The Psychology of Consumer Behavior: Insights for Effective Marketing Campaigns
Consumers play an essential role in helping businesses achieve success. Without loyal customers, you wouldn’t make any money or be able to grow your business. As such, appealing to customers and providing the most satisfactory experience possible should be a brand’s top priority.
However, as the times change, so do consumer behaviors. Simple marketing tactics no longer work as the market is overcrowded and consumers have become much more discerning when choosing which brands to support. Thus, in order to continue appealing to today’s consumers, you must work harder to get inside the heads of your target customers.
In other words, brands and marketers need to start thinking more like psychologists or at least learn to see things through a psychological lens. Delving into the mindset of consumers can enable you to better understand consumer wants and needs, their buying behaviors, and what influences them to make a purchase — all information that is necessary to create more effective marketing campaigns.
In this article, we will take a deep dive into the minds of consumers and what makes them tick. We will also cover the important role that marketing plays in consumer behavior and offer tips on how to more effectively appeal to today’s customers.
The Psychology of Consumer Buying and Spending Habits
As brands have increasingly started to realize the importance of better understanding their customers, we are starting to see a crossover between marketing and psychology. Some marketing degree programs, for example, are starting to include aspects of psychology and some brands are even working with psychologists to better understand their target audience.
All of this is to say that understanding the psychology behind consumer behavior is critically important. If you want to continue to appeal to today’s consumers and stay ahead of the game, you must make an effort to know your audience better.
What is Consumer Behavior?
Consumer behavior is concerned with how and why people buy and use products and services. For psychologists or brands, it is about studying these behaviors to better understand what influences customers and how to appeal to them. It is essentially a psychological study of consumer wants and needs and how those wants and needs influence their purchase decisions.
From a needs standpoint, it’s pretty easy to understand why people buy things like food, medical care, or shelter. These are things that people require to live. They are basic necessities. But what about the purchase of things they don’t technically need, such as an HD television or a luxury wristwatch?
This is not to say that none of the products or services offered by brands today are a necessity. For example, while some might say that a mobile phone is not a necessity, others might disagree and feel that they do need a mobile phone. The question then becomes not if the consumer needs the phone, but what influences them to buy one specific phone over another? And again, this is a question that can be answered by studying consumer behavior.
What Affects Consumer Behavior?
Understanding what affects consumer purchase decisions is where things start to go much deeper into the psychology of consumer behavior. For impulse buyers, there might not be a whole lot that influences them. They might simply see something new and cool and feel that they have to have it.
However, for others, there can be a number of things that ultimately lead to them making a certain purchase, which can include:
- Wanting to improve or display social status
- A response to an emotion, such as sadness or even boredom
- Gender stereotypes, such as a woman thinking she needs to buy makeup or a man thinking he needs to buy a rugged truck
- The surge of dopamine that creates pleasurable feelings
- Personality or personal interests
- Social media influences
People also make purchases based on philosophies and beliefs, such as a purchase influenced by someone’s religion or a person buying certain products to be more sustainable and eco-friendly. Consumers today are also heavily influenced by the idea of health and wellness, meaning they make a lot of purchases that they believe will help them look and feel better, such as skin care products or a yoga class membership.
As a whole, most factors that affect consumer behavior can be broken down into four categories:
- Personal: economic circumstances, occupation, and purchasing power
- Psychological: beliefs and perception
- Cultural: class and subculture
- Social: status, roles, and family
Within these categories, things can get broken down even further, but these are the basics of what influences people to make certain purchases.
Understanding the Consumer Decision Process
When a person makes a purchase, there are multiple steps involved before they finally decide to buy something. There is also a post-purchase process that occurs, which can either lead to the person keeping the thing they bought, or returning it.
- Problem recognition: This is when the consumer recognizes that they want or need something to solve a problem.
- Search: The next step is when the consumer starts searching for the thing they want, which might happen online, through social media, or by browsing in person at brick-and-mortar locations.
- Evaluation of options or alternatives: After seeing what’s out there, the consumer will then evaluate their options to determine which one is right for them or which one will best solve their problem. This is often where marketing plays an important role.
- Purchase decision: The consumer makes a decision and buys the product or service.
- Post-purchase evaluation: The consumer evaluates whether the purchase helped them achieve what they wanted to achieve. If the consumer is disappointed with the purchase, this is when they may decide to return it.
How Consumer Behaviors Have Evolved
Just as the internet and access to information have evolved, so too has consumer behavior. Basically, because we have easier access to more information now, consumers are more empowered as they can now make more educated purchase decisions.
If you tell them your product is the best, they can do their own research to determine if this is true or not, and they may find that another brand’s product is actually better or is more appealing to them.
Consumers today are search-savvy. There is no fooling them because they can simply hop on the internet and gather their own data to make their own conclusions.
If you want to appeal to today’s consumers, you must understand their search behaviors, and even learn to search better yourself as a marketer. The internet has had the biggest influence on how consumer behaviors have changed, so to master marketing today, you must master the internet and use things like keyword research to your advantage.
The Role Marketing Plays in Consumer Behavior
Understanding consumer behavior is essential for marketers, and marketing itself can also influence consumer behavior. By learning more about customers today and how they think and act, you can learn to reinforce positive beliefs associated with what you are offering. Studying consumer behavior can also help you more effectively align your messaging to the consumer’s mindset, as well as help you analyze consumer behaviors and habits at a more granular level.
Just as the way consumers behave can influence your marketing strategies, your marketing can also influence consumer decision-making. It goes both ways, which is why digging into the psychology of consumer behavior is so important.
How to More Effectively Appeal to Consumers
In a market that is oversaturated, the key to appealing to customers today is creating more engaging personalized content. And to do this, of course, you need to research your target audience and learn what makes them tick and what would influence them to specifically buy the product or service you are offering. In some cases, this requires not only improving your marketing tactics, but also reevaluating the products or services you offer and how you can make them better.
- Customer feedback: Testimonials and feedback are a more direct way of learning more about your customers and what they want. So if you find yourself struggling to get inside the head of today’s consumers, simply ask them for their feedback. There is no better way to learn what customers love and what they hate than by asking them directly.
- Data analytics: If you want to go a more indirect route, data analytics is the answer. There are numerous data tools available today — such as Google Analytics, Adobe Analytics, Amplitude, Salesforce, and Ahrefs — that enable brands and marketers to study and analyze consumer behavior. A data strategy is critical to creating effective marketing that appeals to consumers. If you want to create more powerful and compelling content, you need to adopt a data strategy that enables you to learn more about consumer behaviors.
There is no way around it. If you want to stay relevant and continue attracting customers, you must start adopting a more psychological approach to your marketing. The information you can absorb by digging into consumer behaviors is vital to meeting customer expectations and retaining a loyal customer base. Generalized marketing will no longer cut it. You must be smart and clever, and tailor your marketing to your target audience’s wants and needs.