Consumer behavior plays a huge role in the success of any brand, but many brands have no idea how to leverage consumer behavior into business strategy and action. Consumers play a critical role in defining a brand. They buy what they like, where they are, their friends, what websites they visit, and much more. This article will help you understand the importance of consumer behavior in building successful businesses and provide six reasons why your brand should care about consumer behavior.
- Filling the Market Gap
Consumer behavior enables a brand to identify when it has a “market gap” and fill it with products that meet consumers’ needs for value. Market gaps exist between different types of customers or between different customer populations. For example, there is a market gap between women who wear designer labels and want the latest style of fashion and women who don’t care so much about fashion trends and want functional everyday clothes. This market gap can be filled by offering lower-priced apparel than those typically associated with luxury brands. In addition, a gap in product features may also exist between people who have the money to purchase an expensive item like a car versus someone who doesn’t. A great company could target this market gap through its advertising by making sure it communicates messages that resonate across all market segments.
- Building Loyalty
Loyalty comes from engaging customers in ways that match the way they think. Companies should develop loyalty programs designed around a three-step process – recognition, rewards, and share. Recognition helps build an emotional connection with your customers. Rewards build awareness and trust. Share gives customers permission to interact with your business online. By using these steps and data analytics, companies can build loyal customers. If the brand finds out which elements engage customers and keeps them coming back, they should focus on those activities and create new ones.
- Staying True to What You Stand For
A great brand stands for something. It tells us what kind of people we are and what we stand for. When companies try to appeal to everyone, they lose sight of those values because some demographic group does not feel represented. A company needs to have a strong point of view if it wants to stay true to itself. Customer research provides valuable insight into what motivates customers at various stages of engagement. This information can then position the brand as the go-to option among competing options.
- Creating Real Value for Customers
People choose brands based upon the perceived value provided. A company can communicate to customers whether it delivers on its promises. To do this effectively, companies must know how to identify and measure the right metrics for evaluating how well their product fulfills promised benefits. These metrics include product quality, performance, service, price, customer experience, etc. The goal here is to find ways to deliver real value (instead of just making promises). Then, make sure that you evaluate how each metric affects sales, profits, or growth (the three core measures that drive business objectives) before deciding whether to adjust.
- Differentiation and Persuasion
Brands often spend most of their marketing budget trying to get noticed while not providing enough attention to understanding consumer behavior. Most people in the marketing department would agree that it takes more than dollars spent to create meaningful differentiation in a category. So many marketers treat perception like a competition where the best ad wins the prize. But, successful brands are far better at persuasion than simply being clever. They can convince consumers to buy rather than attract them and keep them returning. Consumers use past behaviors to judge future decisions, making behavioral analysis a key aspect of brand strategy.
- Focusing on the Right Goals
Brands usually start working on their goals too late or never start. Marketing managers spend lots of time setting lofty goals like driving up revenue, building customer lists, and increasing market shares. Yet, these vague generalizations do little to help a company achieve its goals. Instead, businesses should determine what specific outcomes they want from their efforts. Then, align their strategic plan with actual results by measuring progress against defined benchmarks. It’s only when marketers understand exactly how their actions impact their ultimate goal that they will be able to improve their processes.