What Is Consumer Behavior? Strategize the Way Your Customers Want

Do you ever look at someone and wonder: what is going on inside their head?

If you’re nosey like me, you want to know why people do what they do. And if you’re a manufacturer, you definitely need to know how your customers found out about your product and why they purchased it.

Analyzing consumer behavior data is your ticket to the show that is consumer behavior.

Some companies use retail analytics software to collect the data necessary for studying consumer behavior. These tools help companies gather and organize retail data, build intelligent dashboards to display real-time analytics, monitor business KPIs, and automate data reports.

This software is often integrated with retail management systems to create a complete data repository for all business operations.

Importance of consumer behavior

Consumer behavior leads to a deeper understanding of target markets. The more you know about your customers, the easier it’ll be for your company to make changes that use your time and money in the best ways.

  • Marketing campaigns: First impressions are everything. Wouldn’t marketing be so much easier if you knew exactly what your target market was looking for? Yeah. Exactly. Consumer behavior data shines a spotlight on the changes you need to make to get to the right people – the ones who want your product or service. That includes understanding who your customers are, where they’re shopping, how they’re purchasing, and why.
  • Customer retention: Companies should ensure that they aren’t only thinking of attracting new customers but also nurturing existing ones. Convincing consumers to make another purchase is quite a hurdle, so once you get them, you’ve got to try to keep them. Repeat customers are more likely to make your product part of their routine and become brand advocates by recommending you to family and friends. 
  • Customer differentiation: Consumers aren’t created equal. Although most companies focus on one target market, the individuals that make up the market have different needs and goals. Get nosey about your consumer base so you can target more demographics. 
  • Competitive analysis: Analyzing your own customers’ behaviors isn’t filling in the whole picture. As helpful as it is to know why people purchase your product, it’s just as important to understand why other people didn’t. It’s essential to look at your competitors’ performance and why some consumers chose them over you. Taking these findings to heart could give you a competitive advantage.
  • Market trends: Studying consumer behavior over time can help you identify peaks and valleys in the industry. Your company will make better decisions about supply when you keep an eye on market trends to better understand where demand is going.
  • Product portfolio management: Understanding your customers gives you much-needed insight into how different products perform. Keeping this information in mind while performing product portfolio management allows you to make supply adjustments to meet demand. If your customers feel much stronger about one of your products, it may be worth allocating more resources to that one and lessening the time and money spent on the others. If the market isn’t resonating with anything anymore, it may be time for a new product.

The 4 types of consumer behavior

There are four types of consumer behavior that a company can study. Individuals may exhibit one or more of these behaviors, and companies must collect data to determine which are most prevalent in their specific consumer base.

Complex buying behavior

Complex consumer buying behavior takes place when a consumer is making a unique purchase. This may be either the process of purchasing an expensive item or something the buyer isn’t very familiar with. In this instance, the consumer spends a lot of time researching before purchasing to make the right decision.

The consumer research phase of this buying behavior may include learning more about the market or consulting friends, family, and experts. The consumer takes this opportunity to develop ideas about what they want from the product so they have the right info to begin forming an opinion. This opinion eventually becomes a preference for certain products that they think will fulfill their expectations. Whatever checks all or most of their boxes gets purchased in the end. 

Dissonance-reducing buying behavior

Dissonance-reducing consumer buying behavior is when a consumer is ready to spend a lot of time making a purchasing consumer decision. This decision may be challenging for them because they’re having a hard time seeing the benefits and differences between several brands. This is especially common when making a large purchase. 

For example, a consumer who doesn’t know much about cars may take a long time to decide which car to purchase. They may have some criteria like four-door, eco-friendly, or comfy seating, but with so many cars that feature what they want, this decision can get incredibly stressful. The main concern for a consumer going through this buying behavior is the fear of making a choice and regretting it later. 

Habitual buying behavior

Habitual consumer buying behavior follows the consumer through exactly what it sounds like: a well-known purchase. In this instance, the buyer is very familiar with the product at hand and most likely already uses it regularly.

This behavior is common for impulse buys because the customer already understands the market. They rely heavily on brand familiarity when making these purchases, but brand loyalty isn’t significant to them because they know many brands that can satisfy their needs. 

Variety-seeking buying behavior

Variety-seeking consumer behavior occurs when a consumer is looking to switch things up. They have most likely been using the same product for a while and want to try something new.

The choice to go in a different direction doesn’t necessarily mean they were unhappy with the experience they had with the previous product. This buying behavior is usually associated with products that are relatively universal across the industry, like ice cream or hairspray. 

Consumer behavior factors

Various factors affect how and why someone chooses to make a purchase. Whether conscious or not, all of these factors affect each individual and make up their unique wants and needs in the buying process. 

Cultural factors

Cultural factors help people create and shift opinions and preferences. Cultural views are created by the values and ideologies of your customers’ communities. These cultural factors include subcultures like religion, ethnicity, nationality, or geographical societies.

Social class plays a considerable role in these cultural factors because if a particular community collectively cannot afford your product or has no use for it in their circumstances, you’re wasting their time. If there aren’t any communities that can see a benefit in your product, it may be worth going back to the drawing board. 

Personal factors

Personal factors have to do with the potential customer and what makes up their individuality. This includes their age, gender, occupation, education level, income, and general lifestyle. 

Age and gender can help companies narrow down exactly who they think their target audience is. For example, if you’re selling insurance, consumer behavior research may show that the people you should be selling to are middle-aged to the elderly. If you’re selling a video game, an analysis probably shows higher interest amongst male teens and young adults. 

Collecting income data is essential when developing a product. If you’re trying to sell a good or service that’s too expensive for your target market, you’re making a big mistake. On the other hand, you can determine if upping your prices is mutually beneficial. Analyzing income analytics of your consumers will show just how much they are willing to spend based on the amount of spending money they have available. 

Occupation and lifestyle are also important personal factors that affect consumer behavior data. For example, if you’re selling dry erase markers, marketing to teachers would be especially important. If you’re selling exercise equipment, you’d want to focus on people who aspire to work out. 

Psychological factors

So maybe you’ve determined that your target market can afford your product. Now, what makes them actually want the product?

The psychological factors that affect behavior are associated with what influences consumers and how they attempt to make purchase decisions. These factors include beliefs, motivations, and perceptions. 

Beliefs play a huge role in whether or not your product is received well. If a certain individual is very passionate about animal rights and your product is made with real fur, your brand does not match up with that person’s beliefs, and they will most likely not become a customer. 

Motivation plays less to what someone wants and more to what they need. A company that sells security cameras relies heavily on the public’s motivation to keep themselves and loved ones safe. 

Perception occurs when a consumer creates a specific opinion about your product. This opinion is usually built upon their perception of your branding and marketing efforts, customer reviews, and general reputation.

Social factors

Social factors are made up of the people in the consumer’s life who can influence them and their decision-making. The major groups that affect these social psychology decisions are the consumer’s family and friends. When a trusted friend recommends a product, the consumer gains an extra layer of security, knowing that the product was successful for someone they know.

88%

of survey respondents said that they trust recommendations from people they know more than any other source.

Source: Nielsen

Situational factors

Situational factors have to do with the environment where the buying decision takes place. They’re temporary factors, but still heavily influence consumer behavior. For brick and mortar shops, this includes the lighting, layout, music, location, and general vibe of a store.

Have you ever gotten so overwhelmed inside a store that you did everything you could to get in and get out quickly? The situational factors in that shop didn’t match up with your personal consumer preferences.

For an e-commerce shop, situational factors include the ease of use of the online store, the colors, page layout, or load time. If a visitor feels unsure about whether or not they want to purchase from you and every webpage takes too long to load for their liking, you’re probably losing a customer. 

Consumer behavior patterns

Companies should keep an eye on several different patterns as they start collecting and analyzing consumer behavior data. Noticing these patterns can help companies investigate what they could be doing differently to make more sales.

  • Place of purchase: Collecting data on where your target market likes to shop is essential. Do they prefer to shop online? How far will they go to get your product? Do they live in a particular country or state? Wherever they are is where you should be.
  • Items purchased: Of course, it’s important to know what a consumer chose to buy! If they purchased your product, what drew them to it? If they chose a competitor, what convinced them it was the better choice?
  • Time of purchase: Some people like to shop in the morning, and others like to shop at night. For me, the limit does not exist. But when it comes to your customers, it’s important to note when they want to buy your product. 
  • Purchase frequency: As important as it is to know why they made a purchase, it may be even more important to know if and why they decided to repurchase. If a consumer decides not to repurchase, conducting surveys to gather constructive feedback is valuable. 
  • Purchasing method: With all the different methods of shopping these days, it’s become increasingly important for companies to know where their customers prefer to make a purchase. This can help them determine whether to set up an e-commerce website or brick and mortar store. 

Stages of consumer behavior

Understanding these five main stages a consumer follows as they move through the buying process can help companies target potential consumers at every step of the way.


  1. Problem: Every purchase begins with the need for something. At this stage, the consumer has determined that they must make a purchase to fulfill a demand. 
  2. Information: The next stage holds the market research portion of consumer behavior. At this point, the consumer begins looking for potential solutions to their problem. They usually have a price point in mind or a store location where they’d like to shop. Collecting information includes reading online reviews or asking friends and family for recommendations. 
  3. Solution: Once the research and information phase is over, the consumer homes in on finding the product that solves their problem. This includes comparing different products and looking at expert reviews to differentiate the options even more.
  4. Purchase: The consumer makes their decision and purchases the product. They have their fingers crossed that the product delivers on its promises. 
  5. Review: At the end of the process, the consumer may use their experience, whether positive or negative, to influence others. The buying process is over for this consumer, but for another, it’s just begun.

Benefits of studying consumer behavior

Collecting and analyzing consumer behavior takes a lot of effort, but it’s always beneficial to have more information than not enough.

  • Improved customer satisfaction: The more you know about your customers, the more you can tailor the user experience to their needs. When people feel understood, they’re more likely to make a purchase and become loyal customers.
  • Enhanced marketing efforts: Sure, you’re probably already doing some marketing. But marketing with consumer behavior in mind takes personalization to the next level. People want an individualized experience when it comes to shopping, and analyzing consumer data can help you make your marketing strategy and campaigns way more effective.

75%

of consumers are more likely to buy a product from a brand that offers a personalized experience. 

Source: Yieldify

  • Better use of resources. Marketing isn’t the only place where you can save some time and money on revisiting consumer behavior data. If a lot of your customers are shopping online, an e-commerce element will open up your horizons. If your target market’s income level doesn’t match your prices, take another look at that profit margin. If your consumer base prefers shopping in the morning, simply adjusting your hours of operation could bridge a gap. 
  • Balanced supply and demand. Collecting data on your customer base also means collecting data on the industry. If you hold onto that historical data, you may start to notice trends. For example, if you sell hurricane impact windows, more of your customers are going to come through at the beginning of hurricane season. If you sell sweaters and jackets, you’ll see an influx in sales during the colder months. Using this data effectively can help you ensure you always have supply to meet demand. 
  • More powerful persuasion. At the end of the day, you want potential customers to choose you over your competitors. Analyzing consumer behavior and utilizing your findings to fine-tune the user experience can convince people to stop searching and purchase your product. 

Consumer behavior challenges

There are a couple of challenges that a company may face as they begin collecting and analyzing consumer behavior data. It’s important to keep these in mind to manage expectations and prepare backup plans.

  • Consistency isn’t guaranteed. Data is extremely valuable and helpful when it comes to analyzing consumer behavior. However, this data is never truly and completely accurate. Why? Not trying to drag the human race, but people aren’t consistent. Consumer behavior can change at the drop of a hat, so data is only as accurate as the moment it was collected. Consumer behavior analysis needs to be a constant process so your interpretations of the data remain as ever-changing as the minds of those you’re studying.
  • Perspective limitations. You can’t interview all of your customers. This can give you a pretty limited view of your target market’s behavior. 
  • Consumers are not made equally. As I mentioned earlier, the human mind is difficult to study. There can be 100 consumers in a room, and every single one of them may have a unique reason as to why they bought your product. No one said it’d be easy to please the masses.

How to collect consumer behavior data

Collecting consumer behavior data is all about getting out there and connecting with your target market. There are many methods for doing just that. 

g2 survey

  • Surveys/questionnaires: The best time to collect data is right after a purchase is made and then not too long after that. Immediately after the purchase, consider sending out a survey to learn about the buying experience. A while later, send out a survey to hear about their user experience so far and whether or not they see themselves repurchasing. Sweeten the deal with an incentive to buy again, like a promo code or coupon.
  • Focus groups: If you’re lucky enough to get a good group of consumers together, you can ask tailored questions to get their honest answers. 
  • Customer feedback: Before getting sad that you lost a customer, consider it a blessing. Constructive criticism is hard to come by and hearing it straight from these previous customers can help you make the changes necessary. Take feedback to heart, and you may even win some people back!
  • Online tracking: We all love a good spy moment. Not to scare you, but companies are already keeping an eye on you. Companies use things like cookies to understand where their customers are and what they’re doing on the internet. Online behavior tracking not only collects data about companies’ customers, but targets them with advertisements directly.
  • Social media monitoring: If spying isn’t your thing, lucky for you, there’s (too much) information out there that consumers are already sharing! Social media is a great resource to see what your target market is talking about and what’s trending within the industry. These days, social media is also favorable for finding unfiltered feedback. A lot of companies use social media monitoring software to automate the way they collect and interpret this information.
  • Positive incentives: Whether your consumer’s love language is receiving gifts or not, everyone loves a free something. To make collecting data that much easier, consider offering rewards to those who participate. This could be through shopper points, coupons, or promo codes. 

Wyd?

It’s time to figure out what your customers are doing. 

Consumer behavior gives you the key to a universe of information. Whether you’re trying to improve marketing efforts, figure out why people are buying, or determine where your competitors are holding the upper hand, consumer behavior data is here to answer all of your questions.

Once you understand why your consumers act the way they do, consider analyzing customer experience metrics to improve their interactions with you!

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