Understanding consumer behavior: How to influence the decision-making process?
Influencing consumer behavior requires an understanding of consumer decision-making processes. It is well established that consumers can be understood as personas and their behaviors can be predicted, if not overtly predicted, in a way that meets both their needs and desires and those of the product or service provider.
What is Consumer Behavior?
Consumer behavior deals with how individuals and organizations make purchases and support brands. In order to influence the final buying decision in the best interests of both the consumer and the provider, you must understand that the buying journey consists of both small and large consumer behaviors.
Why is Consumer Behavior so important?
Consumer behavior determines which channels the consumer will use to make a purchase decision. Of Course, each consumer makes decisions in their own unique way. Nevertheless, it can be studied and predicted in spite of its uniqueness.
The decision-making process and consumer behavior go hand-in-hand, as consumers exhibit certain behaviors during the buying journey. Research and understanding target audiences, as well as their respective behavior, allow us to guide or "help along" the consumers’ thoughts, feelings, and actions - help them make a satisfactory choice.
Benefits if understanding consumer behavior:
- Product or service providers can increase their marketing and communication effectiveness by tailoring them to their consumer.
- Product or service providers can identify growth opportunities in products or services and develop strategies for retaining customers.
- Businesses can customize their products according to consumers’ needs. As a result, customer satisfaction will increase, which leads to increased loyalty, or even advocacy.
- Business owners can improve their brand's perception by making changes. You might want to investigate customers complains, for example.
- Businesses are able to predict market trends better, which allows them to make better-informed decisions - thus increasing sales and brand loyalty.
- To remain relevant, businesses can take advantage of consumer behavior to improve customer interaction.
- By identifying their target market and addressing the needs of that market, product and service providers can increase sales.
- Businesses can innovate new products and services that meet their target audience's needs and wants better than their competitors.
The key factors that affect consumer decision making
Consumer behavior is influenced by certain key factors.
- Personal influences: These include demographics, personality traits, and other factors that affect people's responses to products and services.
- Psychological influences: Consumer perception, mindset, and perception of the provider and its services and/or products.
- Social influences: Consumers can be influenced by a social circumstance that they are already in or a social circumstance that they aspire to be in. The list includes family and friends, acquaintances, and - due to social media - complete strangers.
- Situational influences: The time of day, the holiday, as well as the mood of the consumer.
The consumer decision-making process steps
The consumer decision-making process is also widely known as the buyer's journey.
- Awareness: the consumer first becomes aware that they have a problem.
- Consideration: the consumer feels and thinks about ways to solve their "problem."
- Decision: the consumer homes in on their final choice.
Consumer behavior trends
With the advancement of technology and changes in consumer lifestyles, trends in consumer behavior allow us to predict how consumers will behave in the future.
- Transparency: In general, consumers prefer companies that share their values and beliefs.
- Online purchases: The trend of consumers shopping online was evident even before the pandemic. The pandemic grew this trend exponentially.
- Concerns about online security: Online privacy and security are becoming more important to consumers.
- Preference for eco-friendly companies: Climate change is top of mind with consumers.
- Personalization and customization: Consumers want to feel like they have a unique experience.
If businesses can determine what factors influence the buying decisions of their prospective customers, they will be able to refine and tailor their strategy and improve how they sell their products and services to their target audience.