Whether your customers are consumers or other businesses, understanding their buying behaviour is one of the important aspects needed for small business marketing success.
Especially in today’s competitive world.
Unless you understand their buyer behaviour is is very hard to gain them as customers and keep them loyal.
Increasingly smart businesses are realising the power of being specialists in their market.
Customers base their buying decisions on both rational and emotional reasons.
Usually customers will look at a category on a rationale basis, eg wanting an accountants’ tax service. They then decide, especially for repeat customers on the brand, eg Apex Tax Accountants on an emotional basis.
To get your customers to have an emotional attachment to your brand is one of the keys to keeping them loyal. As well it is one of the key factors in gaining referrals and recommendations.
Gaining a better understanding of your customers’ buying behaviour and is based on knowing the following:
What Are Their Reasons For Buying?
You need to have a clear understanding both the rational reasons and importantly the emotional reasons customers buy. Taking the example above customers may have a tax problem and need advice.
So their pain is pretty acute. So they will be looking for a business to provide peace of mind, help them to stop worrying, to take care of them and sort out the problem. These emotional reasons will be a far bigger driver than price in their buyer decision process.
How Often Do They Buy?
Understanding this can help you with the timing of your marketing tactics. For example if they buy every two months then if you use email marketing you can make sure those on your list get offers at this time.
Knowing how often they buy can also be used when deciding what type of product or service you market as well as the price.
Are They Buying For Others?
Sometimes customer buy on behalf of others. A classic example is mothers buying for their children. The ones that use or consume your products or services can have a big influence on the buyer so you need to make sure you consider both in your marketing.
What Do They Buy?
If you have a range of products and services it is a good idea to understanding which particular products or services they buy on a regular basis. By having this understanding you can make strategic decisions such as whether you keep the whole range, focus on one or two key products or services only.
Where Do they Like to Buy?
Today there are many channels available for customers. Increasingly customers are buying directly from websites or online stores.
Understanding their preferences allows you to focus on the key channels to increase the opportunities for them to buy from you.
Where Do They Gather Their Information?
Today there are so many sources of information it is helpful to understand where they get the information to help with their buying decisions eg from friends, websites, online reviews.
As many customers will visit your website as part of the decision making process it is so important to ensure your content is rich.
Are They An Exclusive Customer?
In some product or service categories the customer may have a set of three or four brands they choose from and this may give you more information about your competitors.
Increasingly today, those businesses that have a speciality focus will find that they can gain more exclusive customers. The reason is their uniqueness will reduce the direct number of competitors that your customer can choose from.
Excellent article Susan.
One more thing I would like to add to this is to make it easy for customers to buy. I call this the “last mile problem”. Some companies have complex pricing structures that the customer who was about to hand the money over, decides not to buy.
I had written a post about this on my blog
http://productmanagementtips.com/2008/11/25/productmanagement-pricing/
Gopal
Good thoughts about Customers’ Buying Behaviour.Thanks.
Great post. The same thought process is critical in helping companies establish their Routes To Market, setting up the most effective channels to distribute their products!
Susan, thanks for the question. The problem is they don’t. Typically, they approach things from the inside out. Inevitabliy, they don’t build the right channels and go through several fits and starts trying to get it.
It’s so much easier and more effective to start with the customer. What do they buy? Who do they buy from, How do they buy, etc. All the points you raise are equally valid in building the most effective channels.
If you start with the customer and look at the value delivery chain back to your company, you not only have the route to market, but you have defined your “complete product offering” in a very comprehensive way that customers really value.
Whether you are designing a new product, designing marketing program, building a channel, all is easier and more effective when you start from the outside (the customer) and build inward.
Thanks for the great post and for continuing the discussion.
It’s important to know your market and to be able to really relate to them. That’s true on every level from retails salespeople on the floor to the guy who’s writing your ad copy.
Good reminder.
The Importance of Understanding your Customers’ Buying Behaviour…
Whether your customers are consumers or other businesses, understanding their buying behaviour is one of the important aspects needed for small business marketing success. Customers will base their buying decisions on both rational and emotional reason…
Gopal, that is a good point about pricing as often we look at this from a company’s point of view instead of a customers. Why do you think some companies continue to do this, especially these days? I will read your post.
Thanks for your comment Kirin.
Dave, in your experience do many companies go through a process like this? Like many things today there seems to be so many options including distribution channels to choose from.
Dave, I think your last sentence and especially the words “easier” and “effective” sums it up very well.
Thanks for your comment Jake. What is interesting that people know the importance of really understanding your market but don’t always take the steps to put that knowledge into simple action to strengthen relationships.