According to Engel, Blackwell, and Mansard, ‘consumer behaviour is the actions and decision processes of people who purchase goods and services for personal consumption’.

Consumer Behaviour, also known as buyer behaviour, refers to how individuals are buying, consuming or disposing products or services. As these actions are impacted by multiple factors, studying consumer behavior involves significant research. This takes into account product search, how it’s features are evaluated by people, purchase and consumption patterns, to name a few. The post-purchase behaviour of a product is also studied as it represents whether the buyer is satisfied with it or not.

According to a report (www.salesforce.com, nearly 76% of consumers expect companies to understand their needs and expectations. What this means that if you don’t understand what a consumer wants before they can tell you, they are probably taking their business elsewhere.

So why is understanding and analysing consumer behavior important for any company and industry? It’s a crucial factor as it helps organisations learn how consumers will respond to a particular product, how much they are willing to pay, what features they are looking for, specific materials they want, etc. Don’t miss out on getting information such as how consumers are engaging with competitor websites, and how their content is influencing consumer behavior, etc. Studying consumer behaviour also helps market products and services effectively. For instance, factors like living standards, fashion, trends, etc. are constantly evolving and the consumer’s purchase attitudes are also changing due to this.

Here are a few specific highlights that take you through the importance of consumer behaviour:

Consumer Differentiation: In direct selling, consumer differentiation is a great tool to help distinguish one consumer from several others. This helps a seller create a target group of consumers with the same or similar behavior. Having said that, even though you have a targeted customer demographic, you can still have variations between specific clients. Each consumer group is different and it is natural that their needs and wants vary. Only if you are aware of these differences can you market your products effectively. Consumer differentiation will help you tailor-make your strategies to suit the needs of specific consumer groups and also expand the reach of your services.

Understanding Buyer Behaviour: Studying consumer behaviour patterns also assists direct sellers recognise and then forecast consumer purchase behaviour. By asking questions as to how they bought a product, when they bought it, why they chose to buy it, etc., a seller will not only understand what consumers bought, but also why they made the purchase decision. This will shed light on what is working in the market and help you market products better.

Competition Analysis: An interesting by-product of a consumer study is that it gives you an insight into: whether your client is also buying from your competitor, their product range, why he/she is doing so, what features your competitor is offering, their prices, payment plans, freebies, etc. Once you know of your consumer’s expectations, you can offer competitive advantages.

Crafting Successful Marketing Programmes: Analysing consumer behavior goes a long way in helping you create the most effective sales pitch and marketing campaign. Each of these can be designed for a specific consumer base that can be categorised by sex, buying patterns, age group, etc. For example, if you are marketing health foods, you will analyse consumers who fit this target group and what they are looking for in these products: protein, muscle gain, weight loss, etc. Once you have this information, you can design specific marketing plans that target this segment.

Developing New Products: Companies are always trying to make their products better and improve their success rates but this doesn’t come easily. A well thought-out consumer behavior study will lead to an analysis of their buying trends and also lead to fresh ideas to create new products. For example, a consumer study among the elderly who usually consume health supplements, etc. might reveal that they are looking for supplements in other formats - a health drink, for instance, and not necessarily a pill. This can lead to the creation of a whole new product category.

These insights, among others, can be derived using multiple ways. For instance, social media analytics (a result of surveys, publicly available data, etc.), surveys, among other channels. Remember, the more you try to understand your ideal customer, the better you will be able to design your marketing strategy.