These companies have spent billions of dollars investigating consumer behavior in an attempt to understand how people make buying decisions and what causes them to act in certain ways.
Even though your company might not generate as much revenue as some of the bigger companies out there, the fact that you know what drives your target customers’ buying decisions makes you just as valuable. With this knowledge, you can sell a lot of Knowledge Commerce products.
Even though you don’t have billions or trillions of dollars to spend, there are ways you can be creative about collecting and analyzing consumer behavior data. This guide will show you how to process this data and several models you can use to get to know your customers better.
In addition, we will help you understand what consumer behavior looks like and how to identify it.
What is consumer behavior?
The behavior that consumers display when making a purchase is known as consumer behavior. This includes a series of patterns or behaviors that consumers follow, starting from when they become aware of a need or desire for a product, to when they make the actual purchase.
Some customers might purchase every product a company produces while others might only purchase one product and then not return.
You can learn about your customers’ habits and how they interact with your products through consumer behavior. This information can help you make future decisions about product creation.
Several factors go into the definition of consumer behavior, including the following:
- How consumers behave individually and in groups
- Why consumer behavior patterns change based on the types of products and services they purchase
- When consumers are most likely to make a purchase
- How a customer feels directly before buying a product
- How that customer feels directly following the purchase
- Which questions or objections contribute to the buying decisions
- The number of touchpoints a customer makes with a brand or product before buying
If you don’t know how to anticipate your target customer, it will be difficult to effectively market to them. All of the factors mentioned are essential to understanding customer behavior.
Why should you study consumer behavior?
Studying consumer behavior can help you understand how to create, market, and sell your digital products in an effective manner. The more data you gather, the better your decisions will become.
Imagine, for instance, that you’re creating an online course for people who want to learn how to play the guitar. You would probably enjoy more success if you knew several things about your target market:
- Whether they had bought any other music-related educational products
- How much time they have to devote to learning to play the guitar
- What motivates them to learn guitar
- How much money they can allocate to musical education
- What pain points they experience
- Whether they have any objections to learning the guitar online
- What questions they have about online musical education
You can find the answers to all these questions by researching consumer behavior. Therefore, you should include this process in your workflow.
What is consumer behavior in marketing?
Does the person view the post and then quickly scroll past it, or does the individual read the post and then leave a comment? The way a target market responds to marketing materials is known as consumer behavior in marketing. For example, if someone from your target audience views one of your Facebook posts, how do they react? Do they view the post and then quickly scroll past it, or do they read the post and leave a comment?
The other side is making sure that your customers actually want to buy your product. Marketing and advertising may be essential to running your own business, but that’s only part of the equation. The other part is making sure your customers actually want to buy your product.
Nobody can force consumers to buy your digital products.
If you want to create marketing materials that are more likely to be successful, you should learn more about consumer behavior. This will help you to create better copy, choose images that are more effective, and send messages that your audience will respond to.
You want your marketing strategy to be in alignment with what you know about consumer behavior. Consumer behavior varies depending on the product, so you need to analyze the data available to you.
The three factors
What drives consumer behavior?
Psychology
The psychological state of a person before, during, and after a purchase largely affects what and how much they buy.
Imagine that you’ve just broken up with your significant other. You feel isolated, exposed, and sad.
If you go to the supermarket, you will probably buy a lot of comfort food. This food might not be healthy, but it is what your brain wants.
Even though the author is talking about food, they want to move back to the example of the online course for beginner guitar players.
The psychological factors that might be involved in someone’s decision to learn music could include regret for not having learned sooner, or a desire to be able to play a song at a friend’s wedding.
Personality
Did you ever feel pulled towards a brand or product? Maybe the packaging caught your eye, or maybe you felt empathy for the brand’s message.
A number of brands give a cut of their earnings to charitable organizations because they are passionate about a particular cause. By running their businesses in a certain way, they are able to contribute to the advancement of the said cause.
There are many factors that go into why people are drawn to brands. Some people are drawn to brands that don’t take themselves too seriously, while others are more likely to buy a product if the seller shares their beliefs.
Learning about consumer behavior is key for marketers. It’s important to realize that your brand won’t appeal to everyone and that’s okay. The goal is to get your message in front of those who it will resonate with.
External Motivators
The need to fit in and belong somewhere is hardwired into our brains and shows up in every area of our lives. We’re all easily influenced and it’s hard to admit. The need to fit in and belong somewhere is hardwired into our brains and we can see it in every area of our lives – not just when we’re in high school and being peer pressured.
Your best friend has just bought an online course on living a clean and healthy lifestyle. They are telling you about all of the great information they learned and how it has changed their perspective on diet, exercise, and health.
If someone you trust endorses a product, you are more likely to buy it because it seems like a less risky proposition. If you had just found the product on the internet, you might not have given it a second thought.
Other motivation that comes from external sources can be less long lasting. You may see a product that a celebrity or industry professional has recommended. Just seeing a headshot and a quote from that person can make you want to buy the product.
Contemporary Models
Contemporary models of consumer behavior tend to focus on rational and deliberate decision-making processes, rather than emotions or unconscious desires.
1. Engel-Kollat-Blackwell (EKB) Model of Consumer Behavior
The Engel-Kollat-Blackwell model is a five-stage model that outlines the decision-making process that consumers go through before purchasing a product or service.
- Awareness: During this stage, consumers view advertisements from a business and become aware of their need, desire, or interest, to purchase what they’ve just discovered.
- Information Processing: After discovering a product or service, a consumer begins to think about how the product or service relates to their past experiences or needs and whether it will fulfill any current needs.
- Evaluation: At this point, consumers will research the product they’ve discovered and research options from competitors to see if there is a better option or if the original product is the best fit.
- Purchasing Decision: A consumer will follow through with a purchase for the product that has beat out competitors to provide value. A consumer may also stop the process if they change their mind.
- Outcome Analysis: After making a purchase, a customer will use what they’ve bought and assess whether their experience is positive or negative. After a trial period, they’ll keep a product and maybe decide to become repeat customers or express dissatisfaction and return to stage three.
The goal for businesses with many competitors offering similar products or services is to outshine them by meeting customers at every stage of their journey.
2. Hawkins Stern Impulse Buying Model
According to this theory, shoppers buy on impulse when they see something they want and can’t control themselves. This theory suggests that people are more likely to make decisions based on their emotions rather than logic. The Impulse Buying theory argues that people don’t always make purchase decisions based on rational thought. According to this theory, shoppers are more likely to make impulse buys – that is, buys based on emotions rather than logic – when they see something they want and can’t control themselves. These are certainly impulse purchases, but Hawkins Stern categorizes them into four different types:
- Escape Purchase: Sometimes called pure impulse, this involves purchasing an item that isn’t a routine item or on a shopping list. Consumers are drawn to these items through appealing visuals.
- Reminder Purchase: A consumer makes a reminder impulse purchase when they come across a product through in-store setups, promotional offers, or a simple reminder that a product exists, like a strategically placed ice cream scoop in the freezer aisle of a grocery store.
- Suggested Purchase: Suggested impulse purchases occur when a consumer is made aware of a product after a recommendation or suggestion from an in-store salesperson or online algorithms. For example, seeing an ad that says, “Other people who bought this shoe you’re about to buy also purchase these socks.” The consumer didn’t know the socks existed, didn’t plan to buy them, but now the suggestion has told them that they need them.
- Planned Purchase: Although planned is the opposite of impulse, these purchases occur when a consumer knows they want a particular product but will only buy it if there is a deal involved. An unexpected price drop could lead a customer to make a planned impulse purchase.
The Hawkins Stern Model can be used to improve the customer experience for businesses that don’t have limits on what their customers will buy. This can be done by care into product displays, creating AI algorithms for online shopping, or placing items on sale to appeal to customers who are planned purchase impulse buyers.
3. Howard Sheth Model of Buying Behavior
The Howard Sheth model suggests that the buyer’s journey is a very logical and well thought out decision making process. In this model, the customer is considering different options and factors at every stage of the journey.
According to this model, there are three successive levels of decision-making:
- Extensive Problem-Solving: In this stage, customers know nothing about the product they’re seeking or the brands that are available to them. They’re in active problem-solving mode to find a suitable product.
- Limited Problem-Solving: Now that customers have more information, they slow down and begin comparing their choices.
- Habitual Response Behavior: Customers are fully aware of all the choices they have and know which brands they prefer. Thus, every time they make a purchase, they know where to go.
But these stages aren’t that simple. According to the Howard Sheth model, I was under the sway of several stimuli during this process:
- Inputs: This refers to the marketing messages and imagery a consumer receives while they’re going through the decision-making process. “Inputs” also refers to any perceptions and attitudes that come from the consumer’s social environment, such as their friends, family, and culture.
- Perceptual and Learning Constructs: This may sound complicated, but this stimulus is simply the customer’s psychological makeup and psychographic information. Perceptual and learning constructs may include needs, preferences, and goals.
- Outputs: After inputs and perceptual and learning constructs are mixed together, you get the output. The output is the customer’s resulting action under the influence of marketing messages, social stimuli, and internal psychological attributes. It can result in the customer paying more attention to a certain brand over another.
- External Variables: This is anything that’s not directly related to the decision-making process, such as weather or religion, that still may sway the customer’s decision.
4. Nicosia Model
The Nicosia Model focuses on businesses rather than consumers. It argues that companies’ marketing messages have a big influence on whether customers will make a purchase.
This model may be appealing to businesses because it gives them more control, however, it’s not wise to ignore the internal factors that influence a customer’s purchase decision. In other words, even if you have the best marketing copy, a customer’s internal attributes may still have more influence in some cases.
The model is comprised of four “fields”:
- One: The business’ characteristics and the customer’s characteristics. What does your marketing messaging look like? And what’s your customer’s perception of that messaging? Are they predisposed to be receptive to your message? The latter is shaped by the customer’s personality traits and experiences.
- Two: Search and evaluation. Similar to the Howard Sheth model’s “limited problem-solving” stage, the customer begins to compare different brands here based on the company’s messaging.
- Three: Purchase decision. The purchase decision will occur after the company convinces the customer to choose them as their retailer or provider.
- Four: Feedback. During the feedback field, the company will determine whether it should continue using the same messaging, and the customer will decide whether they will continue to be receptive to future messages.
Your Customers Will Inform Your Strategy
If you create buyer personas, you’ll have a better understanding of how your customers plan to purchase your products and services. If they say a deal is enticing, pay close attention to the Hawkins Stern Impulse Buying Model. If they report strong ties to their social groups, refer to the Sociological Model.
Your customers are the key to your success. By understanding their buyer behavior and listening to their feedback, you can create a personalized shopping experience that will keep them coming back for more.
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