No business can function without an effective marketing strategy. Having a great product or service is an important first step in building a business, but if no one knows the product exists, a company will never be very successful. Marketing is the engine behind business growth and sustainability.
To create a viable marketing strategy, marketers need to have an in-depth understanding of the company’s ideal customers. It isn’t enough to know their income or age range — getting good results from marketing campaigns depends on understanding consumer behavior.
What is Consumer Behavior?
What goes through your mind when you decide to make a purchase? It depends on who you are, what kind of product you’re buying, and why you’re making the purchase. Your behavior will vary based on the situation, of course. It’s very different to research and buy a car than it is to pick up a pack of toilet paper or a new shirt. And the way a person makes those decisions will depend a lot on who they are.
Consumer behavior aims to understand those buying behaviors and the differences between them. Essentially, it’s the study of how people behave when they buy, and why. Understanding consumer behavior will add another layer to your knowledge of your ideal customers, which will improve your ability to market your organization’s products and services.
There are many different factors that go into a person’s buying behavior. Consumer behavior data can reveal some of the nuances in purchasing decisions and help provide an effective angle for marketers to work, depending on the situation.
Sources of Data for Marketing
Data has always been used in effective marketing practices. Before the days of digital marketing, techniques like surveys and focus groups were the best options for getting real customer feedback and insights.
However, we have more tools than ever before for collecting data that can be used in studying consumer behavior. Different data mining techniques can be used to extract insights for strategic planning. With modern AI tools, large datasets can be processed very quickly, allowing businesses to reduce guesswork in decision-making.
Businesses can collect and leverage their own data (which has become a must for businesses of any size!) to understand how their own customers behave. They can also use commercially-available 3rd party data that comes from researchers, other organizations, and additional sources to gain insights into consumer behavior.
First-party data (collected by an organization directly) will always be the most precise type of data. This is because it comes straight from actual customers, rather than people who simply have similar characteristics to a company’s ideal customer. However, if you don’t have enough first-party behavioral data to draw on yet, other sources can be helpful for shaping your marketing strategy.
How Marketers Can Use Consumer Behavior Insights
Generally, marketers use consumer behavior insights to guide their marketing strategies. If you find out that your customer base spends a lot of time on Instagram or Reddit, for instance, you can use that behavioral information to invest in ads for those platforms and create more content for them.
There are lots of actionable insights you can pull from customer analytics. If you find that most of your customers buy your products in the late afternoon, for example, it makes sense to try running more ads during those hours. If you see that people tend to visit several pages of your website before clicking away or buying, then they might have questions about your products that you need to answer through content like videos and blog posts.
In addition to guiding marketing efforts, businesses can use consumer behavior data to better understand customer needs and wants that aren’t currently being fulfilled. This helps companies create new products, change their customer service strategies, and improve customer loyalty. Loyal customers help expand word-of-mouth marketing for organizations, leading to increased sales.
Marketing is All About Psychology
Marketing involves many different platforms, mediums, and activities. But at the end of the day, it’s all about psychology. People are usually very emotional when they buy, and if you can tap into that emotion to sell your product, you’re likely to be very successful.
In addition to being excellent communicators, marketers have to understand how people think and behave. They need to know about basic human psychology. Today, they also need to know how to interpret data to understand consumer behavior and use technology to create effective marketing campaigns.
Modern marketing blends art and science. But it’s important to never forget that humans buy products — and the decisions they make can often be predicted by their behavior.