How Understanding Consumer Behavior Can Help You Convert More Customers
If you had the chance to read the minds of your customers, would you take it?
We’d be willing to bet your answer to that question is “YES!”
Understanding the way the human mind works—especially when it comes to the buying journey—is a crucial element in finding creative ways to engage customers and move them toward conversion.
Every person is different, yet in many ways our brains are wired to react in a similar manner. Studying consumer behavior helps us understand the motivations behind purchasing decisions—i.e., what makes people choose certain products and services over others.
Gathering this kind of information about your customer base can help you understand what your customers are looking for so you can:
Fill in gaps in the market
Present your products for maximum impact
Reach and effectively engage your audience
Understanding consumer behavior allows you to notice trends and patterns that can help inform your sales and marketing strategy, improve your products and services, and convert more customers.
3 Types of Buyers
Consumer behavior identifies how people make purchasing decisions and how their emotional, mental, and behavioral responses influence those decisions. Generally speaking, there are three types of buyers you will meet:
Spendthrifts. These are people who spend more before they hit their maximum buying pain. They are typically younger (in their 20s), and make up 15% of the population. It doesn’t take much to convince them to buy.
Unconflicted, or Average Spenders. These consumers don’t spend as freely as spendthrifts, but aren't as difficult to convert as their more financially conservative peers. Making up 61% of the population, they buy only when they think spending their money is worthwhile and the product or service meets their needs sufficiently. They take time to weigh their options, but are ready to buy if they think it’s worth their money.
Tightwads. Making up 24% of the population, this group spends less before they hit their maximum buying pain. Ultimately, they don’t spend money until they have to, and are adamant about collecting a significant amount of information about a product and analyzing the pros and cons before they buy.
As you might guess, tightwads are the most difficult customers to convert. To convince them to buy, you need excellent salespeople who can minimize their buying pain.
A couple of tactics that work are: reframing the value of the product—for example, stating the value as a monthly payment rather than one lump sum; or conversely, bundling accessories together into one purchase to create one pain point vs many.
And in your marketing and display materials, choose your words wisely. Use wording that minimizes, such as “the low price of,” “a small monthly fee,” and so on.
How Does Understanding Consumer Behavior Lead to Increased Conversions?
These buyer types exhibit just one element of understanding the behavior of today’s consumer. You also need to consider the many things that influence consumers to buy, such as economic conditions, personal preference, and marketing. Take a look at our recent blog covering 5 common influences of consumer behavior to learn more.
Once you have a better understanding of consumer behavior, you can use that information to improve your sales. Understanding consumer behavior allows you to:
Gain Insight Into Your Customers’ Decision-Making Processes
Gathering this kind of information about your audience gives you insight into important patterns in customer sentiment and behavior. Social media analytics, for example, give you insight into what customers are saying and how your brand resonates with both existing and potential customers.
Consumers go through the same five stages in the buying process, regardless of what they’re buying:
Recognizing a problem or a need that must be met.
Gathering information about different products and brands.
Evaluating alternatives—comparing the different options available.
Making a purchasing decision based on the evaluation of available offerings.
Post-purchase behavior—comparing their expectations with their actual experience of the product.
Understanding consumer behavior can help you adjust your marketing strategy to steer customers toward choosing your brand.
Better Engage Your Audience
Understanding consumer behavior can help you form a consistent message that resonates with your target audience and helps create a positive brand image across all channels. It gives you a better sense of what your audience is interested in, allowing you to engage with them more effectively.
For example, analyzing past purchasing behavior can help you predict the probability of a customer making a certain purchase in the future.
With this information, you can segment your audience into smaller groups with common buying behavior so you can target each group more effectively. For example: those who rely on social media to learn about new products, those who look for peer reviews before buying, those who only buy when special offers or promotions are available, and so on.
Armed with this data, you can identify the biggest obstacles to purchase for each group and create personalized experiences to increase conversion at each stage of the buying journey.
Increase Customer Satisfaction and Retention
Loyal customers are valuable assets. They’re typically cheaper to retain, have higher lifetime value, and can be your brand’s best advocates.
Gathering information about your customers’ buying behaviors can help you identify new ways to convince them to buy repeatedly and spend more money with your brand.
Customer satisfaction builds loyalty. There are several factors that affect customer satisfaction, including product quality, purchasing convenience, and customer service.
Using your knowledge of consumer behavior to create exceptional customer experiences right from the start will help you build customer loyalty for your brand. Anticipating customer needs and taking proactive measures to meet those needs takes the customer experience to a new level.
Identify trends in your customers’ buying behavior, then take steps to reinforce those trends and turn them into habits that benefit both you and your customers.
In addition, consumers aren’t loyal to your brand just because they like the products, convenience, and service, but also because of what your brand stands for. A customer who shares your values will want to be included in your messaging.
Communicate clearly and regularly with customers about your company’s values—the most loyal customers love what you stand for and want to hear about it.
Strengthen Customer Relationships
Maintaining strong customer relationships requires continuous work, finding new ways to engage with them and retain their business.
Having an understanding of consumer behavior can give you insight into the needs and wants of your customer base. It shows you where your products and services can be improved to better serve your customers and enrich your relationships with them.
Loyal customers should receive your best treatment. Use privileges like exclusive rewards programs, surprise gifts, and other incentives to strengthen the relationship and prompt future business. It’s not about the value of the offer—it’s simply about presenting them with something positive and unexpected.
Miller Wittman can help you keep a finger on the pulse of today’s consumer and build robust strategies to reach them. Contact us to learn how we can help you engage customers, multiply your efforts, and grow your sales.