Think about the many (buying) decisions you make every day; how much thought are you really giving to them?
Your decisions, be them on autopilot, or not, are what keeps marketers up at night.
Like it or not, boosting revenue can only happen once you decode the process behind customers’ decisions.
And that’s what we’ll discuss today: how to understand and influence consumers’ behaviours.
What Is Consumer Behavior, Anyway?
Consumer behavior observes how people choose, use, and discard products and services, encompassing their emotional, cognitive, and behavioral reactions.
Understanding consumer behavior is key for businesses trying to orchestrate impactful marketing tactics that shapeconsumer decision-making pathways.
Consumer behavior incorporates ideas from several sciences including psychology, biology, chemistry, and economics.
Why Is Consumer Behavior Important?
Think of it this way: if you can’t identify the catalysts for buying decisions, how are you expected to spark a desire for your products in customers minds?
Understanding how consumers choose products reveals gaps in your product suite or irrelevant offerings, while also highlighting the most wanted products in your catalogue.
Furthermore, by analyzing consumer behavior, you can tailor product marketing strategies, to make irresistible offers with a lasting impact on consumers. Basically, unraveling the mystery of consumer buying behavior leads to effective customer engagement and more persuasive acquisition and retention campaigns.
As you can see, the task of understanding consumer behavior is a high-stakes one.
This is why your consumer behaviour analysis shouldn’t end until you’ve identified:
- Consumer sentiments and preferences toward different options, including brands and products.
- The factors that influence consumers’ choices among various options.
- Consumer behaviors during the research and shopping phases.
- The influence of consumers’ surroundings, including peers, family, and media, on their decisions.
In many cases, brands can shape consumer behavior within their sphere of influence.
For example, think about how IKEA consistently encourages customers to spend more than they initially intended upon entering the store.
So, what prompts consumers to say yes?
There are three primary categories of factors that influence consumer behavior:
- Personal factors: demographics such as age, gender, and culture can significantly impact an individual’s interests and opinions.
- Psychological factors: consumer responses to marketing messages depend heavily on their perceptions and attitudes.
- Social factors: family dynamics, peer influence, educational background, social media presence, and income levels collectively shape consumers’ behavior.
Types of Consumer Behavior
Even if many of the buying decisions are random and spontaneous, researchers managed to identify four main types of consumer behaviors. Let’s see how they differ one from another.
Complex Purchasing Behavior
This type of behavior occurs when consumers are buying expensive, rarely purchased items.
In this case, people are deeply involved in the purchase process, conducting extensive research before making a significant investment.
Think about purchasing a house or a car; these are examples of complex buying behavior.
Dissonance-Reducing Purchasing Behavior
Dissonance is defined as a lack of lack of harmony. In the shopping process, this behaviour is visible when consumers struggle to differentiate between brands.
There’s no favourite brand and none of the options is particularly attractive, so ‘dissonance’ appears as consumers fear they will regret their decision.
For instance, when buying a lawnmower, you may select one based on price and convenience. However, you’ll still seek reassurance about your choice afterward.
, seek reassurance about your choice.
Habitual Purchasing Behavior
As opposed to the first two behaviors, this one appress when consumers mindlessly buy something, with little to no involvement in the product or brand category.
To illustrate, let’s think of grocery shopping: you visit the store and buy your preferred type of bread.
You demonstrate zero brand loyalty, as you go for your preferred taste, no matter the logo on the label.
Finally, we have this scenario, where consumers purchase a different product not because they were dissatisfied with the previous one, but because they seek variety.
For example, think of people who order protein or other supplements.
It’s not that they’re not satisfied with the product in itself; they just got bored of the same text and look for some chocolaty-feelings in their protein shakes.
It’s important you understand all these types of behaviors and determine which type of customers your brand attracts.
- Are you bringing in people who seek variety in their lives, and they’re just trying out your products
- People who mindlessly buy your products while waiting for the bus to show up?
- Or people who conducted extensive research, and decided you’re the best possible option for them?
Understanding this nuance will give you a better idea about how to segment different customer types.
What Influences Consumer Behavior?
Consumer behavior is influenced by various factors and you won’t be able to influence all of them.
However, if you’re at the very least aware of the most notable behavior influencers, you can still adapt and pivot to old your strategies over consumers day-to-day reality.
Here are some of the most common factors affecting consumer behavior:
The most obvious, and the most in control factor lies in your marketing efforts.
When executed effectively and consistently, with compelling messaging, marketing tactics can prompt consumers to switch brands and even opt for higher-priced alternatives.
For example, campaigns generated through Facebook can serve as reminders for regularly purchased products or services, like insurance.
Moving on to uncontrollable situations, economic climates, particularly regarding big-ticket items such as houses or cars, will significantly shape consumer behavior.
Evidently, positive economic conditions tend to strengthen consumer confidence and their willingness to make purchases, regardless of financial commitments.
Personal factors like preferences, priorities, morals, and values play a substantial role in shaping consumer behavior, particularly in industries such as fashion or food.
While advertisements can influence behavior to some extent, consumers’ choices are primarily guided by their personal preferences.
For example, climate change activists are unlikely to start consuming fast-fashion products, just as vegans aren’t going to buy your medium-rare stake, regardless of advertising efforts.
Peer pressure is a significant driver of consumer behavior.
The opinions and actions of family members, classmates, neighbors, and acquaintances can exert considerable influence on our decisions.
Social psychology also comes into play, affecting choices like opting for fast food over home-cooked meals, which can be influenced by education levels and social factors.
Finally, our financial capacity is a key determinant of our consumer behavior.
Unless exceptionally wealthy, budget considerations often precede purchase decisions.
Even if a product is exceptional and the marketing compelling, lacking the financial means to afford it can discourage a purchase.
Segmenting consumers based on their purchasing power helps marketers identify eligible consumers and achieve more favorable outcomes.
Customer Behavior Patterns
Be careful not to confuse buying behavior patterns with buying habits.
Habits develop as inclinations towards actions and become spontaneous over time, while patterns exhibit a predictable mental structure.
Each customer possesses unique buying habits, while buying behavior patterns are collective and provide marketers with distinct characterizations.
Customer behavior patterns can be categorized into:
Place of Purchase
Customers often split their purchases among various stores, even if all items are available in one location.
For example, while a hypermarket may offer clothes and shoes, customers may still prefer purchasing those items from specific clothing brands.
Understanding customer behavior regarding place choice will help you identify key store locations.
Examining a shopping cart reveals valuable consumer insights about purchased items and quantities.
Essential items may be bought in bulk, while luxury items are typically purchased less frequently and in smaller quantities.
The quantity of each item bought is influenced by factors such as perishability, purchasing power, unit of sale, price, and intended consumer base.
Time and Frequency of Purchase
Customers expect service at all hours, especially in the era of e-commerce where shopping is just a few clicks away. Shops must align their services with customer purchase patterns, meeting demands at various times and frequencies. Seasonal variations and regional differences must also be considered.
Method of Purchase
Customers can either make in-store purchases or opt for online orders, paying via credit card or upon delivery.
The method of purchase can influence customer spending, as online shopping may include additional charges like shipping fees.
Consider how much data you’ve already collected about your customers.
As a marketer, yo want to stay on top of pattern analysis, so you can then create strategies to encourage repeat purchases, increased frequency, and higher spending.
Customer Behavior Segmentation
Segmenting customers and understanding their buying behaviors has always been crucial for businesses.
Now, with personalization and customer experience becoming key factors in business success, effective segmentation is more important than ever before.
Interestingly, only a third of companies using customer segmentation find it significantly impactful. So you might be an advantage here.
This lack of insights proclaimed by companies highlights the need to find the right segmentation technique that aligns with the unique needs of each business.
Traditionally, marketers have relied on six primary types of behavioral segmentation:
- Benefits Sought: for example, when customers buy toothpaste, they may prioritize features like whitening, sensitivity, flavor, or price, shedding light on what motivates their purchases.
- Occasion or Timing-Based: segments based on occasions, such as holidays or personal events like birthdays, offer valuable insights into consumer behavior patterns.
- Usage Rate: the frequency at which customers interact with a product or service serves as a strong indicator of loyalty, churn, and lifetime value.
- Brand Loyalty Status: loyal customers, with their higher lifetime value and potential for advocacy, deserve special attention and incentives to nurture the relationship with the brand.
- User Status: segments may include non-users, prospects, first-time buyers, regular users, and defectors, allowing marketers to adapt strategies accordingly.
- Customer Journey Stage: segmenting based on the readiness of buyers enables personalized communication, helping identify obstacles and opportunities for improvement at every stage, including post-purchase behaviors.
In addition to these traditional methods, the RFM (Recency, Frequency, Monetary Value) model provides a behavioral segmentation approach.
This model measures the latest purchase, the frequency of purchases, and the total spending of customers.
RFM segmentation and analysis can reveal who your most loyal and profitable customers are and also:
- Reveal what brands and products are dragging your business down;
- Build custom recommendations for your customers;
- Solve certain Customer Experience problems.
Before making decisions based on gut feeling regarding your customers and your audience, observe their behavior, listen to them and build a relationship that will make them stay loyal no matter how aggressive your competitors are.
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Consumer Website Behavior Case Study
We partnered with AliveCor, a pioneer in FDA-cleared mobile electrocardiogram (ECG/EKG) technology, to help them better understand consumer behavior patterns, then use the insights to refine its digital strategy and boost conversion rates.
AliveCor faced a multifaceted challenge: while improving conversion rates was crucial, understanding consumer behavior dynamics emerged as equally important.
When we researched AliveCor’s online ecosystem, blending quantitative UX & UI analysis, with qualitative data derived from surveys, we uncovered some insights regarding consumer behaviour.
Over 40% of website visitors expressed frustration in finding comprehensive information, while 50% relied on physician recommendations when considering AliveCor products.
Furthermore, 26% of engaged visitors left without making a purchase due to insufficient understanding of product functionality.
Insights and Hypotheses
The insights we gathered in the research phase revealed critical consumer behavior trends.
Information gaps and the influence of physician recommendations emerged as key drivers shaping purchase decisions.
Notably, a disconnect between visitor engagement and conversion highlighted the need for clearer product understanding.
Based on these insights, we developed and tested a hypothesis: If we replaced the ‘Our mission’ tab in the navbar with a ‘How it works’ option, and also created a new page containing the ‘How it works’ video and other related information, we could increase the number of clicks on this tab and also the visitors’ engagement and conversion rates.
The experiment confirmed our hypothesis, with significant outcomes:
- Conversion Rate: +21%
- Revenue per Visitor: +5%
- Statistical Relevance: +94%
For more experiments and a more complex experiment showcase, check out the full Case Study here.
Our collaboration highlights the power of consumer behavior insights in driving digital transformation.
With an understanding of consumer preferences and pain points, AliveCor was able to optimize its digital platform to meet user expectations and improve conversion rates.
This case study underscores the importance of consumer-centricity in digital strategy.
If you prioritise consumer behavior insights, you can cultivate meaningful interactions, strengthen brand loyalty, and achieve sustainable growth in eComm & Retail.
And this doesn’t only work in super specific industries, as Retailers worldwide are also confirming how incredible transformative Omniconvert-powered insights can be.
Frequently Asked Questions
What Do You Mean by Consumer Behavior?
Consumer behavior is the study of how people make purchase decisions to satisfy their needs, wants, or desires and how their emotional, mental, and behavioral responses influence the buying decision.
To analyze consumer behavior, people are using concepts and ideas from various fields, such as psychology, economics, biology, and chemistry.
What Are the 4 Types of Customer Buying Behavior?
Habitual buying behavior, variety-seeking behavior, dissonance-reducing buying behavior, and complex buying behavior.
Consumer behavior types are determined by what kind of product a consumer needs, the level of involvement in the shopping process, and the differences that exist between brands.
What Is an Example of Consumer Behavior?
Let’s take planning a city break for two as an example of consumer behavior.
For someone that just starting dating, it might be extensive decision-making, but for a couple that has spent 5+ years together, it could be limited decision-making.
Another example of consumer behavior can be observed when making a reservation at a restaurant. For a friend’s night out, it requires a limited time investment, while making a reservation for an anniversary or a proposal is a more complex decision making.
How Do You Identify Consumer Behavior?
A consumer behavior analysis helps you identify how your customers decide on a product or a service.
To study their behavior, you need a mix of qualitative and quantitative data from customer surveys, customer interviews, and the information gathered from observation of their behavior in-store and online.
What Are the Characteristics of Consumer Behavior?
There are four factors that determine the characteristics of consumer behavior: personal, psychological, social, and cultural.
All factors have a major impact on a consumer’s behavior and the characteristics that define a customer will change as her/his life changes.
Why Is Consumer Behavior Important?
Consumer behavior is important for businesses because it helps them to understand their target audience, identify consumer needs and wants, and develop effective marketing strategies that can influence consumers’ decision-making processes.