Consumer behavior is an in-depth analysis of why people buy something and why they decline a certain product or service.
Other than that, various aspects like how consumers are spending their time or money are also an inseparable part of a consumer behavior study. Be it a small or big business, consumer behavior is one of the most dominant factors to shape up an effective marketing plan.
Marketers go through the following measures to dig deep into consumer behavior before finalizing a magical marketing mantra for their brand:
As a brand, you would not want to make more products than the potential of the market. Because it can cost you a tremendous amount of money in the end. So in order to avoid and minimize this risk, companies have to go through past consumer behavior to find out the possible future sales.
There are numerous methods used to determine past consumer behaviors. However, most organizations base their research on qualitative or quantitative methods because they are considered to be the most reliable ones. Better forecasting means that the company will not go through surprising results in the end regarding its sales.
Sales forecasting is a complex process and can take many forms. The list of different types of forecasting is given below:
- Pipeline forecasting
- Historical forecasting
- Intuitive forecasting
- Length of sales cycle forecasting
- Opportunity stage forecasting
- Multi-variable forecasting
In the above picture, the graph shows a constant hike in the sales forecast. So the marketing team will formulate a marketing strategy keeping this growth in mind
Supply and demand
It is one of the most fundamental economic concepts. Supply and demand can be divided into two categories. One – when the demand is less and supply is more. Two – when the demand is more and supply is less.
Supply and demand rule has been around forever because it provides valuable insights about customer behavior. That’s why it is taken into consideration and given its due share of attention in marketing strategy. Consumer behavior is hardly influenced by any other factor as much as by the existing situation of supply and demand. Because the price of any commodity is by and large revolves around its supply and demand. Less demand makes the price go down while more demand results in price expansion.
Psychographics of consumers
In simple words, psychographics is a way to discover more about consumers. It is more of an internal than external factor. A brand goes through different studies to understand customers’ attitude, opinion, personality, aspirations, lifestyle and so much more. This information discloses the thinking pattern of people which is of great importance to the marketers. Since marketers have ironed out how customers think, they will create the type of messages which will maintain harmony with their thoughts. Hence, they will be able to communicate with them in a more convenient way.
It is an essential measure to come up with an appealing marketing campaign. In a nutshell, psychographics is a tool that can enhance your promotional productivity at a great deal.
Business is all about competition. You can't do well unless you have in-depth information about what your competitors are doing. So, unlike you, if businesses around you are having a ball, it’s time for competitive analysis. This analysis is all about why consumers are buying their products instead of yours.
As you begin to analyze competitors’ success or even failures, you will automatically come to learn about customer preferences, their likes and dislikes and so much more. Needless to say, the study will give you a broad and comprehensive understanding of consumer behavior which, if adjusted in your marketing strategy, will surely add in the brand’s bottom line.
Like so many other important decisions of our life, social factors have a huge say in our purchasing decisions as well. Socially, a customer can be influenced by diverse factors. For example, his family, circle of social interaction, community, class and so on. Almost everything a person is surrounded with can be counted as a social factor.
As it is explicit from the above explanation that there is a range of social factors so studying all of them is easier said than done. However, brands have to consider them because they play such a pivotal role to spell out customer behavior. A marketing strategy that does not entertain social factors is less likely to succeed because it is deprived of one of the major indicators of customer behavior.
The above graph contains a common list of social factors which corporates usually care to pay heed
Just like the past data, current market trends also help you to judge customer behavior. In fact, many brands have a higher priority for ongoing trends in their marketing plan.
Let’s dive into the different ways you can discover current marketing trends:
- Google Trends: With the help of Google Trends you can find out the hot trends. This is a go-to tool for marketers because it provides them minute details about which trend is becoming more or less popular.
- Social Media: When a brand is focused on marketing to millennials, it takes social media trends into the account. About 2.77 billion people are active on social media and a fairly large proportion among them is based on the millennial population. Twitter Insiders is a widely used and trusted feature to provide you the latest information about consumers.
- Keyword Research: Keywords are nothing less than a guiding light. When you know what keywords are currently holding the top position then you can also get an idea about what is in demand at a given time. Using different tools, you can easily figure the high-ranked keywords related to your niche.
- Customer Reviews: It is the hallmark of a smart marketer to be well-informed about the latest customer reviews. They help you to conclude what has become outdated and what changes customers are expecting from the brands.
- Blog comments: Reading comments on your blogs or the blogs with likewise niche can also disclose current happening trends.
Consumers tend to think very carefully before purchasing some products. They are usually expensive ones like car, laptops, costly mobile phones and suchlike. But there are also products which don’t take much thinking. Consumers buy them on a weekly or even daily basis.
Though purchasing these products or services looks an unconscious process but it's not. Deep down, the process is triggered by particular customer behavior. Brands take pains to understand this behavior and add input in their marketing plan accordingly.
Complex decision making
As we discussed in the above section, complex purchasing involves great care and caution. Customers conduct research, ask for references and take advice before finally deciding to buy. So, unlike routine purchases, there is a long process to be followed here. For example, if one wants to buy something as expensive as a BMW vehicle, he is bound to take his time.
Point being, the industries which make such high-end goods have to study this type of decision-making to gain a better understanding of customer behavior.