Consumer Behavior Analysis

7 min readMay 20, 2022

Consumer behavior research assumes that customers are participants in the marketplace. Consumers, according to role theory, play a variety of roles in the marketplace. Consumers perform a variety of roles in the decision-making process, from information provider to user to payer to disposer.

“ Consumer Behavior is defined as behavior that consumers display in searching for purchasing, using evaluating and disposing of products and services that expect will satisfy their needs ” - Schiffman (1997)

Consumer behavior might be a mystery at times, but intelligent firms around the world are using consumer behavior analysis to help them make tough decisions. And more often focus on:

Filling Knowledge Gaps
Identifying Emerging Trends
Voice of Customer Innovations
Revealing Emotions & Behavior
Connecting with Multiple Segments
Keeping Pace with Consumer Values
Understanding Performance Impact
Enhancing Data Analysis Expertise

What is Consumer Behavior Analysis?

A consumer behavior analysis illustrates the various factors that influence an audience. It gives you an insight of the customer’s motivations, goals, and decision-making procedures as they go through during the customer’s journey. This analysis might help to figure out how customers feel about your firm and whether or not that feeling is consistent with their basic values. Studying consumer behavior would allow you to answer several questions, such as:

How consumers feel about alternatives to their preferred brands;
How consumer behavior is swayed by their surrounding environment;
How marketing campaigns can be improved to more effectively influence customer behavior.

Types of Consumer Behavior

Purchase behavior: what a costumer is willing to buy

a) Demand: A product’s, service’s, or brand’s general level of interest

b) Retention: How long a customer continues using a particular brand

c) Recall: How accurate are the consumers are when they are recalling their purchase experiences

2. Usage behavior: how the product will be used

a) Attrition: The proportion of customers who abandon a product or brand because of discontent, perceived lack of value, or other issues.

3. Consumer loyalty: The extent to which customers stick with a single brand over time.

a) Post Purchase Behavior: How a consumer feels about a product after purchasing the product or service

b) Pre- purchase Behavior: How a consumer decides about which product to buy.

What factors that effect Consumer Behavior?

Psychological Factors : Consumer behavior is majorly influenced by human psychology. These characteristics are difficult to quantify, yet they have enough significance to affect a purchase choice.
Social Factors : Humans are social beings that are surrounded by many people who impact their purchasing decisions. Hence their purchasing behavior is influenced by other people around them.
Economic Factors : Consumer purchasing habits and decisions are heavily influenced by a country’s or market’s economic state. When a country is prosperous, its economy is robust, which leads to a larger money supply in the market and better consumer spending power.
Cultural Factors : A collection of ideas and ideologies that belong to a specific community are connected with a group of people. When a person originates from a certain community, the culture associated with that community has a strong influence on his or her conduct.
Personal Factors : Consumers’ purchasing decisions are influenced by personal factors. These personal variables vary from person to person, resulting in a wide range of views and consumer behavior.

Why consumer behavior data is important?

Consumer behavior is an important part of marketing. We can learn how consumers make decisions and how potential customers will react to new products or services based on consumer behavior data. Exploring meaningful insights from data is critical to assisting businesses in developing appropriate strategies.

For example, if you visit this type of website and are unsure where to begin, you will lose patience and want to leave quickly. That’s why we do testing (like AB tests and usability tests) to learn more about customer behavior and improve important KPIs like conversion rate, revenue, customer lifetime value, and average order value (Average Order Value).

Steps required to conduct Consumer Behavior Analysis

Step 1: Dividing customers into segments

It’s easier to acquire a precise assessment if you divide your target audience into groups based on the traits that are most likely to influence their purchasing habits. Location, gender, age, status, education, and occupation are just a few of the criteria.

Step 2: Determine the most important benefit for each segment

Each consumer persona will have a different reason for picking your company, and it’s critical to figure out what that reason is. Consider the external elements that influence the customer’s purchasing choice in addition to the product or service.

Step 3: Collect and allocate quantitative data

The first two processes aid in the extraction of qualitative data, while the third step is to gather quantifiable data on your customers. While certain resources may be easier to obtain than others, it’s critical to gather data from both internal and external sources. This gives you a full picture of both micro and macro customer trends.

Step 4: Compare and contrast your quantitative and qualitative information.

After the data is collected, the next step is to compare the qualitative data against the quantitative. Look at which persona bought what product, when they bought it, and where. Did they return for another visit? By comparing the two sets of data against the customer experience, develop a detailed understanding of the consumers’ journey. Once the data is compared to the customer journey, it is possible to pick out some recurring trends and look for common roadblocks that seem to pop up at different lifecycle stages.

Step 5: Apply analysis to a marketing campaign.

After understanding the customers’ behaviors, next is to capitalize it. The findings from the data obtained from the above step can be used to optimize the content delivery. Pick the best delivery channel for each persona, and by taking the advantage of opportunities it can be used to personalize the customer experience. And the insights gained from conducting your customer behavior analysis should give a good idea of where updates can be made to the marketing campaigns.

Before rolling out your new initiatives, use analysis to determine what customers will think about these changes. Customers are habitual creatures, and some will push back on change even if it’s for the better. These customers tend to be more loyal to a brand, so it’s imperative to not lose them as a result. Consider different ways to introduce change to these customers, and be receptive of their feedback.

Step 6: Analyze the results.

By using the data we can establish buying behavior patterns that are typical to your target audience. Through which we can create reports which answers questions such as:

How does a customer access the store?
What are the main problems faced by the consumer when completing an order?
What aspects of functionality and design were misunderstood by the user?

As new technology, politics, and events constantly influence client wants, it’s critical to review your outcomes on a regular basis. Revisiting your analysis on a regular basis ensures that you’re catching any new trends that emerge.

Analyzing the consumer’s behavior

Consumer behavior analysis might be challenging at times, but it can be made easier by answering the following questions:

Who purchases the products and services? To begin, conduct market research to determine who your target audience is.
Who makes the decision to purchase the products and services? You should figure out who is making the purchasing decisions for your items or services. For example, an organization may buy furniture for its office, but the decision to buy such furniture may have been made by the interior designer engaged by the organization.
Who influences the decision to purchase the products? Influencers such as children are a perfect example. Parents may purchase a toy or game for their children, but the children are usually the driving force behind these purchases. As a result, toy producers may have advertised their products on cartoon networks.
What factors influence the purchase decision? Using the toy purchase example above, youngsters approach their parents and request the product. As a result, the influencer persuades the decision maker to buy a product in this case. It is critical that marketers understand this process.
What role does a consumer’s lifestyle play in their purchasing decisions? Adventurers might purchase hiking boots or travel backpacks. People who enjoy reading, on the other hand, would purchase books or electronic reading equipment.
When do the consumers buy products? A consumer may want to acquire a product or service on a variety of occasions. Parents might buy a gift for their child’s birthday, and an organization might buy new furniture when it moves to a new location.

Advantages of Consumer Behavior Analysis

a) Identify consumer motivation and habits.

b) To provide a better shopping experience by determining where customers have issues.

c) Adapting current marketing efforts and launching new ones based on better data analysis

d) Precise segmentation based on customer analysis

Conclusion

Customer behavior analysis allows business managers to gain a long-term perspective on average purchase value, customer lifetime, primary audience categories, and their needs by analyzing customer behavior. Having objective data and smart insights makes it much easier to continue developing, selling, and scaling. You know what areas to look into, how to appeal potential clients, and the functionality that needs to be improved.