How to understand consumer behavior
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 9, 2022
How to understand consumer behaviour
One of the most important aspects of any business is understanding who your
customers are. Without this knowledge, it can be difficult to create content, design products
or market your business in a way that appeals to them.
In this post, we will define the idea of consumer behaviour in marketing and discuss
some methods for understanding your customers so you can know them on a deeper level.
This allows you to create a customer base that is more loyal and likely to return to your
business.
What is consumer behaviour?
Before we look at how to understand your consumers, it’s important to first define
consumer behaviour. Consumer behaviour in marketing refers to the actions and decisions
that people make when they are purchasing or using products.
Consumer behaviour towards a product includes everything from the initial decision to
buy it, to how they use it and whether or not they continue to purchase it in the future.
There are a number of factors that can influence consumer behaviour, including
Personal — age, gender, and income
Social — family and friends
Cultural — religion and traditions
Psychological — motivation, perception, learning
Consumer psychology in particular is an important field of study within marketing as it
helps businesses to understand why people make the decisions they do. You can find out
more about consumer psychology with Coventry University’s Consumer Behaviour and
Psychology course.
Why consumer behaviour is important for businesses
Understanding consumer behaviour is important for businesses because it can help
them to make better decisions about their products and services. By understanding why
people purchase certain products and how they use them, businesses can adapt their
offerings to better suit the needs and wants of their target market.
This means you can greatly influence your customers’ decision-making process. You can
learn more on how to do this with the Behavioural Science: Influencing Behaviour and
Designing Decisions ExpertTrack by FutureLearn.
Understanding consumer behaviour can help businesses to create more effective
marketing and advertising campaigns that are better at reaching and influencing potential
customers. And the good news is, that you can find out a lot about your customers with a
few simple methods of gathering customer insight.
What is customer insight?
Customer insight is the process of understanding your customers on a deeper level. This
includes understanding their needs, wants, behaviours and motivations.
Customer insight can also help you to understand:
How your customers interact with your business
What they think of your products or services
Why they continue (or don’t continue) to do business with you
The importance of behaviour characteristics cannot be understated as it helps to
segment customers, understand their preferences and target them with personalised
messages to maximise sales. Using multiple methods will help you form a well-rounded
picture of your customers. To find out more, look at our next step Selling Through Customer
Insight.
What customer insight can be used for
Below, we discuss some of the top uses of customer insight so you can see why it’s
worth learning more about. You’ll find that your business can benefit in a number of ways
by implementing customer insight strategies.
Hyper-personalisation
By understanding your customers on a deeper level, you can create a more
personalised experience for them. This could include things like tailoring your marketing
messages or product recommendations to their specific needs and interests. Gathering data
for hyper-personalisation can be done through browser history, purchase history and even
social media activity.
Thanks to AI today, businesses have more opportunities than ever to create truly
personalised experiences for their customers. For example, product recommendations can
be driven by AI, and retargeted ads based on a customer’s previous interactions are an
efficient way of getting them back to your website. This could be the difference between a
browser and a customer, or a one-time customer and a lifelong fan.
Customer journeys/touchpoints
By understanding how your customers interact with your business, you can identify pain
points and areas for improvement. This could involve anything from simplifying your
checkout process to making it easier for customers to find the information they need on
your website. This is where user experience (UX) design can be extremely helpful.
UX is all about understanding how people interact with your website or app, and
making sure the experience is as smooth and easy as possible. This can significantly help
convert browsers into customers.
Product development
By understanding what your customers want and need, you can develop products that
better meet their expectations. This could involve anything from adding new features to an
existing product to developing a completely new product. You can also use customer
insights to determine the best way to position and market your products.
For example, if you know that your target market is environmentally-conscious, you
could position your product as eco-friendly. On the other hand, if your target market is
budget-conscious, you can use this to optimise your pricing strategy.
