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Every person walking into a store or looking at products on an e-commerce website takes a series of actions before they zero in on the product or service they want to buy. This could involve researching product features, looking at reviews on eCommerce sites or social channels, comparing products, and more. These series of steps, what influences them, and what finally drives a consumer to buy a service or product is called consumer buying behavior.
Understanding consumer buying behavior is crucial for effective business strategy as it can help businesses successfully reach and serve their target customers. Buying behavior provides insights into what prompted a consumer to ultimately make a purchase or not. Insights gained from the buying journey and the influencing factors can help inform marketing and operational decision-making, leading to better strategy and marketing communications.
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Definition of Consumer Buying Behavior
Consumer buying behavior refers to the series of actions that consumers take before making a purchase of any product or service. It involves all the steps, from the first awareness stage to the evaluation and market research before the final step of making a purchase.
Factors that influence buying behavior could range from personal influences such as age, income, and occupation or psycho-social factors such as beliefs or motivations, or influences from family/friends and other social groups such as coworkers. These factors play an important role in the individual’s buying decision and are important for businesses to analyze to inform strategy.
Understanding consumer buying behavior is important for businesses across industries and have many benefits such as:
1. Identifying the right audience: Analyzing consumer buying behavior can help businesses identify their ideal target customer and optimize their sales and marketing efforts, leading to better ROI and profitability.
2. Improve customer experience and satisfaction: Understanding the preferences of consumers can help businesses tailor their products and services to address the consumer’s needs. This can in turn lead to a higher level of satisfaction and experience and therefore, improved customer loyalty.
3. Improve marketing ROI: Better insight into what appeals to customers can lead to effective marketing campaigns. This can also include identifying the best channel to reach the target audience and writing messaging that is more likely to persuade them to buy the product or service.
4. Drive sales and revenue: Ultimately, understanding consumer buying behavior can help sales teams better understand how to sell and who to sell to. Reaching the right target audience with effective sales strategy informed by consumer insight can lead to increased sales and revenue.
Who are the Four Types of Customers?
There are many ways to classify customers, based on psychology, buying behavior or even buying intent. But one common method that marketers use is based on a theory used in psychology called the ‘Four Humours or Temperaments’. When classified this way, consumers can be classified into four categories based on their personality type. These are:
1. Analytical: Consumers belonging to this category are logical and analytical. They tend to take a methodical and logical approach to decision-making. They do thorough research on the product or service, ranking various options based on their features and make a logical choice at the end of the evaluation stage.
2. Driver: Consumers in this category are decisive and purposeful. They have a strong sense of purpose and are usually ambitious, but are also not scared to take a risk. If they have a preference for a certain brand or product they tend to be loyal. They also tend to follow trends or are likely to be the trendsetters themselves and tend to concentrate o their preferences than relationships in the buying process.
3. Amiable: Consumers in this category are warm and friendly. If they have had a good experience previously interacting with a brand, they are likely to avail the service or buy the product again even if a feature-rich competitor exists. They struggle with making big decisions.
4. Expressive: Expressive buyers place a high value on relationships and experience. They like feeling valued as a customer and enjoy perks in return for loyalty. They like to be involved in the whole journey or process and are likely to establish relationships at their local stores or coffee shops.
Some consumers can exhibit traits of more than one type, so these are not mutually exclusive. By analyzing actions taken by the consumer during the buying process and matching them to these types, businesses can better understand and predict their behavior.
What are the Stages of the Consumer Buying Process?
The specific steps taken by consumers to buy a product or service can differ based on the type of product, their individual preferences and more. But a few common steps can be identified across industries and product types. These are generally classified into five stages:
1. Awareness / Problem Recognition: This is the first step when the consumer is first aware of the need or want for a product or service.
2. Research: Having become aware or identified a need or want, in this stage the consumer seeks more information on the product or service. This usually involves visiting websites or reaching out to those in their social circle that might have used the product or service.
3. Comparison: Now that they have learned more about the product and what type of product might fulfill their needs, they look at the various options available on the market. This typically involves comparing similar products and services from different brands considering factors such as popularity, price, quality or scores on review aggregator sites and more.
4. Decision stage: With a thorough pros and cons list, the consumer is not able to make the decisions and make a purchase decision.
5. Post-purchase evaluation: After the consumer has bought the product or the service, they evaluate the performance of the product, their satisfaction with their experience as consumers, and more. On the basis of this stage, they will decide if they become repeat customers or recommend it to others or not.
The Need for Consumer Insights and Data
Based on insights from these stages, businesses can evaluate where their product or service failed to meet the consumer’s standards or understand what helped them choose their product. Without reliable customer data on the consumer’s preferences, demographics, interests or past buying behavior, businesses cannot accurately predict their buying behavior.
This is where a data intelligence platform can be useful. With access to accurate, privacy-safe data on consumer behavior trends, businesses can learn more about what motivates their customers, what factors influence their decision making and more. These insights can be used to customize products or services to better meet their needs, improve customer experience and thereby driving more sales and revenue.
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