Pepsi Co’s former CEO Indra Nooyi explains business in simple terms. “The basics of business is to stay as close as possible to your customers. Understand their behavior, their preferences. Their purchasing patterns.”
What is buyer behavior?
Simply put, buyer behavior is the study of customers, sometimes as individuals, and sometimes as groups. How they think. What they prefer. In what conditions they make their consumer choices.
The goal is to understand the consumer mindset and use that knowledge to inform your marketing strategy. See into the customer’s thought process, and use that understanding to meet them where they are at.
Simple? Maybe not, but buyer behavior is the vital force behind any successful, data-driven marketing campaign.
In this article, we to a deep dive, taking a look at the different types and patterns of buyer behavior.
Categories of Buyer Behavior
There are four textbook categories of buyer behavior. These are:
Complex Buying Behavior
High-involvement purchases with significant differences between brands. EVs are a great example. People spend a lot of time researching cars, perceiving each make to be considerably different from the next.
EV cars are genuinely unique on several fronts.
Tesla appeals to environmentally conscious consumers who just want the next cool item out there with features that actually stand out.
Dissonance-Reducing Buying Behavior
High-involvement purchases with few perceived differences between brands.
Casper, for example, offers a 100-night trial period for their mattresses.
If you aren’t happy with your purchase, you can return it, no questions asked. In reality, only about 10% of shoppers actually return their mattresses, but the guarantee elements the perceived risk.
This method can also be implemented by service-based industries like how Jorge Argota, a marketing professional and web designer, offers new clients a free Zoom call to ensure they are heard before they put any money down.
The call helps the potential client feel more at ease since they are given a definitive strategy laid out before them that is based on their personalized goals.
Law groups are another example. The average person may not understand what makes one lawyer different from the next. Firms struggle for position because they are not focusing on distinguishing themselves in any way.
Percy Martinez, distinguishes himself by adding pictures of previous clients and testimonials. He focuses on highlighting words like ‘personalized’, which speak to a prospective customer.
Finally, he offers free consultations so potential clients can get to know his firm before putting any money down.
Making clients feel heard and safe is especially important when you are selling high-value products like legal services.
Habitual Buying Behavior
Low-involvement purchases with few significant differences between brands. Dollar Shave Club is a great example.
The average person may not see a major difference from one razor to the next, but they appreciate how the subscription model makes it easy to stay stocked on shaving products. This is why in the online business model, subscription-based businesses are seeing a lot of interest in recent times.
For example, I am not one to sign up for a subscription for a product (even one I use frequently) because as a wary buyer who keeps a list of my subscriptions so I don’t forget any, I don’t add to that list easily.
However, when stocking up on my shampoo and conditioner on Kerastase, they gave me an offer that even a wary buyer like myself did not refuse:
If I signed up for their auto-replenish option that sends me products every x number of months, I get 10% off.
This is a good deal for me (I save) and a good deal for them- a better chance of ensuring my loyalty to the brand in an industry that has customers constantly trying new products.
Variety-Seeking Buying Behavior
Low-involvement purchases with significant perceived differences between brands. Companies like Ruffles or Oreo regularly introduce new, often unusual flavors to cater to consumers who enjoy trying new things even though snack foods are a low-involvement purchase.
All of the above examples feature companies that understand how buyers approach their products and how to position them. But how do they get to that point?
Buyer Behavior in Practice
In the introduction, we described buyer behavior in the most literal of terms: How consumers act when they are making a purchase.
What does it look like in action?
Meet Lucy. Lucy is 19 years old. She works at the Build-a-Bear Workshop in her local mall. Long hours at pay that, by her estimation, falls into the “non-competitive” category.
Most of the time, she is price-conscious. She buys from the cheap grocery store. Has deleted the Amazon app from her phone. Having it there has led to far too many impulse purchases. And she’s the only teenager she knows with a Target Red Card. You can’t beat 5% back.
Lucy’s one indulgence is her phone. Still, with limited capital, she knows she needs to shop smart.
When it is time for an upgrade, she does her due diligence. Compares brands. Reads reviews. Contemplates the pros and cons of shopping for a later model over the newest units.
Finally, she arrives at the Apple Store, fully confident in her decision.
From Lucy, a marketer might learn:
- The value of content. She did a lot of research. Who put the information she found out there? What does it take to become a trusted source of information for consumers? How can brands use content creation and search engine optimization to generate leads?
- The power of differentiation. Some consumers probably buy their smartphones based on what their service provider has on sale. Lucy isn’t one of them. She did a deep dive into product comparisons. If she is going to spend her hard-earned money, it won’t be half-hazard. The product has to be distinct enough to justify the expense.
- The flexible nature of the “customer base.” Minimum-wage workers like Lucy are not immediately who we think about when considering consumers in the market for four-figure luxury purchases. Obviously, cell phones have long been an exception. Still, in a world where people are increasingly gravitating toward luxury merchandise as a form of self-expression this point bears consideration. What criteria qualify a person to be considered part of a “customer base”?
Granted, a marketing department may not reconfigure its approach based on Lucy. However, if they see these patterns repeat it will make a big difference in how they do their work.
They may invest more heavily in content creation to guide and direct buyers.
They may spend more time emphasizing the difference between their product and the next. They may even emphasize lifestyle over status when positioning their high-end product lines.
In any case, they will:
- Strive to understand the consumer mindset, and
- Reflect that mindset in how they position products.
Always with the goal of getting more “Lucys” to buy their phones.
Practical Applications:
Consider Nike.
Their slogan—Just-Do-It—quickly introduces the company’s branding approach. They appeal actively to athletes who want to push themselves. They facilitate these connections through social features, such as the Nike Run Club and training apps. They tap into a powerful network of influencers who embody the power of persistence and hard work.
Their partnership with Michael Jordan—in addition to generating billions of dollars—was influential enough to warrant a film adaptation starring Matt Damon.
Through these efforts, they sell $200 pairs of shoes to ordinary people.
Consumers who think the way Nike does, and are willing to spend more than they need to because of that alignment.
But branding isn’t the only way to tap into buyer behavior. Amazon does it by leveraging data-driven insights in a way that no other company on the planet could match.
Using advanced algorithms they have managed to automate and scale personalization in a way that effortlessly facilitates cross-sales and repeat business.
Through “personalized,” recommendations based on other buyers’ behavior Amazon constantly introduces the experience of discovery to every shopping experience.
Through unique recommendations, product pairings, and the always enticing “free shipping when you spend $35 or more,” they increase revenue not by appealing to their customer’s identities, but by reflecting the way they shop. No one identifies with Amazon. They use it because it is convenient and often cheaper than the alternative options.
Future Trends in Buyer Behavior
Tomorrow’s buyer behavior is being shaped by today’s circumstances. Evolving technology, sure.
AI and machine learning are rapidly changing how people source and receive information.
As algorithms improve, people may require less research than before to make big buying decisions.
At least as influential is consumer motivation. What do people care about? What qualities beyond mere price weigh into their choices?
Sustainability is an increasingly important factor. Brands focus now more than ever on developing (highly visible) eco-friendly campaigns.
Think IKEA going carbon neutral. Or maybe best of all, Patagonia’s “Don’t Buy This Jacket,” campaign.
In 2011, Patagonia published a full-page ad with a large image of its best-selling jacket plastered front and center. The headline was “Don’t Buy This Jacket.”
Here’s a surprising twist M. Night Shyamalan might want to keep in the back of his mind: Patagonia is a for-profit brand. They want—need—people to buy their jackets.
They also want—and need—to be consistent. A brand that is built around the idea of sustainability can’t encourage rampant consumerism. So what do they do? They develop a campaign encouraging people to reuse and repair their old things.
They even publish resources on how to do it.
Consequently, they indear themselves to their base, generate web traffic, and ultimately create a campaign that is still compelling twelve years later. We’re talking about it, right?
In one move they:
- Differentiated themselves clearly
- Showed consumers that they understood their values, and
- Generated impressive publicity.
Consumers are motivated now more than ever by their values. AI and algorithms are great, but brands still need to be able to connect with their buyers fundamentally.
Also, they need to understand:
Omnichannel Shopping
Omnichannel shopping is an enormously influential factor in the world of modern buyer behavior.
Basically, it means that people are using multiple avenues of commerce to make buying choices.
They may research a product online and then buy it in person, or they may see an item at the store and then order when going through an email they receive from the company newsletter (this is why it is so important to invest in a good email automation software and begin building your own email list).
Lucy, from our earlier example, did exactly this.
Modern marketers understand this aspect of buyer behavior and try to use it advantageously. For example, Sephora and other cosmetic manufacturers implement “try-on” features in their applications.
Consumers can apply virtual makeup shades in a phone application. This lets the buyer see how they will look with makeup online before potentially transitioning into an offline purchase. Of course, the purchase doesn’t have to be offline.
While cosmetics continue to be regularly purchased in person, the same app that lets you try on shades is also an e-commerce platform. Clever, right?
If you are at a Sephora store, you can scan a generated QR code that lies on the table next to all the products you are considering, and it takes you straight to their app where you can virtually try on the makeup.
So you are physically in the store with the ability to try on the product both virtually and physically.
This is great strategy for a makeup brand that might not have the exact shade someone is looking for. Instead of that person giving up and walking out, they could try on the product virtually while also evaluating the look and feel of the product in-store.
It is combining the best of both worlds (virtual and physical) to give potential customers everything they need to evaluate the product.
Modern buyer behavior requires marketers to fully examine the complex, winding process consumers take when making a purchase.
Conclusion
Buyer behavior isn’t one thing. It could be how the consumer sees themselves in relation to the product. Nike and its achievement-based branding. Patagonia and its carefully nurtured values. It could be a clever implementation of how customers shop.
Amazon with its helpful algorithms and stealthy cross-sells. Even everyday retail stores tap into buyer behavior. Have you ever wondered why candy bars are placed at a child’s eye level in the checkout line? Why milk, eggs, and other staples are always in the back of the store so that you have to pass thousands of other items to get to them?
These are simple but effective utilizations of buyer behavior. A pleading child will sometimes talk their parent into an impulse-buy candy bar. A shopper who only came for eggs will often find something else they need on their way to the refrigerated section. And who hasn’t spent a little more than they intended to cash in on free shipping?
To use buyer behavior is to understand your customer. What motivates them- What they want- How they will act as they try to get it?
When used effectively, buyer behavior can help increase revenue while treating your customers to a genuinely better experience.
As you leverage buyer behavior insights into your marketing strategy, it is important to look at your entire sales process. How can you make the experience easier for customers?
freya@collectingcents.com (if you are using Gravatar)
Author: Freya Laskowski
Freya Laskowski is the founder and CEO of SERPManiac, an agency focused on helping brands scale their organic growth with content marketing and SEO services.
She is a quoted contributor in online publications like Business Insider, Fox Business, Yahoo Finance, and the Huffington Post. She also owns CollectingCents– a personal finance blog that she grew from the ground up.
