“Customers set up a hierarchy of values, wants, and needs based on empirical data, opinions, word-of-mouth references, and previous experiences with products and services. They use that information to make purchasing decisions.” – Regis McKenna
Customer behaviour simply put is the decisions that lead to actions, resulting in the buying pattern of a customer. There are several reasons and ‘drivers’ for this behaviour – a ‘subject’ that is keenly studied by companies and market analysts. Studies show that the buying patterns of customers seem broadly based on two reasons – emotional and logical. Whatever be the reason, the fact is that by studying customer behaviour with regard to buying, helps companies to understand what worked in the past, and even predict the future behaviour of customers. It is imperative for companies to understand the ‘motivations’ behind why customers decide and act in certain ways and display certain emotions towards particular brands and companies. The need for this understanding becomes more pronounced because every customer would have a different set of reasons and expectations, making service to customer a highly subjective topic. Companies need to understand their customer psyche in order to act and create reasons for them to buy and stay with the company – most companies still struggle with understanding the motivations that drive customer behaviour. This unawareness is usually the difference between success and failure of a company.
Without an understanding of what drives customer behaviour towards a company / brand would ensure that the company would be incapable of customizing and personalizing its offerings and service. A generalized approach towards customers soon leads to frustration and churn. Companies that make the effort to understand the reasons why customers behave a certain way would find it easier to make connections, form a rapport, and build engagement for their brand / business. In addition, it is obvious that each customer would have different needs, preferences, expectations, and would be dealing with their unique situations – and these are the key drivers of customer behaviour, which companies would benefit immensely by understanding.
Another of the challenges for companies to understand customer behaviour is the inability gauge why customers seem to like a product or service, but do not seem connected with the company or the business. It would be necessary for a company to understand the detachment – the underlying reason usually would be that customers do not have pleasant experiences when dealing with the company. For example – slow responses to queries, problematic buying, or returning processes, and other such reasons, usually put off the customer from interacting with the company. In addition, this lack of engagement of customers ensures that companies find it extremely hard to convert them from users to being subscribers (for subscription-based companies). The customers may continue using products, but no amount of promotion and advertising gets them to long-term subscriptions. While this can be very disheartening and challenging for companies, there way out is to grasp and thoroughly understand what drives customer behaviour.
We have mentioned several times in the past, that customers are smart and able to perceive a one-off great experience versus consistency of such experiences, and know which companies are committed to giving them. It is important for companies to set a benchmark with the kind of experiences they offer, but they must also remember that a high benchmark may not be sustainable or consistently achievable, and even a slight drop in standard could frustrate customers. In order to drive customer behaviour in your favour, it would be better to deliver good experiences each time with a customer – maintaining consistency across all channels and touch-points. Too many vicissitudes in experiences and service tends to confuse customers, leaving them unsure what to believe about a company – one of the reasons for negative customer behaviour, including churn.
Customers want to feel at ease and comfortable while dealing with a company and are usually willing to adapt and learn about new products and services, making these work in their favour to serve a specific need. Customers must see value for money, ease of doing business, accessibility of company reps, due importance given to their business, and other factors that would keep them with the company, and drive them to buy. However, companies with a fixed ‘mind-set’ and traditional approach make it tough for customers given a number of rules and approvals required, a lack of transparency, and inconsistency in the service provided across channels and touch-points. Such restrictive business practices negatively influence customer behaviour – leading them to stop buying and ultimately leaving the company for a competitor. The fact is that unless companies can lend a personal and humane touch to their interactions, it would be tough to reach out to the ‘human’ behind the customer, making the buying or not decisions, based on reasoning or emotions. Human behaviour is unpredictable and in order to get some semblance of understanding, companies must connect with that human aspect.
Another factor that drives customer behaviour is their need for a product versus just a desire to own a particular product / brand. As mentioned, sometimes customers buy simply because the product would make them feel good, enhance their social standing, or give them ‘bragging rights’ within their circle of associates and friends. It is for companies to understand these feelings and needs, and offering products and services to the right customers at the right time, increasing the possibility of purchases. In addition, the companies need to show their customers that they are valued and important to the business – these are two very strong drivers of positive customer behaviour, in addition to consistently good customer service.
Amongst the top reasons or what drives customer behaviour are personal preferences – likes, dislikes, values, and beliefs. A lot of buying happens around these factors, and these would remain largely unchanged irrespective of promotional or advertising activities surrounding products. For example – a personal preference of being vegetarian is unlikely to change irrespective of how attractively a company may portray its meat products, and could even stop buying other products from the company owing to their vegetarian preferences. It would be necessary for a company to understand these preferences, since misdirected advertising could frustrate customers and put them off the company for good.
While preferences and social standing play an important part in driving customer behaviour, possibly the most basic yet key reason would be monetary. A customer must have the money to buy products and or services – even if they purchase items on instalments, they would need some amount of upfront payment and the capacity to pay off the regular payments. It becomes imperative for companies to match the pricing of their products with their target audience – a great product could be left on the shelves simply because its price point would not match the buying ability of the customers. An understanding of customer buying prowess would be essential – customer segmentation plays an important role in pricing too. By placing customers in groups based on their purchasing power would help a company to target only certain customers for some niche products that would be highly priced.
Understanding what drives customer behaviour means that a company would take the time to make an in-depth ‘study’ of individual customer circumstances, the family and social status, where they work and the job they do, the cultural beliefs, and other such aspects. By understanding these influencing factors, a company and its brand would have a better chance at selling more, sending out personalized messages with the company’s USP, making advertisements more efficient and in line with the mind-set and unique situations of customers. Finding what drives customer behaviour may be challenging and time consuming, but the benefits far outweigh the efforts.