4 Questions You Need to Ask About Consumer Behavior

4 questions to ask about consumer behavior
People aren’t as rational as we think they are. You might not even realize the irrational decisions you make throughout the day. Being able to recognize and point out specific but repetitive consumer behaviors can really help you understand why people buy what they buy.

Particular to this topic, I recall an excerpt from a book called Predictably Irrational by Dan Ariely. In the book, he describes the psychology around why people (you guessed it) behave irrationally when faced with product packages or deals and advertisements. Have you ever considered why you would be willing to spend an extra $2,000 dollars in a car purchase that includes cosmetic upgrades compared to the base model, while you are reluctant to spend $2 extra dollars on a better quality pen? When you can better understand the behavior of your consumer, your deals may close faster than ever.

Who are your customers?

It may seem like a fairly simple question all businesses should know but do you really know who they are? I would assume that you know who your target market is, if not at least an idea. Similar to an author who should know who their audience is to optimize their language and writing style, firms should know who their customers are to better alter the message to appeal to their market. Knowing the different groups of people you are trying to target can help in predicting their purchasing behavior. Are you looking deeper into your audience? Studies show that a person’s age, cultural background, location, and class matter in their buying habits. Consumers in different social classes display different desires and requirements when making a decision. What are the social factors that affect them? Companies often have celebrity endorsements because “consumers seek to imitate others whom they admire, and may buy the same brands”. The more you know, the more you sell.

How do your customers research your product?

You can’t just throw your product out on there, cross your fingers and hope for the best. These days even a basic website is not enough. We live in a world where information sharing is at its greatest with the internet at our fingertips and Yelp is a tap away. People have access to research and dig up all the information and impressions about you and your products as well as your competitor’s. What outlets are your audiences turning to when they want to know more? If you realize that your product is effectively being passed on through recommendations, you can build your campaign around that to increase recommendations from existing users to new ones. If your customers research your product primarily by themselves on the internet, then you would want to best optimize your website rather than through newspaper ads. It’s all about where you concentrate your efforts to bring in new clients.

What need does your product satisfy?

You are selling your product because you believe that someone out there has a need or desire for it. If not, what are you doing here? If you are really good, you are selling to your customer something they never knew they needed. Consumption behavior varies by multiple characteristics of the consumer. What do people do when they have a plethora of options to choose from when selecting what toothpaste they want to buy? How are you getting your point across that you are the product that your client needs, not your competitors. Information and advertisements seem to be catapulted towards us wherever we go; billboards, video ads, product placement, on your way to work, on your coffee mug, you name it. It’s become integrated into our lives that we barely notice it. Information is oversaturated, and how do we process all of that? We don’t. We selectively hear what we want to hear and the rest is white noise. It is like there is a filter catching only relevant words or phrases that appeal to a consumer’s desires. “Consumers will also be much more attentive to stimuli related to a need.” Your job is to study and optimize that and incorporate it into your selling strategy.

What are your competitors doing?

It’s good to keep your clients close but your competitors closer. Pay attention to what they’re doing and why certain customers may choose their product over yours? Are there features they possess that you don’t? How would you increase your product’s appeal and key attributes that will make them choose yours over your competitors? Compensatory decision making often occurs when your consumer is evaluating the good and bad from each producer. How can you sell so that your “good” outweighs our competitor’s “good”.

This is only a small fraction of understanding consumer behavior but you’ve got to start somewhere. Good luck out there!

Do you agree or disagree? Contribute to the conversation and let me know your thoughts on consumer behavior. Any tips and tricks under your sleeve?


Sources:

consumerpsychologist.com

managementstudyguide.com

theconsumerfactor.com