Decoding Consumer Purchasing Behavior: A Guide for Marketers

Consumer purchasing behavior is a complex and fascinating field that impacts businesses of all sizes.

Understanding why customers make the choices they do can be the difference between a thriving enterprise and one that struggles to stay afloat.

As marketers, small business owners, and entrepreneurs, we're constantly trying to decode the intricate patterns that drive consumer decisions.

Did you know that the average UK adult makes 122 informed decisions every day ?

Many of these choices revolve around purchasing.

Understanding the factors that influence these decisions is crucial for any business looking to thrive in today's competitive marketplace.

This includes understanding how purchase decisions are made, how brand perception influences choices, and how factors like income level and living conditions play a role.

The goal of this article is not to provide an exhaustive literature review on consumer behavior, but to give marketing practitioners a broad overview of the topic, as well as a starting point for further research.

The 5 Stages of Buying Decision

Think about the last time you bought something. A new phone, maybe? It probably felt pretty straightforward, right? But in reality, behind every purchase – big or small – there’s a whole thought process going on. Marketers call this the “buyer decision journey”, and it usually looks something like this

1. Problem Recognition: This is where it all starts. You realise you needsomething. Your old phone is on its last legs, or you're craving barista-quality coffee at home.

2. Information Search: Now you know what you need, you start looking for solutions. You might ask friends for recommendations, read online reviews, or compare different models.

3. Evaluation of Alternatives: You've got a few options, but which one's right for you? This is where you weigh up the pros and cons, thinking about price, features, and your own needs.

4. Purchase Decision: Decision made! You're ready to buy. This could mean clicking "add to basket" online, or handing your cash to the cashier.

5. Post-Purchase Behaviour: So you've got your shiny new product. But the process isn't over yet. Now you're thinking about whether you made the right choice. Are you happy with your purchase? Would you recommend it to others?

Understanding these stages is the first step. But as we will see in this article, there are many internal and external factors that will impact each stage of the process.

The Evolving Landscape of Consumer Purchasing Behavior

Consumer behavior is constantly shifting, influenced by technological advancements, societal changes, and economic factors among others. Businesses must keep up with these trends to remain relevant and appealing to their target audience.

The Rise of Digital Influence

In recent years, there has been a significant shift toward digital platforms influencing consumer purchasing behavior. Social media, in particular, has become a powerful tool for shaping buying decisions and provides valuable insights into consumer behaviour. For instance, Starbucks' Tweet-a-Coffee campaign generated an impressive $180,000 in gift-card revenue in just its first month .

This showcases the potential of social media to drive sales and engage customers in innovative ways. It's not merely about broadcasting messages but fostering meaningful interactions and gathering data to understand what resonates with your audience. Leveraging social media effectively, is one way businesses can influence consumer choices and shape their brand image.

The Power of Personalization

Today's consumers expect personalized experiences. They want to feel understood and catered to on an individual level.

This customer expectation, influenced by the digital transformation , has led to the rise of data-driven marketing strategies that leverage consumer insights to create tailored experiences.

Statista's Consumer Insights reports that businesses are increasingly investing in consumer data analytics. The goal is to gain a deeper understanding of their customers' preferences and behaviors. This data-driven approach allows companies to craft more effective marketing strategies and product offerings that are in line with today's customer expectations.

For marketers, it's important to be aware of the impact new technologies have on customers' expectations and behaviors. But it's also important to understand what factors shapes those decisions.

Environmental Factors Influencing Consumer Purchasing Behavior

Understanding the various elements that shape consumer decisions is crucial for developing effective marketing strategies. Let's explore some of the most significant factors:

Demographic

You can't get inside your customers' heads. But demographic factors give you a good start. Understanding your customers' age, gender, income, education, occupation, and family structure is important because it often directly impacts their buying decisions.

Think about it. A 20-year-old student won't have the same needs or budget as a 50-year-old executive. The student might be all about affordable trends, while the executive could be more interested in luxury and quality.

Family structure also plays a huge role. A single person makes different purchasing decisions than a parent with a whole house to run. For example, parents often prioritise their children's needs over their own. For instance, research shows that women make 70% to 80% of consumer purchasing decisions in many households .

Understanding the specific needs and preferences of different demographic groups can help businesses create more effective marketing campaigns. Thus tailoring marketing messages and product offerings to resonate with the unique characteristics of each demographic segment is important, although it's usually not sufficient.

Family Dynamics

It's not just adults making the decisions. A study by Marketing Charts found that 87% of parents surveyed said their purchasing decisions are influenced by their children . This is especially true for products like toys, clothing, and food.

This highlights the importance of considering family dynamics in marketing strategies, especially for products that may appeal to multiple family members.

Understanding the influence of children on purchasing decisions can help businesses develop marketing campaigns that resonate with both parents and their children. For example, McDonald's has successfully targeted children with their Happy Meals, which include toys and other child-friendly items.

Prescribers

But it's not only within families that we see third party influence. Think about the last time you bought something new - a coffee machine, maybe, or a new pair of shoes. Did you spend countless hours researching online? Or maybe you asked a friend for a recommendation. There are many ways in which we are influenced and by others when we make decisions, even if we don't realise it.

We call these influencers "prescribers ." They can be anyone: friends, family, experts, or even that stranger with twenty thousand five-star reviews. Prescribers carry a lot of weight in consumer purchasing decisions because we trust them. We believe they have more knowledge or experience than us.

As marketers, we need to understand the power of prescribers and create targeted marketing activities.

Payment Methods and Spending Behavior

The way consumers pay for goods can significantly impact their spending habits. This is particularly true with online shopping. A study in the Journal of Retailing and Consumer Services noted that payment methods like debit and credit cards can lead to increased consumer spending . This is because using cards can make it feel less "real" than paying with cash.

Furthermore, a 2018 study by IPSOS found that consumers are 54% more likely to buy when a business accepts payment via an internet account, such as PayPal. This is because online payment methods are often more convenient and secure than traditional methods.

Payment, or "conversion," as it's called in online shopping, is a critical decision point in the customer's conversion path. This article by Stripe offers 11 ways to increase the conversion rate.

Psychological Factors Behind Consumer Choices

Consumer purchasing behavior isn't just about external factors; it's deeply rooted in psychology. Understanding the mental processes and how emotions drive consumer decisions can help businesses create more effective marketing strategies.

The Power of Social Proof

Humans are inherently social creatures, and we often look to others to guide our decisions. This phenomenon, known as social proof, can be a powerful tool in influencing consumer behavior.

For example, vitamin manufacturer Nature Made tapped into consumers' " expert certification " when crafting a campaign for its gummy vitamins, showcasing how social proof can sway individual choices.

Other ways businesses can leverage this psychological factor is by showcasing positive customer reviews and testimonials, highlighting industry awards and recognitions, and partnering with influencers to reach a wider audience. By demonstrating that others trust and recommend their brand, businesses can increase consumer confidence and encourage purchases.

The Scarcity Principle

The fear of missing out (FOMO) is a potent psychological trigger in consumer behavior as we have discussed in the article on emotion's in marketing . Many brands have successfully leveraged this by creating artificial scarcity, with limited-release to drive sales (Nike, Starbucks, Nintendo).

The principle of scarcity is widely used in online shopping, culminating with Black Friday and Cyber Monday offers!

This strategy creates a sense of exclusivity and urgency, prompting consumers to make quicker purchasing decisions. This can be especially effective for products that are in high demand or considered collectible items.

Cultural Influences on Consumer Purchasing Behavior

Culture plays a significant role in shaping consumer preferences and behaviors. As businesses expand globally, understanding these cultural nuances becomes increasingly important. This includes being aware of cultural differences in values, beliefs, and customs. For example, in some cultures, it is considered rude to refuse a gift, while in others, it is seen as a sign of respect.

Collectivist vs Individualist Cultures

Different cultures have varying attitudes towards consumption. For example, in countries like China and Japan, people are more inclined to make purchases that improve the welfare of a group, such as their family.

This collectivist mindset contrasts with the more individualistic approach often seen in Western countries. Understanding these cultural differences can help businesses tailor their marketing messages and product offerings accordingly.

Cultural background

Think about the way you buy coffee. Do your friends buy the same brand? Do they even drink coffee? Our cultural background plays a big part in our everyday decisions. Marketers know this. They try to connect their products with shared values and lifestyles.

But, culture isn't just about where we're from. It's also about the groups we belong to. For example, think about "sneakerheads". This group has a shared passion for sneakers, and his passion influences their buying choices in a big way. In his book "For the Culture", Marcus Collins goes much deeper into the subject and explains how culture influences our choices .

Understanding the cultural influences on consumer purchasing behavior helps businesses target their marketing more effectively.

How Technology can help us Understand Consumer Behavior

Advancements in technology have provided businesses with powerful tools to gain insights into consumer purchasing patterns. Let's explore some of these innovative approaches:

Big Data and Predictive Analytics

Big data analytics, powered by artificial intelligence, allows businesses to process vast amounts of consumer information to identify patterns to predict future behavior. This information can come from a variety of sources, including website traffic, social media activity, and purchase history.

This can help marketers craft hyper-targeted advertising campaigns designed to resonate with their consumer base. By analysing past behavior, businesses can anticipate future needs and preferences, allowing them to deliver more relevant and personalized experiences.

AI and Machine Learning

Artificial Intelligence (AI) and machine learning algorithms can analyze consumer behavior in real-time, allowing businesses to personalize their offerings instantly. This technology can be used to recommend products, personalize content, and provide customer support.

For instance, HubSpot uses AI to help businesses automate their marketing efforts and provide personalized experiences to their customers. By automating these processes, businesses can free up time and resources to focus on other areas of their business.

Conclusion

Understanding consumer purchasing behavior is not just about predicting what customers will buy; it's about understanding the multiple factors that influence their decisions. From psychological triggers to cultural influences, from technological advancements to demographic shifts, consumer behavior is a multifaceted field that requires constant study and adaptation.

As marketers, small business owners, and entrepreneurs, we must stay attuned to these evolving patterns. With the rise of artificial intelligence, it's getting easier for smaller companies to leverage data, embrace technology, and thus maintain a deep understanding of our target audience. By creating more precise buyer persona, we can create more effective marketing strategies, develop products that truly resonate with consumers, and ultimately drive business growth.

Remember, consumer purchasing behavior is not static. It's a dynamic field that continues to evolve with societal changes, technological advancements, and global events. Stay curious, keep learning, and always be ready to adapt your strategies to meet the changing needs and preferences of your consumers.If you need help uncovering you customer journey and the decision points to increase your online conversion, book a free consultation call and let's see how we can help you.

FAQs 

Sources

1.  A Brief Literature Review on Consumer Buying Behaviour
2. Munthiu, M.-C. (2009) 'The buying decision process and types of buying decision behaviour', Sibiu Alma Mater University Journals. Series A. Economic Sciences, 2(4), pp. 27-33
3. Boden, J., Maier, E. and Wilken, R. (2020) 'The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay', Journal of Retailing and Consumer Services, 52, p. 101910. Available at: https://doi.org/10.1016/j.jretconser.2019.101910