While the goal may seem easier to achieve, it requires close attention and a systematic approach. That’s where consumer behavior analysis comes into the picture.
It is a process of understanding your potential clients, including their buying habits, frequency patterns, and background factors influencing their purchase decision. It helps you examine their behavior and trigger points at each interaction.
Want to start your consumer behavior analysis journey? Unsure about where to begin? Learn about this fundamental concept from scratch to master the art.
Types of Customer Behavior
Before conducting a consumer behavior analysis, it’s vital to understand your clients’ buying behavior to gain a better perspective. It helps you improve marketing strategies toward your customers’ specific spending needs.
The common types of buying behavior include:
Complex behavior
This behavior comes into play when a customer purchases an expensive product or service. Since your client is spending on a pricey product, they may take ample time to research before committing to a massive investment.
Your clients may read online reviews and spend time knowing the product’s benefits. They can also consult their friends and family members for other opinions.
Variety-Seeking
It mainly occurs when your customer often spends on the same product or service but makes an opposite or different choice this time. It reflects that they are open to adding variety to their routine shopping and decision-making.
This behavior is often encountered when consumers see new advertisements and give them a try to see how they differ from their regular purchases.
Dissonance-Reducing
There may be some customers who are often worried about regretting their choices. Such clients are highly involved in the purchase process. They often face difficulty differentiating brands and prefer making a head-to-head comparison between multiple products before purchasing.
Habitual buying
It’s probably the most accessible consumer behavior to track. Such customers put little thought into their purchases and follow a regular buying pattern. They often make a positive perspective about the product or service they are currently using and don’t want to deflect from the same. Sales Analysis: why it is important
Impulsive buying
Impulsive buyers typically take little to no time to purchase a specific product or service. They make random investments without researching or learning about its features and benefits. Several factors influence consumers’ impulsive buying behavior, including slogans, logos, or celebrity endorsements.
Benefits of Customer Behavior Analysis
Analyzing customer behavior can shape your future marketing campaigns. It helps you understand your client’s needs, interests, and buying patterns, thus improving productivity.
Here are a few benefits of conducting consumer behavior analysis.
Improved customer experience
The behavior analysis helps you understand your customer base better and lets you create bespoke journey maps for your profitable customers. The better you understand your prospects, the more quickly you can give them a personalized and targeted experience.
Increased customer retention
Understanding behavioral analysis helps identify what brings existing customers back. This way, you can optimize your operations to focus on the most loyal segment of clients, thus reducing customer churn.
Sales opportunities
It’s no wonder you can identify new opportunities and sales techniques by evaluating how your customers respond to a product or service. It also helps you identify new products to create and sales channels to explore. Marketers can use this consumer behavior analysis to kick off a marketing campaign for better outcomes.
Respond to red flags
In addition to increasing sales opportunities, consumer behavioral data lets you know why your customers are leaving or gravitating toward your competitors. Simply put, this analysis gets you in front of red flags, so you can handle them on time and avoid impacting sales in the future.
Tools & Techniques for Customer Behavior Analysis
Consumer behavior analysis requires careful planning, appropriate practices, and the best tools and techniques to get started. Below are some practical tools to get inside the minds of your customers.
Customer relationship management (CRM)
CRM helps you derive insights based on customers’ online behavior, from web usage to social media. It can easily segment your client base accurately to whom you can disseminate tailor-made marketing campaigns. Moreover, this software helps you identify what motivates individuals to make buying decisions.
Google Analytics
With Google Analytics, you can easily monitor the traffic to your site and check how your website is performing. This service is free yet powerful. Moreover, Google Analytics provides affinity data, in-market segments, user demographics, and more.
Social media listening tools
Today’s world doesn’t operate without social media handles. Hence, keep a strong presence across all social media platforms, and don’t be out of the loop. Social media allows businesses to interact with their prospects and audience directly, read their comments, and engage with them in real-time. Managing social media and staying active on it will help your business thrive.
Email marketing analytics tools
Email marketing has significantly changed since its inception. Landing your marketing emails in the customer’s inbox has become even more challenging. That’s where behavioral email marketing comes into the role.
Marketers should send automated, unique, and contextualized emails to every customer by tracking his recent behavior. And for this, they should use email marketing analytics tools. Such options draw valuable insights and optimize email campaigns for better performance.
Surveys and Feedback Forms
Lastly, you should not underestimate surveys and feedback forms. This way, you can better understand who your customers are and what they like the most about your product or service. Create custom surveys or feedback forms for a particular segment and dig deeper into your customers’ interests and buying patterns.
What are the Best Practices?
Now that we understand what consumer behavior analysis is, let’s dive into the nitty-gritty of how to conduct one to glean some actionable insights. Scroll down and review the best practices to understand your customer inside and out.
Break your audience into segments
First thing first!! Sales teams should identify major groups that visit your website and often purchase products. Outline similarities and differences between these groups to get started.
This evaluation begins with looking at demographics in your customer data. For example, where are your users come from, or how old are they? Don’t just rely on web analytics and go deeper. Search for their professional backgrounds and what media they consume.
When segmenting your audience, the vital segment is probably your most valuable customer. Check customer lifetime value, buying value, frequency, etc., to identify your best customers.
Identify the critical selling point of each segment
Every client has a different reason for choosing your business, and it’s imperative to identify that specific key selling point. There are plenty of ways to understand why they prefer your products or services over others.
It can include interviews and surveys, as they can offer you measurable data on user behavior. Look beyond the product or service and consider external factors driving their buying decision.
For instance, was it a purchase of convenience, or did they decide out of urgency? Knowing the answers helps you identify the unique selling points of your product that are most likely to appeal to each segment. Identifying the context of your client’s needs is a great way to determine areas to improve their experience.
Collect and store relevant data.
Once you get qualitative insights from customers, it’s time to bring in as much quantitative data as possible. That’s where data analytics comes into play. Any behavioral analytics data you may have will be relevant.
Don’t limit yourself to only company-specific data. Research what industry data is available and scrounge any data you can on competitors.
Compare qualitative and quantitative data
The next step is to compare the quantitative data against the qualitative one. Look for trends and valuable insights in the quantitative data and check them against the qualitative numbers.
Comparing these two sets of data against the customer experience can help you understand your prospect’s journey. It also enables you to identify recurring trends. Mark your high-value clients and acknowledge everything standing out with their purchase patterns.
Use your analysis in a campaign
Finally, apply your findings to optimize your content delivery. Select the appropriate delivery channel for each persona. Take advantage of opportunities where you can personalize the customer experience.
Respond to roadblocks on time and nurture customers throughout the entire customer journey. Use metrics like conversion rate and customer lifetime value to determine the effect of your updated campaigns.
How important is customer behavior analysis?
Customer Behavior Analysis is a great way to gain new insights into your client’s needs and interests. Once you are covered with these details, you can quickly build better and long-lasting relationships with customers, thus increasing revenue and reducing customer churn.
This behavioral analysis helps you categorize customers into different groups. By doing so, you’ll be able to create valuable marketing campaigns. It also ensures that all your clients receive what they want when they walk through your business door.
