“Each business is a victim of Digital Darwinism, the evolution of consumer behaviour 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 behaviour is an important factor in this success, as without it gaining and retaining customers would be almost impossible. The world of business is highly competitive and those companies that make the effort of understanding customer behaviour would be better equipped to providing customers with personalized products and customized solutions. A very important portion of understanding customer behaviour is for companies to know that customers buy for a variety of reasons – emotional and logical – and it would be beneficial for a company to understand these reasons. The sooner and better a company can grasp these reasons – there understanding customer behaviour would be even more accurate.
Many companies segment their customers by a number of ways to make it easier to understand their needs and requirements and put together offerings that would be more valuable and beneficial to them. By understanding customer behaviour, a company would be able to forge bonds and build emotional relationships with their customers, which is extremely crucial to gain 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.
Understanding customer behaviour in-depth and consistently would enable a company to know about the needs and expectations of their customers. This in turn would help them to design products and put together services that would be of optimum utility to the customers, drawing them closer to the company. Understanding customer behaviour enables the company to ascertain a price point for particular customer segments, put together the most effective promotions and incentive schemes and overall serve the customers in a manner that would encourage repeat business and referrals. The other advantage of understanding customer behaviour is that enables a customer to change the behaviour to advantage. It allows a company to mould and veer customer opinion in their favour, thereby achieving its objectives of more sales, profits and sustainable success.
Understanding customer behaviour therefore, ensures customer retention and a better hold on the relationship between both sides. Understanding customer behaviour should not be restricted to or end once they make a purchase. Future business and the success or failure of the relationship would also depend on how consistently and well a company can understand and predict its customer’s behaviour. Understanding customer behaviour would help a company to predict whether they would buy from the company in the future. The customer’s reactions to the company’s offerings would provide insights into how customers perceive the company – positive feelings would lead to continued business, while the converse would be true if the feelings were negative.
In today’s competitive business environment, no company could remain successful if they were to believe that all their customers were happy at all times. Such a thought process would lead the company to complacency and they would make no effort to know consistently their customer’s needs. Understanding customer behaviour, therefore, is a process and can be managed by getting feedback from customers through surveys and other means. It would help the company to improve their products, innovate and create products that would be based on what customers want and need. We say that understanding customer behaviour is an on-going and relentless pursuit because customer preferences and needs keep changing and evolving. To keep pace with them, companies must be a few steps ahead and be able to predict how customers would behave in the future. Proactively ascertaining customer needs would require a thorough understanding of customer behaviour.
The importance of satisfying customer needs and wants consistently further accentuates the need of understanding customer behaviour. Producing goods and services randomly, based on guesswork of what customers could need, would be a waste of time and the resources of a company. If customers do not see value in a product, even the best and most carefully crafted products would go to waste. As we mentioned, customers buy for a variety of reasons and emotions play a great role – so if customers like a product / brand, they would be willing to pay a high price for it, even if there were similar products / brands available in the market for a lower cost. Understanding customer behaviour puts the company in control – this means that by creating products that customers love and putting together services based on customer feedback, a company could actually alter customer behaviour for their benefit.
Understanding customer behaviour could help a company to time its promotions, marketing and other advertising techniques. For example – by observing that a particular customer is more inclined to buying during end of season, a company could send such a customer its promotional material informing them of end of season sales and other discounts. Understanding customer behaviour would help a company to differentiate between its customers – for instance, teenagers would look for fresh and trendy styles irrespective of when these styles come about, while an office-going person might prefer comfort and sophistication and look for styles that suit their personality and type of job. Therefore, customer behaviour could be governed largely by what people would want to express about themselves using products.
Some buyers may not necessarily be buying for themselves. They could be buying for someone else, who would then be the end user of the product or service. In this case, understanding customer behaviour would have 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, another factor that a company should bear in mind is what products or services these groups consistently buy and use. It would narrow the focus for the company and allow them to promote those particular product segments to those groups more often.
With so many options and as many channels through which to buy, understanding customer behaviour would enable a company to know which customer prefers shopping online and which ones would rather make a trip to a physical store to buy. Observing and understanding this buying behaviour would allow the company to provide the customers with more choices and flexibility to buy from anywhere. The easier a company can make it for its customers to buy, the higher the probability of them buying from such a company. Such attention and focus would build trust and dependability, thereby aligning customer behaviour with the company’s objectives and needs.
Understanding customer behaviour 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, who they are most likely to believe and what data do they use to make their buying decisions, would significantly increase the company’s chances of gaining favour with the customers.
Success in business, therefore, is not only a factor of producing outstanding products or those that seem to be ‘the latest fad’. Without an understanding of customer behaviour, a company would find its efforts going to waste and all their accomplishments turning to failure.