• Riley Draper

What is Consumer Behavior and Why Does it Matter?

The basic goal of any marketer is to convince people to purchase a product. This goal requires a firm understanding of consumer behavior. Knowing what consumer behavior is and what influences it can give some brands a huge competitive advantage over others. How can you expect to run a successful marketing campaign if you aren’t even aware of what influences people’s purchasing decisions?

If you are trying to promote a brand and aren’t aware of consumer behaviour and how essential it is, be sure to keep reading, and maybe consider partnering with a social media influencer.

What is Consumer Behavior?

To grossly over-simply, consumer behavior is the reasoning behind why people do or do not purchase something, and the study of these decisions. That is not too hard to understand, but it is still an unjust representation of the concept because of how tremendously complex it is to work with. There is probably nothing as complex as human beings are, and coming up with explanations for their decision-making that are strong enough to make reliable decisions is a task that brushes up against the impossible. And yet, it is a cornerstone of one of the most lucrative businesses in the world.

Understanding customer behavior requires many different fields of study to get a truly accurate picture. That’s why consumer behavior research tends to be so interdisciplinary. Biologists, psychologists, economists, chemists, and more are all needed to get a perfect picture of why even a single person makes a single decision, so you can imagine how complicated it would be to predict all the purchase decisions of your whole target audience.

Gathering Consumer Behavior Data

As you can probably imagine, having a clear picture of people’s decision making when it comes to buying things helps marketers better understand the best ways to persuade people to buy their products. But it would be nearly impossible to exhaustively examine how each person you are trying to market toward thinks — by the time you get a solid idea, the person will have experienced new things that would affect their decisions that you would have to account for. That’s why marketers have developed some shortcuts for gathering effective consumer behavior data.

Gathering Consumer Behavior Data

As you can probably imagine, having a clear picture of people’s decision making when it comes to buying things helps marketers better understand the best ways to persuade people to buy their products. But it would be nearly impossible to exhaustively examine how each person you are trying to market toward thinks — by the time you get a solid idea, the person will have experienced new things that would affect their decisions that you would have to account for. That’s why marketers have developed some shortcuts for gathering effective consumer behavior data.

Looking at the past buying decisions of individuals is a great way to predict how and what they might buy in the future. For example, if a brand sees that you are a loyal customer, they know they don’t need to waste resources advertising to you — they already have your business. Conversely, competitors know they might be able to persuade you to buy a similar product since you have a history of using them. Furthermore, marketers promoting related but different products can piggyback off of your buying history; if you recently bought a beach towel and a bathing suit, a sunglasses company can feel confident that you’d also be looking for their products. 

This sort of thing would have been unimaginable just a few decades ago but inventions like smartphones, social media, targeted advertisements, credit cards, and digital banking have made it almost trivial to figure out everything someone has bought within the past few years. Things get a little bit trickier though when a new product is coming to retailers, and marketers aren’t sure how to best promote it. That’s where a classic market research approach like focus groups comes in handy. 

You’ve probably seen a focus group play out in some form of media, so you should have a reasonable idea of how they work and their goals. A team of marketers will bring in a bunch of people, often having individual members of the groups representing specific demographics within their overall target audience. The group is then asked a bunch of questions to gauge their interest in the product, their needs and wants in general, and any suggestions they might have. These are repeated as the marketing team feels necessary, and the results of the focus groups help shape the marketing strategy for the new product moving forward. An often underestimated benefit from focus groups is learning not only how to sell something, but who to focus on selling it to.

The Basic Types of Consumer Behavior

While it is true that consumer behavior is so varied that it is hard to say much about it with any kind of certainty, but the study of consumer buying behavior has yielded four rough categories of consumer behavior.

  1. Habitual Purchase Behavior: The name is pretty self-explanatory — these are the purchases people make that have little consideration put into them and are mostly driven by habit. A good example would be your go-to staples from the grocery store.

  2. Variety Seeking Behavior: This is the opposite of Habitual behavior. This is where someone is trying a new product either because the last one was unsatisfactory, or if they are just inspired to try something for the first time out of curiosity. These are the instances where driving retention is important because it can convert a whim-purchase into a loyal customer.

  3. Complex Buying Behavior: These occur normally when someone is planning to purchase something important and/or expensive. This is called complex mostly because the purchase on the part of the consumer involves research, narrowing down options, and considering the decision for an extended time. Houses, cars, large appliances, insurance, and such are normally cases of Complex Buying.

  4. Dissonance-Reducing Behavior: “Dissonance,” in simple terms, is purchasing regret or a sort of FOMO. As such, this is the behavior where people are actively looking to not regret their decision. This often goes hand-in-hand with Complex Buying, since more expensive and complicated items are ones people stress more about messing up. An odd thing about this behavior is that it is pre-emptive and shapes the final decision but also lingers after the decision is made as someone tries to determine if they made a good purchase.

How is Consumer Behavior Influenced?

Answering that question, as mentioned previously, can be a daunting task. Consumer psychology is as complex as any other form of psychology, with the added variables of a competitive marketing world and economics. Accounting for every possible influence on someone is just not possible, but there are a handful of factors that are commonly accepted as the major players in someone’s buying decisions.

Consumer Identity

Some products fundamentally will not appeal to some consumers, be it a factor of their personality, biology, or lifestyle. It is hard to sell a male a feminine hygiene product, for example. These aren’t set in stone — going back to the previous example, a male could care about feminine hygiene products if he gets a daughter — but they are often hard to budge on, so brands usually just move on from these consumers until they see data that suggest someone has changed significantly.

Social Factors

It cannot be understated how much the opinions of trusted friends and family members can sway someone’s opinions on a product. Social status can also create some pressure for someone to purchase specific products or avoid others; someone’s perception of their social class is often more important than what their actual social class is. Entire marketing campaigns have been built around the idea of “affordable elegance,” as well as a “product for the common man.” Social class and economic status are often closely related, so the cost of products and their longevity is a real consideration for marketers too.

Marketing Campaigns

This seems a bit obvious, but marketing wouldn’t be as expansive of a field if it wasn’t proven to be important to companies. A big point is to find the right marketing message, essentially what you want consumers to know about your product. Campaigns can also, as rough as this sounds, wear down a consumer with their persistence and prevalence, and win people over in the long term. 

Recency can also be a huge factor in someone’s snap purchasing decisions — when you are buying something you don’t regularly buy, seeing an ad for a particular brand encourages you to look for that brand before competitors. Plus, in a world where you can buy anything on Amazon, seeing a commercial for a product can remind you that you need to buy something; imagine you forgot to pick up laundry detergent and saw a commercial for Tide that jogged your memory.

One of the newest innovations in the world of marketing campaigns is influencer marketing. If you are interested in that as a potential career, check out this guide to becoming an Instagram Model.


Customer Experience

This term accounts for both any previous experience the customer has with the type of product you are trying to sell them — including your own, as well as the experience someone has while they are shopping or making a purchase. Someone being rude to a consumer just before they make a purchase can imprint a negative association with a product onto their subconscious, even if the interaction was unrelated to the product.

 Moreover, knowing whether or not someone has previous experience with your product, and if so what the experience was like, can have a major effect on the best way to convince them to buy the products. If you’ve ever seen an advertisement for a brand that features the “new and improved” style rhetoric, that’s because it is a fantastic way to convince people that have tried the product before but weren’t completely convinced; the best part, brands usually only have to make the most minor of changes to be able to make those sort of claims.

The Payoff: Why Consumer Behavior Research is So Important

If you’ve been paying attention thus far, it shouldn’t be too hard to answer why marketers care so much about consumer behavior — at the end of the day, it makes it easier to sell people products if you can better understand them. That is, of course, the essence of its significance, but there is more to it than just knowing the best way to appeal to a consumer’s psychology. Acquiring a good image of who your target audience is and what makes them tick is difficult, but it has several worth-while benefits.

Market Segmentation

Another broad concept that might be irresponsible to oversimplify, but is going to be for brevity’s sake. Market segmentation is what happens when a company starts dividing its consumer base and the market as a whole into more specialized categories. Think segmentation, like segments of a whole.

This has been a practice for advertisers for a while. Case in point, how focus groups often feature people from specific demographics. How potential consumers are categorized depends mostly on what the product is and what differences change the effectiveness of certain marketing strategies. Common ways to segment consumers are ones you might expect like age, location, gender, and socioeconomic status. Some come up often in the business but aren’t as obvious to most people, such as whether someone is a first-time buyer or a recent defector to a competitor.

Market segmentation has taken on a whole new level of importance in the age of social media, targeted advertisements, and data monitoring. It is now way easier to categorize potential consumers into a range of demographics much broader than otherwise possible. Marketers are now able to customize an individual consumer experience more specifically and hit their marks more often, which offers two huge benefits.

Firstly, advertisements can now be more targeted and tailored to better hit the points that can convince people to buy a product. Targeted ads make this especially possible. Brands no longer have to go all-in on TV commercials and billboards now that they can give someone a 10-second clip on YouTube. These older, generalized forms of advertising couldn’t risk appealing too hard to a certain segment of their audience because it could alienate another segment. Now companies can deploy a wider variety of ads with certain tweaks that appeal to different people because they can deploy them on a case-by-case basis and not worry about upsetting some potential consumers.

Second, advertising with targeted ads can be less expensive than undergoing a huge advertising campaign. If a brand invests in making a bunch of different ads and deploying them out to specific people, it ends up being about the same, or still a little bit cheaper. That mostly applies to bigger companies, though. Smaller brands can now develop marketing plans that are not prohibitively expensive. Furthermore, more niche products can have a better chance of hitting their target audience. More specialized products that have traditionally had problems with retention and conversion rates are now able to succeed since the specific sorts of consumers they are trying to reach are more accessible to them.

A Whole New World of E-commerce

Much like how advertisements and Amazon have changed the game when it comes to all the ways consumer behaviour can be studied and benefitted from, the growing importance of the internet in daily life is shaping the world of marketing more and more. There are now major avenues for marketing and advertising that didn’t exist as little as five years ago. As much as the game is about predicting how people’s experiences will affect their purchasing decisions, marketers are now having to also predict what new forms of advertising will be relevant.

A recent example of unexpected development and still fairly new territory in the world of marketing campaigns is the rise of social media influencers. They aren’t unlike the classic tactic of celebrity endorsements, but they play out almost completely differently.

These developments usually domino effect into more developments that most likely never would have spawned on their own. Social media monitoring tools required both the development of social media — of course — but also for marketing on social media to have proven to be lucrative, which the average person might not have predicted. To a lesser extent, influencers and the relevance of things like engagement metrics also had a hand in the monitoring tool markets becoming as saturated as they are.

Conclusion:

This has been a fairly large look into the nature of consumer behavior research and its importance, but as has been mentioned previously, this is still barely scratching the surface. There are theoretical ideas about consumer behavior that are at odds with each other, dense statistics, and a nearly endless catalog of corporate research that can be examined before you ever truly become an expert in the subject.

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