Segmentation of customer behavior in marketing
How many times does one make decisions throughout the day?
What should I wear today? What perfume should I put on?
Am I getting to have for lunch?
If you think about it, we make many buying decisions a day without giving them much thought.
These decisions, as insignificant as they could seem, keep marketers up in the dark.
Because decoding the processes behind customers’ decisions means we will use that info to spice up revenue.
What is the meaning of consumer behavior?
Consumer behavior is the study of consumers and therefore the processes they use to settle on,
use (consume), and eliminate products and services, including consumers’ emotional, mental, and behavioral responses.
Consumer behavior incorporates ideas from several sciences including psychology, biology, chemistry, and economics.
In this guide, we’ll take a glance at the various aspects and facets of consumer behavior,
and we’ll discuss the foremost effective sorts of customer segmentation.
Why is consumer behavior important?
Studying consumer behavior is vital because it helps marketers understand what influences consumers’ buying decisions.
By understanding how consumers choose a product,
they will fill the gap within the market and identify
the products that are needed and therefore the obsolete products.
Studying consumer behavior also helps marketers decide the way to present their products in a way that generates a maximum impact on consumers.
Understanding consumer buying behavior is the key secret to reaching and interesting your clients and converting them to get from you.
A consumer behavior analysis should reveal:
What consumers think and the way they feel about various alternatives (brands, products, etc.);
What influences consumers to settle between various options;
Consumers’ behavior while researching and shopping;
How does consumers’ environment (friends, family, media, etc.) influence their behavior?
Consumer behavior is usually influenced by various factors.
Marketers should study consumer purchase patterns and find out buyer trends.
In most cases, brands influence consumer behavior only with the items they will control;
believe how IKEA seems to compel you to spend quite what you intended to each time you walk into the shop.
So what are the factors that influence consumers to mention yes?
There are three categories of things that influence consumer behavior:
Personal factors: an individual’s interests and opinions are often influenced by demographics (age, gender, culture, etc.).
Psychological factors: an individual’s response to a marketing message will depend upon their perceptions and attitudes.
Social factors:
family, friends, education level, social media, income, all influence consumers’ behavior.
Types of consumer behavior
There are four main sorts of consumer behavior:
- Complex buying behavior
This type of behavior is encountered when consumers are buying an upscale,
infrequently bought product. they’re highly involved in the purchase process and consumers’ research before committing to a high-value investment.
Imagine buying a house or a car; these are examples of posh buying behavior.
- Dissonance-reducing buying behavior
The consumer is very involved in the purchase process but has difficulties determining the differences between brands.
‘Dissonance’ can occur when the buyer worries that they’re going to regret their choice.
Imagine you’re buying a lawnmower. you’ll choose one supported price and convenience, but after the acquisition, you’ll seek confirmation that you’ve made the proper choice.
- Habitual buying behavior
Habitual purchases are characterized by the very fact that the buyer has little or no involvement within the product or brand category.
Imagine grocery shopping: you attend the shop and buy your preferred sort of bread.
you’re exhibiting a habitual pattern, not strong brand loyalty.
- Variety seeking behavior
In this situation, a consumer purchases a special product not because they weren’t satisfied with the previous one,
but because they seek variety.
Like once you try out new shower gel scents.
Knowing what sorts of customers your e-store attracts will offer you a far better idea about the way to segment customer types.
What affects consumer behavior?
Many things can affect consumer behavior, but the foremost frequent factors influencing consumer behavior are:
- Marketing campaigns
Marketing campaigns influence purchasing decisions tons.
If done right and frequently, with the proper marketing message,
they will even persuade consumers to vary brands or choose costlier alternatives.
Marketing campaigns, like Facebook ads for E-Commerce, can even be used as reminders for products/services that require to be bought regularly but aren’t necessarily on customers’ top of mind (like an insurance for instance ).
an honest marketing message can influence impulse purchases.
- Economic conditions
For expensive products especially (like houses or cars), economic conditions play an enormous part.
A positive economic environment is understood to form consumers
more confident and willing to enjoy purchases regardless of their financial liabilities.
The consumer’s decision-making process is longer for expensive purchases
and it is often influenced by more personal factors at an equivalent time.
- Personal preferences
Consumer behavior also can influenced by personal factors: likes, dislikes, priorities, morals, and values
In industries like fashion or food, personal opinions are especially powerful.
Of course, advertisements can influence behavior but, at the top of the day, consumers’ choices are greatly influenced by their preferences.
If you’re vegan, it doesn’t matter what percentage of burger joint ads you see,
you’re not gonna start eating meat due to that.
- Group influence
Peer pressure also influences consumer behavior. What our relations, classmates, immediate relatives, neighbors, and acquaintances think or do can play a big role in our decisions.
Social psychology impacts consumer behavior. Choosing nutriment over home-cooked meals,
for example, is simply one of such situations.
Education levels and social factors can have an impression.
- Purchasing power
Last but not least, our purchasing power plays a big role in influencing our behavior.
Unless you’re a billionaire,
you’ll consider your budget before making a sale decision.
The product could be excellent, and the marketing might be on point,
but if you don’t have the cash for it, you won’t pip out.
Segmenting consumers to support their buying capacity will help marketers determine eligible consumers and achieve better results.
Customer behavior patterns
Buying behavior patterns aren’t synonymous with buying habits.
Habits developed as tendencies toward action and that they become spontaneous over time,
while patterns show a predictable mental design.
Each customer has his unique buying habits,
while buying behavior patterns are collective and offer marketers a singular characterization.
Customer behavior patterns often grouped into:
- Place of purchase
Most of the time, customers will divide their purchases between several stores albeit all items are available within the same store.
consider your favorite hypermarket:
Although you’ll find clothes and shoes there also, you’re probably buying those from actual clothing brands.
When a customer has the potential and therefore the access to get equivalent products in several stores,
they’re not permanently loyal to any store, unless that’s the sole store they need access to.
Studying customer behavior in terms of choice of place will help marketers identify key store locations.
- Items purchased
Analyzing a handcart can give marketers many consumer insights about the things
that purchased and the way much of every item purchased.
Necessity items often bought in bulk while luxury items are more likely to purchased less frequently and in small quantities.
The amount of every item purchased is influenced by the perishability of the item,
the purchasing power of the customer, unit of sale, price, number of consumers for whom the item is meant, etc.
- Time and frequency of purchase
Customers will shop consistent with their feasibility and can expect service even during the oddest hours;
especially now within the era of e-commerce where everything is merely a couple of clicks away.
It’s the shop’s responsibility to satisfy these demands by identifying a sale pattern and matching its service consistent with the time and frequency of purchases.
One thing to keep in mind: differences due to the season and regional differences must even accounted for.
- Method of purchase
A customer can either walk into a store and buy an item right then and there or order online and pay online via MasterCard or on delivery.
The method of purchase also can induce more spending from the customer
(for online shopping, you could possibly even charged a shipping fee for example).
The way a customer chooses to get an item also says tons about the sort of customer he’s.
Gathering information about their behavior patterns
helps you identify new ways to form customers to buy again, more often, and with better values.
Think about all the info you’ve already collected about your customers.
the acquisition patterns are hiding in your e-store’s analytics and you’ll either search for insights manually or integrate a tool
with your eCommerce platforms like Shopify or WooCommerce to urge automated insights about behavior patterns.
Customer behavior segmentation
Customer segmentation and identifying sorts of buyers have always been important.
Now that personalization and customer experience are factors that determine a business’s success,
effective segmentation is even more important.
Only 33% of the businesses that use customer segmentation say
they find it significantly impactful,
so it’s important to seek out the segmentation technique that brings clarity and suits your business.
Traditionally, most marketers use 3 primary sorts of behavioral segmentation.
- Benefits sought
A customer who buys toothpaste can search for four different reasons: whitening, sensitive teeth, flavor, or price.
When customers research a product or service, their behavior
can reveal valuable insights into which benefits, features, values, use cases,
or problems are the foremost motivating factors influencing their purchase decision.
When a customer places a higher value on one or more benefits over the others,
these primary benefits sought are the defining motivating factors driving the acquisition decision for that customer.
- Occasion or timing-based
Occasion and timing-based behavioral segments ask about both universal and private occasions.
Universal occasions apply to the bulk of consumers or audiences .
for instance, holidays and seasonal events when consumers are more likely to form certain purchases.
Recurring-personal occasions are purchasing patterns for a private customer that consistently repeat over a short time.
For instance birthdays, anniversaries or vacations, monthly purchases,
or maybe daily rituals like stopping for a cup of coffee on the way to work every morning.
Rare-personal occasions also associated with individual customers,
but are more irregular and spontaneous, and thus harder to predict. For instance, attending a friend’s wedding.
- Usage rate
Product or service usage is another common thanks to segment customers by behavior,
supported by the frequency at which a customer purchases from or interacts with a product or service.
Usage behavior is often a robust predictive indicator of loyalty or churn and, therefore, lifetime value.
Conclusion
Before making decisions,
support gut feelings regarding your customers and your audience,
observe their behavior,
hear them and build a relationship that will make them stay loyal regardless of how aggressive your competitors are.
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