What is Customer Behavior and Why is It Important?


Customers are the reason businesses exist, so understanding their behaviors can help build and nurture fruitful relationships. Here’s what you must do.

What is Consumer Behavior?

Consumer behavior concerns the decision processes for choosing, consuming, and disposing of purchased products and availed services. This field of discipline looks into the consumers’ emotional, mental, and behavioral state and responses. 

Many benefits come with studying consumer behavior. By understanding your customers, you can turn customer behavior into sales with insights on how to improve your products or services. 

Importance of Understanding Consumer Behavior

Here are some advantages when you focus on consumer behavior in your day-to-day operations.

Improving customer service 

Knowing your customers’ buying behavior and attitudes helps you understand what pain points need to be addressed in every stage of their buyer’s journey. Since there are multiple touchpoints in customer service, you must provide the most suitable service for their individual needs. For instance, you could make different product recommendations to an avid tech collector versus a first-timer. 

Indeed, customer service outsourcing is an essential aspect of the business. You need to get it right to earn the public’s trust and confidence. Delivering timely customer support is also vital. If you’re low on staffing while under the return to work policy because of the pandemic, you might want to outsource customer service to a third-party provider. This way, you’ll have a dedicated team of reps or agents to assist your customers whenever they need it.

Retaining customers 

Retaining your existing customers is as important as expanding your customer base and attracting new ones. It’s easier for you to sell new products and services to your existing customer base, as you already have their trust and see you as a credible source. 

Understanding consumers’ behaviors enables you to find ways to boost customer loyalty. For one, you probably know how customers love receiving discounts. You could then send targeted promos to your customers to keep them happy and satisfied. Ultimately, loyal customers spread the word about your brand to their friends and family. 

Market Research

Businesses must respond to the constant change in industry trends quickly and effectively through market research. At the same time, market research enables you to discover insights and analyze consumer behavior. 

Through market research, you can identify who your ideal customers are and put them into target groups. You could then address the specific needs of specific customer groups, enabling you to tailor your strategies based on their unique characteristics, interests, or challenges. Doing so can help you respond and adapt to shifting trends and help you stay relevant in your target market. 

Tailor-fitting market strategies 

Alongside market research, your marketing strategies should be anchored on consumer behavior for them to be effective. Nowadays, social media tools are among your top options given how customers are actively engaging on social platforms to discover brands and do business with them. 

Competitor research

Studying consumer behavior has also proved helpful in researching competitors. By analyzing how your target market purchases products or avails services, you can get answers to questions such as what entices customers to buy from a competitor or identifying gaps in your product lineup. 

With the insights you get, you can better position your business within the competitive market. For example, analyzing customer purchase patterns can help you develop marketing strategies to effectively promote your best-selling products or increase awareness of your less popular but equally excellent products. But, more importantly, paying attention to how your customers think can help you innovate products and services to improve their quality of life.

Planning inventory

Studying customer behavior likewise helps you plan what merchandise or products to store for a specific period. For example, you may have products that sell more in the summer than in any other season. You can easily catch off-peak and on-peak seasons and stock up on the relevant inventory using the findings from your customer behavior study. 

Examples of Consumer Behavior

Complex buying behavior 

Here, the consumer is highly involved in the purchase and sees a significant difference among the available brands. A buyer usually conducts thorough research and then develops a set of attitudes towards the product before making a purchase. This ensures that they have chosen the best out of all the offered options. 

This type of purchasing behavior is most often observed for infrequent, risky, and high-value investments like a gadget, house, or car.

Dissonance-reducing buying behavior

Like complex buying behavior, the dissonance-reducing buying behavior entails a consumer’s high involvement. However, the consumer does not see or has difficulty differentiating between brands. 

For instance, a customer purchases a vacuum cleaner based only on factors that they think match their situation. Since they have little knowledge of the differences between brands, they will seek confirmation that they bought the best option. Here, the dissonance occurs because consumers are worried that they may regret the purchase later. 

Habitual buying behavior

This consumer buying behavior occurs when there is low consumer involvement and sees little to no significant difference between available brands. For example, a buyer does their monthly grocery. They don’t necessarily do prior research on a carton of eggs and just go for the ones they usually get. If the usual is unavailable, they will opt for what’s on the shelf.

To put it simply, this purchasing behavior demonstrates more of a habitual pattern rather than brand loyalty. 

Variety seeking behavior 

On the other hand, this consumer behavior occurs when the consumer has low involvement but finds a significant difference among alternative brands. In this scenario, the consumer buys a different product brand not because they were unsatisfied with the previous one but because they want to try out other brands. This shows that a consumer is prone to brand-switching behavior.

Customer-centric Approach to Business 

Understanding your customers’ buying patterns has its benefits. In every business, understanding your customers’ pain points gives you an insight into the whys of your business—why it exists and why the products are the way they are. 

It’s essential to conduct research and surveys of what your customers want and are likely to purchase and avail, helping you identify your target consumers’ behavior. By doing so, you can innovate new products and plan for effective marketing strategies and business operations that can keep your customers happy and satisfied.

This article is about:

Aaron. S Swain

Aaron Swain is a writing specialist. He is passionate about marketing and SEO. He expands and improves his skills throughout the writing process to help and inspire people.

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