We are all — regardless of sector — in the business of bringing to market goods or services to meet our customers’ needs. But how can you do that if you don’t know how and why your customers buy?
That’s why understanding consumer behaviour, the dynamics of how and why your customers make buying decisions, is essential to the success of all businesses. At its most basic, it is understanding how consumers buy goods and services, use them and, ultimately, dispose of them. (The latter can be important since, some goods may be gifted or resold.)
Having emerged in the 40s and 50s as a subset of marketing, this cross-disciplinary science looks at the stages of purchasing decisions from the recognition by your customer they have a problem, search for information and evaluation of options to the final purchase decisions and post-purchase evaluation. Countless research has been done over the past seven to eight decades, and we could fill a library of books covering the topic. But today, paying attention to your time, I want to discuss why it’s crucial you learn more about consumer behaviour and incorporate its study into your business. In future blogs we’ll drill down even further to look at some tips and considerations you should be making.
From a marketing perspective, studying consumer behaviour will help you to better connect with, motivate and inspire your customers, but it is much more than a marketing tool. Understanding, at least partially, the cultural, psychological, anthropological, social and economic factors that affect our customers’ lives and buying decisions helps us to not only meet their needs today but anticipate future ones — it informs us what drives the needle and influences them. You can see why then, when developing business plans this year and moving forward (as well as the obvious sales and marketing ones) consumer behaviour must be an integral part.
We have touched on this blending of social sciences in the past; how emotions play a far larger role in our purchasing decisions than we believe. To succeed in business, you must not simply address the practical or rational needs of your customers (“the problem”) — for example, providing them the tool needed for a job — but also their hidden emotional needs. This may be the need to feel in control, to feel loved, or, increasingly, a desire to have a positive impact.
For example, your customers —like your employees (who, let’s face it, are themselves consumers) — increasingly need to feel that those they do business with care about what they care about. Put simply: consumers have become more socially conscious and some are speaking with their billfolds. Recognizing this is a perfect example of seeing how consumer behaviour can and should affect your business. Knowing how top of mind issues such as the environment are to your customers, you can tap into that passion. Is your customers’ social awareness, and how it influences their purchases, changing the way you do business? It should be.
Developing a deeper understanding of the behavioural dynamics that impact consumers will open doors to better engage and interact with your customers. Take that critical stage in which they are investigating options. Think of how social media has grown as a source of influence during this point in the purchasing decisions. It’s safe to say few imagined this phenomenon 10 years ago. Those who did are capitalizing on it, seeding social media influencers into the market, using Twitter and Facebook to build rapport and connect with their customers. And, reaping the rewards as their customers become their chief advocates, spreading their brand to friends, family and followers.
The benefits of understanding consumer behaviour does not begin and end with your brand. It can drive the successful decisions and priorities you make moving forward. You should, for instance, be tapping into what you know (or learn) about your customers buying behaviour to modify or develop goods and services that better meet their needs. You can use what you know about how they use your products or services to refine, innovate and improve them to drive more love for them by better solving the problem and meeting the hidden needs.
Of course, demographics and the changing face of your customers — be it age, generation, gender, ethnicity or socioeconomic status — play a major role in better understanding consumer behaviour. In our next blog, in fact, we’ll look at this and considerations you must make to better reach the 21st century customer.
After all, the more you know about your customers, the more you know about your own business.