Understanding customer behavior for startups: 

Customer behavior:

It refers to individual purchasing behavior, including social trends, frequency patterns, and background factors that influence purchasing decisions. Companies study customer behavior to understand their target audience and offer more attractive products and services.

Customer behavior is not about who is shopping at your store, but how they are shopping at your store. Examine factors such as purchase frequency, product preferences, and how marketing, sales, and service offerings are perceived. Understanding these details can help businesses communicate with their customers in a productive and enjoyable way.

 

Consumer behavior affecting services

A great example of how consumer behavior impacts customer service is how different audiences like the services of the companies they buy from. The Consumer Trends Report 2022 on the HubSpot blog surveyed 1,000 consumers about their preferences and the actions they take based on them.

Gen Z reported preferring customer service over the phone, millennials preferred email, and Gen X preferred the phone. Different generations have different tastes, so customer service channels need to be tailored to accommodate each audience’s behavior. For example, if you talk primarily to Gen X, have more staff available to answer phone calls for troubleshooting than staff monitoring social media and checking DMs.

 

Why Should You Conduct Customer Behavior Analysis? 

• Content Personalization: Analyzing customer behavior is important as customers expect more personalized content than ever before. In fact, a Salesforce survey of more than 6,000 consumers found that 66% of consumers expect companies to understand their needs and expectations, while a Redpoint Global survey found that 82% of respondents expect companies to respect their preferences and meet their expectations. say they are most likely to only buy from brands that understand themselves and their needs. This means you must ensure that your customers’ needs and desires are met and contribute to their loyalty and retention. 

• Customer Value: Another key business requirement is the ability to predict overall customer value. Customer behavior analysis helps to improve this process through the identification of ideal customer characteristics. By targeting these personas, you can win loyal customers before your competitors. 

• Content Optimization: Data from customer behavior analysis can be used to optimize marketing campaigns. Not only can you focus on your most valuable customer segments, but you can also target them through their preferred channels. This analysis also helps deliver content at the most effective time to make an impact. It also gives you insight into where each person’s failure occurs. This helps increase upsell and cross-sell opportunities.

• Customer Retention: Getting loyal customers is important, but keeping them is just as important. Accenture reports that 49% of customers expect special recognition if they are “best customers.” Even if they like your company, they may look for another company if you have no way of giving them credit. Behavioral analytics can help teams reduce this churn by identifying good and bad customer traits.

Factors that influence customer behavior:

• Personality Traits: A customer’s behavior in a store is greatly influenced by their personality, background, and upbringing. Some people are cheerful and outgoing, some are calm and composed, and some are somewhere in between. Understanding where your audience falls into this category is critical to understanding customer behavior.

• Psychological Reaction: Psychological reactions can be difficult to predict, but people’s reactions to situations play an important role in customer behavior because they are based on perceptions and attitudes that can change on a daily basis.

Suppose you’re promoted, you’re having a celebratory dinner, and the waiter accidentally spills a glass of water on your shirt. In this case, you might be more generous because you’re feeling good and having a good day. However, if you have just been laid off from your job, you may be more frustrated with the situation.

Customers are patient and happy one day, but the next day they are pestering sales reps with pressing issues. Understanding that a customer’s emotional response is not an indication of who that person is can help your team defuse stressful situations and prevent potential customer churn.

• Social Trend: Social trends are the external influencers your customers listen to, peer recommendations, social norms, trends, etc. Some of these impacts are temporary, while others have a permanent impact on our customers.

• Finance Condition: People in an economic crisis do not want to choose expensive products such as houses and cars. And that financial situation can change for anyone at any time. Therefore, consumers who are currently financially able to pay are less concerned about the state of their pockets and may be more confident or willing to make a purchase.

On the other hand, economically distressed customers are always reluctant to buy things and always look for cheaper alternatives for the same products they need. may be affected by factors such as your personal financial situation.

• Influence of others: Sometimes other people close to or known to the consumer can also influence the consumer’s buying behavior. Buying something from a family member, relative, friend, classmate, neighbor, or someone you admire plays a big role in your purchasing decision.

This can have a big impact on your purchasing decision. Preferring junk food to healthy homemade meals is just another example of such a situation. Education level and social actors also influence this.

• Company policies and marketing campaigns: Certain corporate policies or marketing campaigns often influence consumer purchasing decisions. For example, when a business changes its return policy from “no returns” to “15-day money-back guarantee,” customers often find those shops more trustworthy than others. Additionally, by running the right marketing campaigns with the right messaging, you can persuade your customers to buy expensive alternatives or rebrand. Ultimately, therefore, these two tactics have an impact on increasing sales in the long run. Basically, marketing campaigns are also used as reminders of products and services that consumers are interested in or looking for. A good marketing campaign can therefore provoke impulse purchases.

• Personal Choices or Desires: Personal preferences also play an important role in influencing consumer behavior. After all, most of these days, it’s always their choices, likes, dislikes, morals, priorities, and values ​​that matter most. Especially in the food and fashion industries, this personal preference works better than in any other industry. Indeed, some profitable product advertising can influence the decisions of today’s customers. But at the end of the day, most of the time we go for what we’ve always liked. If you love wearing jeans all the time, no matter how many ads you see with other nice clothes, you will always try to buy nice jeans instead. So it’s not just about changing habits. 

• Purchasing Power: Last on this list of things that influence customer behavior is the ability or power of the consumer to buy whatever they want. Some people buy expensive things not because they need to, but because they can. If you were a millionaire, you wouldn’t think much about your budget.

But if a customer goes bankrupt, marketing no matter how good his campaigns and products are, he can’t sell to them. Segmenting customers based on their ability to buy things can go a long way in helping marketers find the right consumers to get better results and achieve more sales.

Customer Behavior patterns:

Customer buying behavior is very different from consumer buying behavior. Each has its own buying habits that pass naturally and develop primarily as propensities for certain behaviors. Buying behavior, on the other hand, follows common, predictable mental images. Therefore, purchasing behavior patterns provide marketers with different characteristics and can be grouped as follows:

• Where to buy: Often, most customers buy different items from different places even if they have the same item in one place. Take the supermarket as an example, you can get everything from clothes to shoes in the same store, but you will be buying specific clothing items and footwear directly from the brand store. If a customer sees an opportunity to purchase the same item at another store, they are not truly loyal to that store unless that store is the only location nearby. Researching and analyzing customer choices at various shopping locations helps her marketing agents find those stores.

• Type of product purchased: There are certain things you should consider regarding the items you purchase and the quantities you purchase. Consumers are more likely to buy daily necessities in bulk, while luxury goods are more likely to be purchased in small batches. In most cases, the quantity of goods purchased depends on such factors as the quality of the goods, the consumer’s ability to purchase, the price of each unit, and the number of customers these goods are intended for. Analyzing such customer shopping cart information provides a variety of valuable insights to marketers.

• Purchase frequency and duration: Most customers shop at appropriate times, such as long weekends or before the start of major holidays. However, even if you shop at the most unusual times and hours, you would expect similar service from the store owner. And now, especially in e-commerce stores and online marketplaces, the store needs to take responsibility and do whatever it takes to satisfy its customers. They want to maintain purchase frequency by meeting all expectations and requirements, so they understand buying timeframes and behaviors. Therefore, regional differences and seasonal variations should also be analyzed as part of customer behavior.

• How to buy: Just walk into the store, pay cash or swipe your debit/credit card to instantly buy what you want. In addition, online payments via credit/debit or cash on delivery services have become popular payment methods in ubiquitous e-commerce shops. In addition, some types of purchases can increase a customer’s spending limit, or even charge a few extra dollars for shipping when shopping online. But the truth is, it says a lot about customer behavior and the types of shoppers based on the methods they choose to purchase products. You can also get useful insights.