How do your customers view the world? What kinds of things grab their attention? What factors influence their day-to-day decisions?
Answering these questions will allow your ecommerce brand to market more effectively, improving customer acquisition and retention. It can also influence other elements of your business, including product design, inventory management, and even your returns policy.
In short, understanding customer behavior matters—a lot.
If you feel like you’re in the dark when it comes to buyer behavior, don’t worry. In this article, you’ll learn what customer behavior is, why it’s important, and how you can use it to your advantage.
What Is Customer Behavior?
Customer behavior, or consumer behavior, describes how people make decisions when choosing, purchasing, using, and disposing of a product. Understanding customer behavior involves being aware of how buyers think, feel, and act, as well as what outside factors influence them. It’s all about getting to the root of why shoppers choose one brand or product over another.
Understanding customer behavior will provide major benefits to your business, allowing you to reach your target market, demonstrate the value your products provide, increase sales, and build a base of loyal customers.
Key Factors That Influence Customer Behavior
People’s day-to-day decisions, including decisions about what to buy, are influenced by many internal and external factors. Let’s explore some of them.
- Psychological. Psychological factors include an individual’s beliefs, attitudes, and perceptions—in other words, their state of mind.
- Social. Social factors encompass the influence of family, friends, and social media. The social element is one of the most important factors shaping customer behavior; for example, one study found that for Gen Z shoppers, friends and family members were the biggest influences on their purchase decisions.
- Cultural. Cultural factors are the values, beliefs, customs, and traditions shared by a group. These shared perspectives often dictate what is desirable, acceptable, or essential.
- Personal. Personal factors are unique characteristics like age, gender, lifestyle, and personal tastes. They also include deeper beliefs like morals and values.
- Situational. Situational factors are temporary and involve the immediate context or setting of a purchase. For example, time constraints, the customer’s physical environment, and the season are all examples of situational factors.
- Economic. Economic factors reflect the customer’s financial situation. This includes income level and broader economic conditions, both of which affect spending power and product choices.
Why Is It Important To Understand Customer Behavior?
Understanding customer buying behavior allows you to tailor your marketing strategy, product design, and pricing to resonate with your target audience.
- Marketing. A solid understanding of customer behavior will help you predict how your audience will react to your marketing messages, campaigns, and content. You’ll be able to understand needs and wants, segment customers by behavior, and create more targeted messaging. You’ll also have more success in developing a brand image that resonates with your ideal buyers.
- Product design and inventory management. To stand out from the crowd, you need top-notch products. By monitoring customer behavior, you can get a better idea of the products they prefer. Then, you can improve your product selection by stocking up on best sellers and adding new products to your catalog.
- Pricing. Studies have shown that small variations in pricing can have major impacts on buying behavior. Understanding how your customers behave can help you tweak your pricing strategy to be more effective.
Of course, the big-picture impact of customer behavior extends beyond operational changes. Ultimately, businesses that understand customer behavior and use it to their advantage gain an edge over the competition, engage potential buyers, and retain more loyal customers.
Interested in learning more about what motivates customers?
Check out this article: The Psychology of a Guarantee When Shopping Online..
The 4 Main Types of Customer Behavior
The four main types of customer behavior are complex, dissonance-reducing, habitual, and variety-seeking.
Complex
Complex buying behavior occurs when consumers are actively involved in the purchase experience and perceive significant differences among brands. This often happens with expensive, infrequent purchases.
For example, a customer planning to buy a high-end DSLR camera might spend weeks comparing different models and brands, reading reviews, and watching videos to understand features and compare costs before making a final purchase. This allows them to make an informed choice to avoid future regrets.
Keep in mind that cost isn’t usually the main concern in a complex buying behavior situation. Instead, the customer is primarily concerned with the value the product offers.
If you sell an expensive product that might trigger complex buying behavior, consider doing the following:
- Deeply understand your products (and your competitors’ alternatives).
- Create messaging that influences underlying beliefs and attitudes.
- Respond quickly and helpfully when shoppers get in touch with questions.
- Provide lots of information about your product, including detailed descriptions, images, and videos, so consumers can conduct research.
- Offer a shipping insurance option so buyers know their expensive product is protected. Adding Norton Shopping Guarantee to your site is an easy way to do this!
Dissonance-Reducing
Dissonance-reducing buying behavior is seen when consumers are highly involved in a purchase but see only minimal differences between brands. It often applies to moderately expensive or important purchases where the customer feels confused. Unlike complex buying behavior, dissonance-reducing behavior doesn’t necessarily involve much research. However, after purchasing, the customer may experience buyer’s remorse and seek reassurance from others.
Try the following tactics to reassure customers who may be experiencing dissonance:
- Provide a great post-purchase experience to help the customers feel good about their decision. This could include fast shipping, a unique unboxing experience, and personalized email communications.
- Establish a generous returns policy so that hesitant buyers feel confident enough to make a purchase.
Habitual
Habitual buying behavior is when consumers aren’t actively involved in a purchase and see little difference between brands. This behavior is common for routine, everyday products, where customers make purchases based on habit rather than brand loyalty or detailed research.
Habitual buying behavior is driven by comfort, convenience, and familiarity.
For instance, a customer might order their usual brand of household paper towels online, barely glancing at alternatives since they’re already familiar with the quality and price of the brand they typically buy.
Attracting customers can be tricky if they’re in the habit of purchasing from another brand. To convince them to switch things up, try the following strategies:
- Craft a strong brand image. Use attention-grabbing, memorable visuals and messages.
- Use sales and promotions to attract otherwise indifferent customers, or experiment with other types of offers, such as a try-before-you-buy deal.
- Have a solid returns policy in place so consumers feel comfortable trying something new.
Variety-Seeking
Variety-seeking behavior happens when consumers have low involvement in the purchase decision but perceive significant brand differences. This leads them to switch brands for the sake of variety or novelty. This behavior often applies to products that aren’t high-stakes, where customers like experimenting with different options.
For example, variety-seeking behavior might look like a customer shopping for flavored coffee pods online. Because coffee pods are relatively inexpensive and quickly consumed, the customer regularly tries new brands and flavors, keeping their daily coffee experience fresh and exciting.
How can you keep customers hooked on your product when they have other options? The following ideas can help:
- Manage your inventory well to avoid stockouts; you don’t want customers switching brands because you don’t offer enough variety.
- Regularly offer new products (and attractive deals) so people don’t get bored.
- Establish a loyalty program to incentivize repeat purchases.
- Stay top-of-mind by communicating with customers regularly.
How To Research Customer Behavior
To understand customer behavior, you need to collect and analyze both qualitative and quantitative data. This section will explore five ways to do this.
1. Analyze Website Activity and Sales Data
Tracking customer actions on your ecommerce site, such as page views, time spent, and purchasing patterns, is an effective way to identify trends in behavior. This approach provides a data-backed view of what’s resonating with customers and what’s not, revealing what needs to be optimized.
Google Analytics is one of the most commonly used website analytics platforms, but many businesses also use heat mapping tools or other solutions to track on-site engagement more granularly.
Just as you should monitor actions customers take on your website, you should pay attention to sales data. Finding patterns in purchases can help you see which products are most popular, how demand has shifted, and which products customers tend to buy together.
2. Run Experiments
Once you have a basic understanding of how customers interact with your website, you can begin running experiments. Using A/B testing, you can test changes in website design, product displays, or checkout processes to see how different versions impact customer behavior.
To make your experiments successful, make sure to choose clear, measurable goals and test just one variable at a time.
3. Conduct Market Research
Market research involves gathering insights about target audiences through methods like focus groups, interviews, or online forums. It provides a direct understanding of customer attitudes, desires, and challenges. Market research can reveal deeper motivations behind customer behavior and highlight new opportunities for product or service improvements.
4. Monitor Consumer Trends
In addition to diving into the behavior of your current customers, it can be helpful to keep an eye on general consumer trends and preferences. By staying up-to-date on your audiences’ interests, you can more effectively cater to their wants and needs and adapt quickly to meet evolving expectations. For example, consumer trends might prompt a business to introduce a new product or experiment with a new sales channel.
Try browsing social media, following influencers, or using trend-tracking tools like Google Trends to stay informed.
5. Seek Feedback
Another great way to understand customer behavior is to directly ask them about their shopping experiences. By encouraging customers to leave honest feedback, you’ll uncover pain points, unmet needs, or areas for improvement.
Many businesses have success with automated post-purchase emails requesting feedback. Some provide an easy-to-find feedback button on their website or follow up after customer service interactions. You could also read reviews that customers leave on your website.
Segmenting Customers Based on Behavior
Businesses often segment customers by dividing them into groups with shared characteristics or behaviors. By segmenting customers, you can more effectively craft targeted, personalized messages that convince people to buy.
Purchase
Purchase behavior segmentation involves categorizing customers based on their buying patterns, including how often they make purchases, the size of their orders, or the types of products they buy.
Analyzing these habits allows businesses to identify one-time buyers, repeat purchasers, or high-value customers who frequently make large purchases. They might then offer rewards to frequent buyers or promotions for those who only buy during sales.
Benefits Sought
When you segment customers based on the benefits they seek, you focus on understanding the main motivations behind their purchases, such as quality, convenience, or affordability. This makes it easy to align your product offerings and marketing messages with what different customer segments value most. For instance, some shoppers may prioritize eco-friendly products due to sustainability concerns, while others look for the fastest delivery options or the lowest prices. Catering to these preferences can lead to increased brand loyalty and higher satisfaction rates.
Timing or Occasion
Timing or occasion-based segmentation categorizes customers by when they make purchases, whether tied to specific seasons, holidays, or significant life events. This method is highly effective for aligning marketing strategies with time-sensitive promotions and product launches. By understanding the occasions that prompt purchases, businesses can optimize their campaigns and manage inventory to meet peak demand.
Brand Loyalty
Segmenting customers by brand loyalty involves identifying how committed they are to a brand. Different segments might include devoted advocates who consistently purchase and recommend products, occasional buyers who might choose different brands, and those who frequently switch based on price or availability.
Understanding brand loyalty helps businesses create more effective retention strategies, such as loyalty programs and exclusive rewards for their most dedicated customers.
How Norton Shopping Guarantee Enhances Customer Trust
Humans have such diverse perspectives and experiences that it can sometimes be difficult to measure and predict our actions. But we all have one thing in common: a need for transparency and honesty. If your business can embody these values—and prove that you’re trustworthy—you’ll see better results across the board, from acquisition to retention.
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