Understanding Customer Behavior to Boost Sales

Businesses are constantly looking for ways to optimize their costs, increase revenues, and develop relationships with customers. All this will be difficult to achieve if you have a poor understanding of users, their requests, behavior, and pain points.

The effectiveness of a business strategy built on guesswork and a similar strategy taking into account consumer behavior will differ many times over in various metrics. If you are ready to understand consumer behavior, structure, and use this data, then you have come to the right place.

Article Shortcuts:

• Why Consumer Behavior Matters?
• Methods of Collecting User Behavior Data
• Customer Behavior Data Utilization Strategies

Source: Freepik

Why Consumer Behavior Matters?

In this section:

• Creating a More Appealing Product
• Developing More Effective Marketing Strategies
• Improving Customer Experience
• Entering New Markets

• Creating a More Appealing Product

Consumers have different needs, but understanding them can help you cover most or all of them.

You might want to create a series of products for different price points and needs, or one product for all occasions. Understanding consumers correctly equals a higher probability of success.

• Developing More Effective Marketing Strategies

Marketing without researching customers and users is like looking for an anonymous star in the sky. Some people get lucky, but the success rate is too low.

As a result of customer research, marketers can better understand what exactly pushes customers to buy, what are the conditions for ordering and abandoning a purchase.

Based on such data, you can adapt your advertising campaign to the target customer and reach out to the client. You will be able to manage emotions, desires, and find solutions for delivery or payment problems.

Source: Freepik

• Improving Customer Experience

When you analyze consumer behavior, you’ll see that certain stages are quite effective at moving customers into your sales funnel, while others are where many of them stop. This could be anything.

You could be losing up to 50% of your customers just because of the login requirement, or even more if your SMS server is down. But with real data about the customer journey and their experience, you can optimize the buying process, create a smoother customer journey, and increase brand loyalty.

• Entering New Markets

Consumers from different regions can be different. What seems normal in the US, such as online payment via PayPal, may be problematic in South America.

When you study consumer behavior, you can segment data by location, culture, device, and other metrics.

This will help you capture new market segments. You will also have the opportunity to diversify your products and services, which will also have a positive impact on revenue.

Source: Freepik

Methods of Collecting User Behavior Data

There are several methods to collect data on consumer behavior:

• Surveys: Surveys are a common way to gather data on consumer preferences, attitudes, and purchase behaviors. They can be conducted online, over the phone, or in person.
• Interviews: Conducted either face-to-face or over the phone, interviews provide in-depth insights into consumer behavior and can uncover sensitive or complex issues.
• Observation: By observing consumers in real environments, such as stores or online, businesses can better understand how consumers interact with their products and services.
• Focus Groups: These involve a group of consumers discussing a specific product or service. Focus groups provide insights into consumer opinions and preferences and can help uncover new ideas or concerns.
• Data Mining: This method involves analyzing large volumes of data, like online purchase habits or social media activity, using algorithms and statistical techniques. Data mining reveals patterns and trends in consumer behavior.
• Experimentation: By altering one or more variables and analyzing the impact on consumer behavior, businesses can gain valuable insights. Experiments can be conducted in natural settings, such as stores, or controlled environments, like laboratories.

User path analysis is something that is used en masse everywhere: from television to dog walking services. And yet, even large companies still make mistakes.

An example of this is the query: "How to watch ABC on Roku?" This is a clear signal that the customer path has not been sufficiently studied.

In addition to the fact that even in the US it is often difficult to do without instructions, outside the country the situation is more complicated. Many have to use VeePN.

When you activate VeePN (a VPN provider), you can bypass regional restrictions that ABC is forced to apply to comply with copyright holders' requirements. Fortunately, there is a free trial period.

Even without taking into account regional restrictions, the way to activate the channel is not entirely obvious, which means that the company simply does not study consumer influence. They lose a significant portion of viewers because of this.

Source: Freepik

Customer Behavior Data Utilization Strategies

In this section:

1. Reduce the Pain of Shopping
2. Try the Enemy's Tactics
3. Use Urgency to Your Advantage
4. Take Baby Steps with Your New Product

1. Reduce the Pain of Shopping

Neuroscientists describe human spending patterns as a "spend 'til it hurts" process. But every shopper has their own pain point, and price is a major one, especially for stingy and overly rational shoppers.

You can use one of the strategies to reduce the pain of a purchase:

• Rethink Value. If we talk about a service or product that costs $1,000 per year, many people will wonder if they can afford it. Especially if the payment is a one-time thing. But what if the product was priced at $84 per month instead? Sounds more reasonable, right? The point is, $84/month is the same as $1,000/year, yet it feels more approachable when broken down into smaller increments.
• Sell in Bundles. Consumers, especially conservative ones, prefer making purchases in one go rather than buying multiple items separately. Bundling products reduces multiple pain points into a single one, even if the total price is higher. This approach not only makes the purchasing process simpler but also minimizes decision fatigue.
• Use the Subtleties of Psychology and Neuroscience. A Carnegie Mellon University study found that adding a single word to a shipping fee description increased response rates among conservative spenders by 20%. Changing “a $5 fee” to “a small $5 fee” made a big difference. Such subtle tweaks can significantly improve your conversion rates.

2. Try the Enemy's Tactics

It's often said that who you know is as important as what you know. Networking is vital, but surprisingly, having an enemy can also be beneficial. This research suggests that the presence of an enemy can unite your team and intensify loyalty to your brand, making it a powerful strategy for achieving business success.

Source: Freepik

3. Use Urgency to Your Advantage

Creating urgency in your copy is a tried-and-true tactic for boosting sales. A classic study by Howard Leventhal highlights this. He handed out two different tetanus pamphlets to participants.

Both detailed the severe effects of tetanus, but only the second pamphlet included information on where to get vaccinated. The result? Those with the second pamphlet were nearly 25% more likely to get vaccinated.

This study shows that simply creating fear or urgency isn’t enough.

Providing actionable steps is crucial for converting interest into action. Remember, it's not just about instilling urgency; it's about guiding your audience towards a solution.

4. Take Baby Steps with Your New Product

Take small steps when launching a groundbreaking product. It’s essential to take baby steps rather than declaring yourself the next big thing. Why? Changing consumer behavior takes time.

Gradually shift attitudes towards your brand, rather than going for the hard sell right away. Avoid overwhelming customers with bold claims like, “Buy our product A, which is better than X, Y, and Z.”

Instead, develop a clear communication strategy that introduces your brand in stages. Make customers feel comfortable, not pressured into making drastic decisions.

Your goal isn’t to sell ice to an Eskimo; it’s to help users realize why they need your product.

Conclusion

Why should customers choose your company over competitors?

The key lies in influencing consumer behavior with exceptional customer service. While there isn't a magic formula, consistent steps can ensure loyalty. Start by gathering data to gain valuable insights. 

Remember, even in B2B transactions, you're dealing with people. Treat them with respect and integrity, and success will follow.

Author Bio

Sara is passionate about helping businesses understand and connect with their customers. With a focus on data-driven insights, she provides practical strategies to boost sales and drive growth.