Beginner's Guide To Consumer Behavior Analysis
Customer behavior analysis is possibly one of the most difficult jobs there are! Customer behavior is arguably the biggest nut to crack when you're looking at scaling up your marketing, revenues, engagement, retention- whatever your immediate and primary objective may be. However, nothing beats the thrill and future growth that arises from learning deeply about your consumers. What they like, dislike, perceive, or what is invaluable knowledge for any business.
The customer behavior definition states that any individual's purchasing habits, including frequency of buying, trends, background influences including purchase decision influences, and so on. Brands and businesses examine the behavioral patterns of their consumers to understand their target demographics and tailor their products/services accordingly.
While you can certainly take recourse to customer behavior analysis, machine learning and other tools/platforms, it is vital to understand more about the whole concept first. Here are some key pointers worth noting:
- Consumer behavior analysis does not cover who is buying products at your business. It deals with the how of things, i.e. which products consumers prefer, how they look at your sales, branding, marketing and customer service initiatives and the frequency of their purchases/shopping activities.
- Understanding these behavioral patterns helps you engage with customers more effectively while tailoring your offerings to match their expectations and needs.
- Consumer behavior has three predominant influences, namely psychological, personal and social.
- A customer's personality greatly impacts behavioral patterns during purchases. Their background, environment and circumstances make a big difference, i.e. some will be happy and non-fussy customers, some will be demanding, some could be slightly grumpy, some could be quiet and so on.
- Psychological responses are another determinant of consumer behavior. However, they are tough to forecast and may vary across different situations. For instance, suppose someone got a raise and splurged on a celebratory trip to the apparel store. Here, when an employee accidentally bumps into the customer, he or she, being in a great mood, is more likely to ignore the incident altogether. If he or she was in a bad mood due to any setback or other reasons, then the incident may have frustrated or angered him or her greatly!
- Social patterns and trends also influence consumer purchase behavior including social traditions, norms, cultural and social fads, recommendations by others and so on. These are sometimes temporary while other trends permanently impact customers.
Learning more about customer behavior analysis
- Analyzing customer behavior means quantitatively and qualitatively assessing their interactions with a brand or business.
- Customers are grouped into various personas based on some common attributes. Every group is then carefully analyzed throughout all stages in the buying or consumer journey.
- This analysis offers invaluable glimpses into multiple variables which impact audiences including the decision-drivers, methods, priorities and intentions of consumers.
Why is customer behavior analysis needed?
Consumer behavior analysis is required for the following reasons:
- It helps you personalize your products/services and also your promotional, branding and marketing content for consumers.
- You can start predicting the overall value or lifetime value of a consumer. An analytical study helps you find out and attract more customers who are loyal to the brand before your competition loops them into their mix.
- Data garnered from analysis will help you optimize and streamline marketing initiatives while focusing more on the most-valuable customer groups.
- You can also retain more consumers once you adopt a personalized approach that recognizes them. An Accenture report stated how 49% of customers anticipate some special recognition when they maintain their tags of being good customers. Do the math and you'll know what to do!
Tips on implementing customer behavior analysis
- Segment the target audience via demographics like age, gender, location and engagement habits such as chosen media or other channels, shopping habits and web-based activity. Identify several characteristics of those customers who are most valuable for your brand. This can be done via RFM analysis which outlines buying frequency or calculations of customer lifetime values.
- Zero in on the major benefits or reasons for choosing the brand for every customer group that you have created earlier. Once you get data and insights on why each group buys from you, you will know how to enhance your offerings and customer experience accordingly.
- You can start getting more quantitative customer data including both external and internal sources. You can get subscription information, insights from social media, reports on usage of products and also consumer reviews, analytics of competitors and so on.
- Compare qualitative and quantitative information, venturing through the entire consumer journey and using your data as the reference point. Which consumer persona opted for which type of product/service? When did he or she purchase this and at which location? Did he or she come back? Comparing these data sets will help you understand your consumers better.
Once you are through with this process, deploy your understanding through your latest campaign, using data and findings for content delivery optimization. Personalize consumer experiences by choosing the best delivery channel for every type of persona. Analyze results carefully before further optimizing and tweaking your campaigns likewise.