The Importance of Understanding Consumer Behavior in Marketing
Offering a great product or service is a good start to building a business, but it isn’t enough to sustain long-term sales. If you really want to make a splash in the market and set up your business for continuing success, the number one thing you can do is to make your customers feel like you really “get” them. And that starts with understanding consumer behavior.
Consumer purchasing behavior refers to the ways in which individual customers, groups or organizations select and buy goods and services to satisfy their wants and needs. It’s a multi-faceted type of research that incorporates psychology, economics and other areas of interest and answers the following questions:
- What do consumers buy?
- Why do they buy?
- When do they buy?
- How often do they buy?
Fully understanding consumer behavior also requires a bit of research into the types of consumer buying behaviors (i.e., shopping mostly online) that your customers exhibit, as well as the factors influencing consumer behaviors (busy moms with limited time to shop in physical stores).
Why is understanding consumer behavior important?
Understanding consumer behavior, and turning that data into actionable insights, helps you create a relationship of understanding and trust with your consumers, which can ultimately result in an increase in brand loyalty. It shows the consumer that you’ve done your homework, that you understand their wants and needs, and that you have the solutions they’re looking for.
Building that type of rapport with your audience is hugely valuable in securing and retaining a customer base. According to recent reports, 76% of consumers expect companies to understand their needs and expectations, and organizations that lead in customer experience outperform their competitors on the S&P 500 index by 80%. So, not only do consumers expect you to solve their problems, you also have to clearly communicate that you do, or else they’re likely to turn elsewhere.
What is the importance of consumer behavior?
The importance of consumer behavior in marketing is far reaching. First and foremost, the insights you gain from studying and understanding consumer behavior will help you make informed choices about how to plan out your marketing strategy so that you reach your audience most efficiently. You’ll have a better grasp on the types of messaging to include on your website and social media platforms and in your advertising – in other words, the types of content that your audience is most likely to take notice of and respond to. Ultimately, it’s all about creating the right image for the right audience.
But it goes even deeper than that:
- Consumer differentiation. While you may have already established a targeted demographic for your business, expanding your understanding of consumer behaviors can help you identify variations among your individual customers. Each new sub-group of consumers has its own unique characteristics that can then be targeted and marketed to more precisely.
- Predicting marketing trends. Paying close, regular attention to consumer behavior can help you spot trends in their actions as they begin to emerge. The sooner you spot these trends, the more efficiently you can shift your marketing efforts to support them – ensuring you don’t waste precious resources on outdated information and, likewise, keeping you relevant and even ahead of the curve.
- Identifying room for new products. Another thing the data allows you to keep an eye on is an opening for the development of new products or services. If your customers are consistently performing a particular behavior, or expressing needs that your business does not currently address, you may find that there’s room in the market for you to expand your offerings.
For help in better understanding the consumer behaviors of your own target audience, contact Paradigm Marketing & Design today. We’re here to help you show your customers that you’ve got exactly what they need.