Constilation

Understanding Customer Behavior

Author
Ross Malpass
July 12, 2021

To stay in business, your company needs to satisfy a customer's wants and needs. To do that, companies need to have an understanding of what customers want and need, but also, how they behave. This understanding requires considering questions like:

  • Why would a customer buy one product over another?
  • How are customers researching products before they buy?
  • What triggers impulse purchases? Which products are more likely to be purchased on impulse?
  • What is the best way to get information about products to a customer?
  • What features do customers appreciate in a product?
  • What is the best way to get a product into a customer's hands?
  • How do peers influence customer purchases?

Having a good understanding of customer behavior will influence marketing, product offerings, product flows, and a lot more.

What is Customer Behavior?

Technically speaking, customer behavior is the study of how individuals and companies select and use products or services. It touches on every aspect of how a customer interacts with your company, from first having product recognition to actually using the product. It also impacts whether a customer will come back and how the customer's experience will be communicated to others.

Overall, learning customer behavior is a mix of motivation and psychology. Even when customers do not realize what motivates their purchases, companies want to know the reason behind the purchase to tap into that motivation to sell more products and services.

Three overarching factors generally influence customer behavior:

  1. Personal
  2.  

Personal factors are very basic opinions and interests. For example, someone who enjoys fishing is more likely to purchase fishing gear compared to someone who does not have that interest or hobby.

Personal factors are affected by profession, culture, age, gender, and background. Anything that makes you "you" as a customer will fall under the personal influences behind a purchase.

  1. Psychological
  2.  

The psychology behind a purchase is generally the result of perceptions and attitudes. This factor is particularly relevant when it comes to marketing efforts.

The consumer's ability to understand and process information, their perception of their needs and wants, and their attitudes about a brand or product will all fall under the psychological factors of a purchase.

  1. Social
  2.  

Customers often purchase products or services because of the various social pressures in their life. That pressure can be both positive and negative. Social class, income, and education level will all affect purchases.

Social media and the perception of others are having an increased impact on customer behavior today—much more so than even just 10 or 20 years ago.

Collecting Consumer Behavior Data

The first step in understanding consumer behavior is observing it. While you can observe one or two people anecdotally over time, it is much more effective to have a wide range of information. Reviewing many people with different backgrounds and perceptions will help create better observations that be used to affect customer behavior across a broad range of customers.

Common methods that are used to collect consumer behavior data might include things like:

Customer Reviews

Product and service reviews can be a helpful way to get feedback from customers. They will often highlight common problems or wish-list items from current or previous customers.

Q&A Sites

Some websites will set up an area to ask questions from other people who may or may not be associated with your business. These sites will give you a better idea of what clients are trying to accomplish with your product, including problem areas that you may need to address.

Surveys

Client surveys can be a good way to get feedback, especially after a client has already made a purchase or has had an experience with your company. You can ask specific, tailored questions to get information on a particular area, or you can ask open-ended questions that may provide additional insights that you had not considered.

Focus Groups

A focus group brings together several types of customers in a controlled setting to review a product or service. You can ask them questions directly and have them try out new products and get direct feedback.

People Counters

People counter systems can help you track how your customers are using a particular location, when they shop, and a lot more information. They can be a good way to get a better idea of where and when clients want to see your products.

Analytics

If you use online ordering, or even if you just have a website, website analytics can be a helpful resource to determine things like where your clients are from, how long they are using your site, the information they access on your website, and a lot more. This information can be a good way to determine how much research your customers are doing before they ultimately make a purchase.

Social Media

You can review trends on social media to determine what kind of products and services are hot topics at any given time. Millions of people use social media to provide various information about their daily lives, and that information can be very valuable to determine trends in consumer behavior.

Keyword Research

When you search a keyword on Google or other search engines, you can often see related information that others search. This type of information can be helpful to determine what customers want in a product or service. It can also predict what kind of products might pair well together for certain types of clients.

Using Data to Conduct Customer Behavior Analysis

Gathering all of this data is the necessary first step to analyze customer behavior. It creates buyer personas based both on your actual customer and your ideal client for your business. It reviews the gathered information and uses it to determine how customers move along the customer journey map, including how they interact with your company along each step in the sales funnel.

Once you put together all the data and pair it with various buyer personas, you will start to see patterns emerge. Ultimately, these patterns will help you dictate how to better serve your customers.

The Overall Goals of the Customer Behavior Analysis Process

You can accomplish a lot by taking a close look at consumer behavior. Examples of how this information might be used include the following.

Personalization

Once you know what your customers want, you can start to personalize their experience with you. Personalization does not just mean that you know a customer's purchase history, however. It also means that you can start to offer or create products that would fit their needs. You can better target advertising. You can even offer the most effective or desirable way for customers to interact with you, such as by incorporating click and collect shopping or virtual scheduling.

Customer Retention

Giving customers products or services they want and making it easy for them to get those products or services is the best way to get customers and keep them. By constantly reviewing what clients' needs may be and developing in that direction, you create outstanding customer loyalty that will last for years to come.

Outpacing the Competition

Providing value to customers is the best way to beat your competition. When you know what customers value, you can make easy progress toward creating happy customers. When customers are happy with your products and services, they are more likely to simply ignore your competition. Understanding what makes your target audience click and catering to them will help your company thrive.

Predicting Market Trends

Customers are not always going to want the same things over time. By gathering data on a regular basis, you can spot trends and make adjustments to take advantage of those trends. Simple communication with your clients will sometimes help you recognize those trends, but you may also have to do a deeper dive into purchase data, social media, and other data sources as well.

For example, McDonald's has long been famous for its fast food—including hamburgers and fries. However, McDonald's keeps a keen eye on customer behavior and noticed a trend of their target customer moving toward making healthier food choices. In response, it added healthy food items to its menu. As a result, it continued to grow and thrive, even when the market took a turn toward products that McDonald's did not offer at that time.

Ombori Can Help Your Company Use Technology to Gather Data About Customer Behavior

Gathering data does not have to be overly time-consuming and expensive. Instead, Ombori can work with you to use technology to gather data and present it to your team in a way that can be easily analyzed and used to influence customer behavior. Learn more by contacting our team or setting up a demo.

 

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