Photo by Tim Douglas
“Each business is a victim of Digital Darwinism, the evolution of consumer behavior when society and technology evolve faster than the ability to exploit it. Digital Darwinism does not discriminate. Every business is threatened. – Brian Solis
Every business deserves to be successful, given the hard work and toil the people involved put into it. The success of a business depends largely on its customers. Understanding customer behavior is an important factor in this success. Without it, gaining and retaining customers would be almost impossible. The business world is highly competitive.
Companies that make an effort of understanding customer behavior are better equipped at providing customers with personalized products and customized solutions. A crucial part of understanding customer behavior is for companies to know that customers buy for various reasons. That is, emotional and logical reasons, and it would be beneficial for a company to understand these reasons. The sooner a company can grasp these reasons, it would be more accurate in understanding customer behavior. It can be managed by getting feedback from customers through surveys and using a tool such as Interactive decision trees.
Companies Are Able To Group their Customers
Most companies segment their customers in a number of ways. It is easier to understand customer needs and requirements and put together offerings that would be more valuable and beneficial to them. By understanding customer behavior, a company can create bonds and build emotional relationships with its customers. It is extremely crucial in gaining customer loyalty, brand advocacy, and referrals. The customer is perhaps the most important part of any business since without them there would be no business.
Understand the Needs of Their Customers
Understanding customer behavior in-depth and consistently would enable a company to know about the needs and expectations of its customers. This in turn would help them to design products and put together services that are of optimum utility to the customers, drawing them closer to the company. Customer behavior enables the company to ascertain a price point for particular customer segments. The company puts together the most effective promotions and incentive schemes. Overall, the company is able to serve the customers in a manner that would encourage repeat business and referrals. The other advantage of understanding customer behavior is that enables a customer to change the behavior to an advantage. It allows a company to shape customer opinion in its favor and achieve its objectives of more sales, profits, and sustainable success.
Customer Behavior Improves Customer Retention
Therefore, understanding customer behavior ensures customer retention and a better hold on the relationship between both sides. Customer behavior should not be restricted to or end once a customer makes a purchase. Future business and the success or failure of the relationship will depend on how consistently and well a company understands and predict its customer’s behavior. It helps predict whether a customer would buy from the company in the future. The customer’s reactions to the company’s offerings give insights into how customers perceive the company. Positive feelings would lead to continued business, while the opposite would be true if the feelings were negative.
Understanding Customer Behavior Is A Process
In today’s competitive business environment, companies can be unsuccessful if they are to believe that customers are always happy. Such a thought process can lead to company laxity. The company could make no effort to know its customer’s needs. Therefore, understanding customer behavior is a process. It can help a company improve its products, innovate and create products that are based on what customers want and need. We say that understanding customer behavior is an ongoing and relentless pursuit. Customer preferences and needs keep changing and evolving. To keep up with them, companies must be steps ahead and be able to predict how customers will behave in the future. Proactively ascertaining customer needs would require a thorough understanding of customer behavior.
Companies Meet Customer Needs and Wants
Satisfying customer needs and wants further accentuates the need of understanding customer behavior. Producing goods and services by guessing what customers need, could be a waste of company time and resources. If customers do not find value in a product, even the best and most carefully crafted products could go to waste. As earlier mentioned, customers buy for various reasons and emotions. If a customer likes a product/brand, they are would be willing to pay a high price for it, even if there are similar products/brands available at a lower cost. Understanding customer behavior puts the company in control. This means that by creating products that customers love and putting services together based on customer feedback, a company could actually alter customer behavior for their benefit.
Helps to Differentiate Customers
Understanding customer behavior could help a company to time its promotions, marketing, and other advertising techniques. For example, if a particular customer is more inclined to buy during the end of the season, the company could send the customer promotional information informing them of end-of-season sales and other discounts. Understanding customer behavior helps a company to differentiate between its customers. For instance, teenagers can look for fresh and trendy styles irrespective of when these styles come about. On the other hand, an office-going person would prefer comfort and a sophisticated look for styles that suit their personality and job type. Therefore, customer behavior could be largely governed by what people would want to express about themselves using the products.
It Helps Companies Get Closer To Their Customers
Some buyers may not necessarily be buying for themselves. They could be buying for someone else, who is the end user of the product or service. In this case, understanding customer behavior would have a two-fold benefit. An understanding of the buyer and the understanding of the user. A great experience for both. These people would lead to a positive effect on two distinct customer groups. This translates to greater reach and enhanced capability of the company to get closer to its customers. In addition, the company should bear in mind what products or services these groups consistently buy and use. It narrows the company’s focus and allows them to promote those particular products to those groups.
Companies Understand Their Clients Buying Behavior
With so many options and channels to buy, understanding customer behavior enables a company to know which customer prefers shopping online and which ones make a trip to a physical store. Observing and understanding this buying behavior allows the company to provide customers with more choices and the flexibility to buy from anywhere. The easier a company makes it for its customers to buy, the higher the probability of them buying from the company. Such attention and focus would build trust and dependability, thereby aligning customer behavior with the company’s objectives and needs.
The Verdict
Understanding customer behavior is also about keeping a grasp on what kind of information they would need and could use. Observation of the methods customers use to gain information. It’s about who they are most likely to believe in and the data they use to make buying decisions. Now, this can significantly increase the company’s chances of gaining favor with the customers. Therefore, success in business is not only a factor in producing outstanding products or those with interest. Without an understanding of customer behavior, a company can have its efforts go to waste, and all its accomplishments turn to failure.
