It is important for a business to understand the behaviour of its consumers. Doing so can help forge a stronger and more successful business and also help produce more effective marketing campaigns. Studying consumer behaviour answers various questions such as: ‘what do consumers buy?’, ‘why do they buy?’, ‘for what reason are they buying?’, ‘how often do consumers buy?’ and so on. This piece further explains consumer behaviour and why it is vitally essential for your business and its ensuing success.
What is Consumer Behaviour?
Consumer behaviour has been defined by Engel as those acts of individuals directly associated with purchasing, using and disposing of economic goods and services, including the decision-making processes that precede and determine these actions. In a nutshell, consumer behaviour involves the study of all the activities associated with the purchase, usage and disposal of goods and services. It considers how the consumer’s attitudes, preferences and emotions can affect buying behaviour. Consumer behaviour mixes elements from sociology, psychology, anthropology, marketing, ethnography and economics. This allows you to thoroughly understand your consumer base and why they make the purchasing decisions that they do.
Why is Consumer Behaviour Important?
Comprehending consumer behaviour is vital for a business to find its success for both its current products and any upcoming ones that they may release. This is because a company needs to fully understand the reactions of consumers towards their product; otherwise, they risk product failure. Consumer behaviour is ever-changing and can be hard to understand unless proper research is thoroughly undertaken. This is because behaviours can change depending on an extensive range of factors, such as current fashion, trends, disposable income, living style, technology and more. A marketer needs to understand what factors are changing so that they can fit their marketing efforts into these changes accordingly.
Studying consumer behaviour is crucial because it allows the marketer to see what influences a consumer’s buying decision. Therefore, they can fill gaps in the market and work out what products are needed and, conversely, which are redundant. For example, if a CBD manufacturer had a best-selling CBD vape flavour and were not sure why, consumer behaviour could help elucidate this. Then, when they develop a new flavour, they can emulate the aspects that consumers loved with the first flavour to increase their chances of getting positive feedback with the new flavour.
Key Advantages to Understanding Consumer Behaviour
Here we outline some key reasons why understanding consumer behaviour is not only valuable but necessary for the success of a business:
- Differentiate consumers: Consumer differentiation is a way to distinguish a customer from numerous other customers, helping to create a target group of consumers with similar behaviours. Of course, you will have a targeted demographic of your consumer in your business, but this does not mean to say that there are no variations between individual consumers. When a marketer is aware of various differentiations, it allows them to design separate marketing programmes, effectively servicing a larger group of people.
- Keeping your customers: As we have read, consumer behaviour is important to help attract new customers. However, it is at least equally essential to retain existing customers. This can only be achieved by understanding and paying attention to the buying behaviour of the consumer. Indeed, a product needs to be marketed in a way that will convince a customer to rebuy your product time and time.
- Predicting market trends: Analysing consumer behaviour is the first way to observe a shift in market trends. This is wise as it can save a lot of money and resources that otherwise may have been allocated to a product that will not sell. Therefore, understanding what is trendy can help you produce a more successful product. Predicting market trends can be virtually impossible without analysing the behaviour of your customer.
- Understand your competition: One of the primary reasons to study consumer behaviour is so that you can also find out information regarding your competitors. It can answer questions such as: ‘is the customer buying from your competitor and why?’, ‘what attracts a consumer to the products of your competitor?’, and ‘what gaps are missing in your products that are leading your consumers to your competitor?’. Consumer behaviour analysis allows understanding of your competition and gives insights into how your brand can offer advantages over your competition.
- Stay a contender in the market: Staying relevant to your target market can be challenging, especially when the behaviour of consumers can change so rapidly. However, undertaking consumer behaviour research can keep you apprised of any changes and help you to stay relevant and appealing to clients in the market. If not, you run the risk of becoming stale and irrelevant, leading your consumer to a competitor that has stayed a strong contender and has better understood the market.
- Fantastic customer service: One of the most important reasons for understanding behaviour is so that you can provide the most suitable and convenient customer service for individual needs. It can allow you to work out what advice or help consumers in a demographic are likely to be searching for, allowing you to provide them with relevant and helpful guidance.
When it comes to running an organisation, there is absolutely nothing more important than your customers. Without customers, you have no business. Therefore it is so crucial that you take the time to research and understand the demographic of people attracted to your products so that you can optimise their experience and your success. By analysing consumer behaviour, you are able to accomplish many valuable tasks such as improving your customer service, staying relevant within your market, predicting upcoming market trends, understanding your customers and competition, and retaining your customers for the long term. It is highly valuable to understand consumer behaviour as it gives you a greater understanding of not only your customers but of the market as a whole. Without this understanding, your business will struggle to succeed.