Importance of Consumer Behaviour in Marketing
Consumer behaviour research is one of the most essential marketing tasks that businesses and institutions engage in. This is because, rather than benefiting only your marketing department. Knowing the importance of consumer behaviour benefits all sections of a firm.
This data can then be utilised to assist a company in accomplishing the following goals:
- Increase the number of customers you have
- Set the most competitive price for their goods.
- Create an effective marketing message.
- To meet client demand, they need to increase product volumes.
- Sales should be increased.
- Reduce their company’s expenses
- Refine their customer service strategy
When done correctly, a customer behaviour analysis can provide marketers with valuable information:
- What customers think and feel about various companies, products, and services, for example.
- What factors influence customers’ decisions among the different options accessible to them?
- Consumer behaviour during the research and shopping process
- Consumer behaviour is influenced by their environment. This includes their friends and family, the media they consume, and so on.
To gain a better understanding of consumer behaviour, consider the five most essential factors that can impact customers’ purchasing decisions. These are some of them:
- Personal aspects such as age, gender, cultural background, life stage, and more are influenced by a consumer’s demographics. These factors play a significant impact in shaping a person’s personal interests and viewpoints.
- Psychological aspects such as their reaction to a marketing message or stimuli to the senses such as light, heat, sound, touch, and other stimuli.
- Friends, family, and social media influences, as well as aspects such as an individual’s degree or money, are all social factors.
- Successful marketing campaigns can influence impulse purchases, persuade consumers to switch brands, or encourage them to choose more expensive alternatives.
- Purchasing power refers to a person’s financial ability to purchase goods or services, as well as the transaction’s “worth” in terms of what they get. This can influence the brand they choose (for example, the less expensive or more costly brand) and whether or not they can justify making the purchase.
The Marketing Benefits of Studying Consumer Behaviour
So, what do marketers hope to gain by analysing consumer behaviour? Let’s take a closer look at each of these objectives while we understand the importance of consumer behaviour.
#1. Determine which items are required and which are no longer required.
No company wants to spend a lot of money on a product line just to discover that it doesn’t sell. Understanding consumer behaviour can help you figure out whether your product can address a specific need, provide a competitive advantage, or fill a completely new – yet in-demand – market niche.
#2. To determine the price at which a product or service will be sold in order to stay profitable in a competitive market.
Pricing products would be a constant headache for businesses if they didn’t analyse consumer behaviour. After all, you don’t want to underprice your product and earn a low profit margin, but you also don’t want to overprice them and drive customers to your competitor’s more reasonably priced products.
#3. Selecting the most effective distribution channel
When we talk about distribution channels, we’re talking about where and how consumers will be able to purchase items or services. Multiple considerations must be considered when it comes to distribution, including the quantities required, the convenience of online or offline methods, what competitors are currently doing, and more.
#4. For marketing purposes
Different sorts of consumers will react differently to each marketing strategy, so analysing customer behaviour will help you figure out which channels will be the most effective. Is the target customer more inclined to read a magazine or surf Instagram, for example? Marketing initiatives may be costly, and no business wants to waste its advertising money.
#5. To boost revenue
Understanding consumer behaviour allows you to uncover actionable insights that lead to positive results. This is because studying consumers’ activities and decision-making processes gives you a better understanding of how, when, where, why, and for whom they buy particular goods. This is critical for executing the right strategies that will make your products, goods, or services in high demand, resulting in increased sales and money.
#6. For content personalisation
This may surprise you if you believed content personalisation wasn’t a big deal. According to surveys, 41% of clients quit organisations because of poor personalisation in 2019. As technology advances, so does a customer’s desire for highly personalised content that is tailored to them specifically. You may successfully personalise your content to each consumer’s demands and needs using data gathered through consumer behaviour analysis.
#7. Customer Value
You may successfully discover ideal customer qualities when you can predict a client’s whole worth. This has the advantage of allowing you to target these unique personas and gain brand-loyal clients ahead of your competitors.
#8. Content Optimisation
We discussed how tailored material may be, but how can it be optimised for ultimate success? Your consumer behaviour study should also offer you with information to help you improve your marketing initiatives, whether it’s focusing on the most value group of your clients, engaging them in their preferred channel, or delivering material at the most effective time.
#9. Customer Retention
Did you know that a 5% improvement in client retention can result in a 25% increase in profit? Furthermore, retaining existing consumers is 6-7 times less expensive than acquiring new ones. As a result, While attracting loyal clients is crucial, keeping them is even more valuable to organisations. Understanding consumer behaviour allows you to discover “excellent customers” and how they want to be recognised.
