 the purchasing decisions of your customers or potential customers, the more products or services your company can sell.
With that in mind, I will guide you through this process to deeply understand consumer behavior and share various methods for getting to know your customers.
Shall we go?
What is consumer behavior?
Consumer behavior is the study of patterns and processes that consumers typically follow to choose, use (consume), and dispose of products and services. To discover these patterns, consumer behavior incorporates ideas from various sciences, including psychology, biology, chemistry, and even economics.
By using this practice to better understand 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 creating or improving products.
Although consumer behavioral studies are mostly under the umbrella of marketing, they are increasingly migrating to other departments such as customer success, product, and HR. This is because when implemented by different areas, the company ultimately benefits greatly by understanding the customer from different perspectives and expectations.
In this way, the company increasingly focuses its efforts on solving customer problems quickly and efficiently, creating a cycle of continuous improvement in the customer 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 motivating factors when it comes to buying or interacting 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 brought a list;
- Whether or not you were hungry;
- If you were dedicated to following a specific diet;
- The items that were on sale 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 know that you probably experienced this the last time you went to the supermarket—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 them separately.
Cultural factors
Culture is one of the most important influences society has 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 to analyze it, everything we wear, eat, and use is determined by the culture we are immersed in. For example, a Lebanese person does not have the same consumption habits as someone from Brazil, because the standards of the West and the East are very different.
Taking a closer look at our reality, it's likely that a consumer in the Brazilian Northeast has quite different interests and needs than a consumer in the South. This shows how cultural factors have a strong impact on consumer behavior.
Social factors
Social factors are also highly influential in consumer behavior, as they take into account the social circle and the need for belonging to the group. 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 choices in the market over time, but it's important to understand that consumption patterns are primarily shaped by school and professional 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 can imagine, a person's needs change over time and are rarely always the same. Basically, consumption patterns are shaped according to the family's life cycle. Thus, 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 regularly buy a cell phone from brand X, brand Y probably doesn't appeal to you as much, because your interests are more aligned with X.
Psychological factors
The psychological factors that influence consumer behavior are emotional states, personality traits, 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 the consumer if done correctly.
If you'd like a more comprehensive understanding of each factor, I've included a link that fully explains the concepts presented.
Why is consumer behavior important to 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 their business.
By understanding how consumers decide on or interact with their product/service and brand, they can fill the market gap by identifying 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 secret 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 that the experience a company offers 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 becoming an increasingly key brand differentiator. To create remarkable experiences, companies need to understand consumer demand and then utilize the right technologies to deliver personalized customer experiences.
As you may have noticed, consumer behavior influences all purchasing decisions, regardless of the product or service. Therefore, before making decisions based on intuition regarding your customers and your audience, observe their behavior, listen to what they say, to build a good customer relationshipbefore your competitors do the same.
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