Outsource HQ

Understanding Customer Behavior and Your Business

Episode Summary

From impulse buying to brand loyalty, we explore the intricate motivations behind consumer choices. By understanding the psychological and social factors that influence purchasing decisions, businesses can tailor their strategies to meet customer needs effectively. Join us as we unravel the secrets of consumer behavior and unlock the keys to business success.

Episode Transcription

Hey there! It’s Adam from Outsource HQ! Today, we have an exciting episode about understanding customer behavior. 

But before we dive in, why do you think customers buy? Sometimes they do have the intent to purchase even before they look things up, and sometimes it’s an impulse decision. Either way, what makes them tap that button? Understanding these motivations and the secrets behind customer behavior give you insights for making the right offers, providing the right content, at the right moment. 

So what are the common motivations of customer behaviors?

Family status, brand perceptions, and the desire for prestigious items all influence purchasing decisions. Age and gender also play a big role in how and why people shop.

First, let’s touch on the factors shaping customer behavior. 

These are psychographic elements that combine psychological and demographic factors. 

Psychological factors are emotions, perceptions, and attitudes— they all play a huge role in what people choose to buy. For example, moms and businesswomen both technically belong in the same demographic, that is women ages 30-50. But once you think of the psychological factors, mothers have very different motivations and emotional triggers. 

This is why words and images from your social media captions, blogs, emails and videos play a big role in evoking emotions and attitudes from your target market. 

Then there’s the personal demographics. This is customers’ gender, culture, and how they see your product solving a problem. It all shapes what they buy. This is where you match products to their personal needs and preferences. You’ve seen pastel colors for teens and young adults, and specific slogans that may apply to residents of specific cities or states. And young men in their twenties would have different shopping habits, preferences, and capabilities from older men in their forties. 

Let’s take gender as an example. In many households, women are the ones deciding on what to purchase. When marketing to men or women, consider what they value most. Men often focus on features, while women look at the big picture. But, some are broadening their advertising to appeal to everyone, especially younger generations. 

In China and Japan, it’s all about family and group benefits when making purchases. But in the U.S., it’s a different story. It’s all about individual preferences driving buying decisions. 

Know your customers’ habits and interests. It’s about matching your product with the people who’ll love it most. 

Next, we have Social factors. Income, where a customer lives, and their family and social circle— these all play a role in what they choose to buy and how you should market your product or service. 

Let’s talk about the pressure to keep up with the crowd. Customers often buy stuff to fit in with their friends and peers: schoolmates, colleagues, neighbors, you name it. 

Customer income dictates whether they’re buying out of necessity or desire. Tight budget? They’re probably focusing on needs. Higher income? They might splurge on their wants too. 

Homeowners are all about those refrigerators and dishwashers. Suburbs? You might find a swimming pool. Downtown? Not so much. It’s about targeting the right audience to make your advertising effective. 

Last but not least, let’s talk about the ultimate influencers in the buying game: kids. When it comes to toys, games, clothes, dining out, events, and outings, kids decide, or your customers think of what the kids would think. 

These psychographic factors all influence customer buying behavior, and on the flipside also help you tailor your products and services to appeal to each demographic. 

Understanding customer behavior patterns can help you know how your customers use products and services. It’s all about fine-tuning your techniques to meet their needs like a pro. 

Now with all those purchase motivations, what’s behind impulse buying? Imagine you’re strolling through the mall, and suddenly, you spot that perfect pair of red shoes you didn’t even know you needed. You didn’t plan to buy them, but you can’t resist the urge, and it’s limited edition! And it’s on sale. Who knows if you’ll see them available again. So you buy them.

Or it can be a chocolate bar you and everyone likes. It’s not expensive. And it’s right there at the cashier counter, so you add it to your cart.   

It’s those spontaneous purchases we usually make without much thought or rather with more emotional influence than logical. Emotions like excitement or boredom kicks in, and we just buy almost on autopilot. 

But what triggers this behavior? Well, it could be a catchy advertisement, tempting display in a store window, or even the influence of peers buying it, so you buy it too.  

And let’s not ignore the thrill of immediate satisfaction. We all love that rush when buying something, even if we later realize we didn’t really need it.

In digital, our equivalent of eye-catching window displays and strategic product placement at the store is ramping up limited-time promotions, emotionally-charged ads on social media, and perfectly-timed releases of both. For example, you post promotions about your upcoming sale late at night, from 10 pm to midnight, when you know people are scrolling before sleep. And you offer a sneak peek at specific items so you know who to target with which items during and after the actual sale. 

And surprise, surprise, they actually see an advance pre-sale discount on their item which is better than the actual sale price. So they buy.  

These tap into people’s impulsive tendencies and lure them into making those spontaneous purchases. So, the next time you find yourself reaching for something you hadn’t planned on buying, remember— it’s not just about the product; it’s about the psychology behind it. 

On the opposite side of impulse buying, there’s brand loyalty. No matter the cost, they stick with their fave brand because they trust it to deliver the goods every time. And they aren’t swayed by flashy discounts or sales pitches from other brands. They’re willing to pay a little extra for their chosen brand. For them, it’s peace of mind knowing they have the best product. 

Brand-loyal customers may not make as many purchases overall, but when they do, they tend to splurge a little more. That’s because they’re not just buying a product - they’re investing in an experience and in prestige, usually. 

So, how can you build this kind of unwavering loyalty? It’s about building a reputation for excellence. Think of how Steve Jobs built up iPhones. He treated every buyer as a VIP, with press conferences before release days, and every store having the same VIP treatment for customers. It’s more than having top-notch products or services, it’s also about presentation. Especially in this age when everyone’s sharing everything on social media.

Next, there’s necessity-driven buying. Imagine one morning, you wake up and realize you’re almost out of toothpaste. You don’t think twice— it’s immediately on your list to buy toothpaste.  That’s necessity-driven buying. It’s about fulfilling those basic needs and solving everyday problems. Also, you don’t really buy these items unless you’re running out or there’s an irresistible price cut. 

Even if you don’t sell something as universal as toothpaste, you can tap into necessity-driven buying. Highlight the real-world benefits and usefulness of your product or service. And give them an irresistible deal. Customers are drawn to products that make their lives a little bit easier and give them the sense of scoring a little win, price-wise. 

Another motivator is exclusivity. It feels like owning or experiencing something truly one-of-a-kind, like getting a limited-edition item or scoring VIP treatment. You can capitalize on this with offering premium products, exclusive memberships, or invite-only events that make customers feel like part of an elite club. Your business not only boost your brand’s prestige but also foster a sense of belonging among your most loyal customers with tapping into this desire for exclusivity. 

Now that you have all these information about purchase motivations, what’s next? Do you know which of these in particular apply to your target audiences? 

That’s exactly what customer behavior analysis does for businesses— it helps you understand how your customers think, what they like, and why they make specific choices. 

First off, customer behavior analysis matters for businesses of all sizes. 

From stocking shelves to setting prices, your business uses insights from customer behavior for smart decisions. It helps you steer clear of wasted resources. 

You can laser-focus your marketing efforts by digging into customer behavior. It makes an impact each time you send out a message. You have ready data when you oursource your marketing to specialists, whether for peak season or as a regular campaign. 

With customer behavior analysis, you can also create experiences that make customers feel like they were made just for them. It feels like having their own personal shopper— making every interaction extra special.

By looking into customer feedback and behavior data, your business can create products that customers can’t get enough of and have the perfect presentation to your customers as well, from promotion to after-sales customer service. 

When you integrate customer behavior into the way you do business, every goal is simpler and clearer. 

You have data-backed guidelines for your personalized messaging, where to advertise, the keywords to use, all the way to lead nurturing and customer service for existing and repeat customers.   

You can harness the power of customer behavior analysis to drive success with personalized messaging, multi-channel marketing, and customer relationship management. 

Thanks for tuning in to today’s episode. In the next episode, we’ll talk about where to advertise!