You’ve probably heard it before that, as an entrepreneur, you need to understand the needs of your consumers. This is something that’s taught in all business classes, which further emphasizes its importance. Every company depends on its customers for success, hence, why their demands should always take precedence over other projects.
So, how will you ensure that you always meet these demands? Well, that’s where customer behavior comes into play. What are the current consumer needs and trends? Are there related items that these people might want to buy in the future? Getting answers to some of these questions will help you plan for the future.
This article aims to guide you through the most important steps in customer behavior analysis. Read on to find out more.
Segment Your Customers
It’s worth noting that customer behavior is not a description of who’s buying, but, rather, how they’re buying at your store. However, one’s personality may still have an impact on how and what they purchase. Therefore, your first task in assessing your consumers is to find out a few facts regarding their background that might have a direct influence on their buying process.
One’s upbringing and the environment within which they’re brought up may instill certain beliefs in them. Also, their gender, age, location, and other demographic traits will greatly affect their behavior as customers. Once you have these characteristics in place, you’ll need to categorize all your clients into specific groups.
Now, analyze some of the main factors, such as their buying frequency, purchase value, and lifespan. Of course, there are several methods and software applications designed to help you in such cases. If you’re a website owner, you might want to try tools like Hotjar. So, what is Hotjar used for? Well, it comes in handy when you want to learn how visitors engage with your site. The importance of this analysis is to find out your loyal consumers or audience and adjust your strategies accordingly.
What Are The Benefits Of Each Group?
Every customer has a unique benefit that they offer to your business. Consumers have their reasons for choosing to do business with your company. However, if you don’t meet their needs, they’ll go ahead and look for a replacement. Therefore, it’s important that you meet customer demands; otherwise, your competitors will do the job. You can up your game by finding out the benefit of each client, which is the second step in your customer behavior analysis process.
So, how do you do this? First, you ought to look beyond the product and service you offer to the consumers. Analyze any possible external influence that might have led the customer to your store. For instance, was the purchase made after a conscious decision, or did it come out of convenience? The answer hell will show you whether or not the persona in question is a potential long-term customer.
Another factor to consider in the analysis is the urgency of the purchase and consumer buying power. Having a good idea of where your business stands in the minds of your customers is a great way of determining where to make improvements and gain more. It also shows you which group (based on demography) most of your loyal consumers fall into.
Collect Quantifiable Information
While trying to understand your customer, it’s important to also take real numbers into consideration. In the first two steps, the focus was on unquantifiable (qualitative) data, like customer persona and their satisfaction. However, with this information, all you can do is speculate on customer’s experience rather than make decisions based on tangible results. Quantifiable information, on the one hand, helps you understand your consumers better and acts as a logical proof for qualitative data.
So, where will you get the statistics to make your calculations and overall analysis? Here are the two main sources of quantifiable information for customer behavior analysis:
- Internal Stats
As you might have guessed, one of the sources is your company database. You can pull some statistics related to customer behavior, such as social media insights (likes and comments) and blog subscriptions. Most companies have digitized their operations in this day and age; therefore, this data should be quite easy to find from your online interactions.
If that doesn’t help, you can also utilize product usage reports. This data will give you a clear insight of what people really think about your products and services. For instance, if you have an online store, you can go through product ratings and comments from the users. Generally, there are a lot of stats you can pull from within the business. It’s up to you to choose the ones that will give the most accurate results.
- Secondary Agencies
There are a lot of governmental and non-governmental organizations that have specialized in collecting consumer behavior statistics. For instance, your government’s census bureau may include economic and social statistics of each group based on gender, age, or any other population structures. Find and use the information that’s relevant to your analysis.
Combine the data collected through these two and other available channels, and do your calculations. This will give you a broad scope of data to use when doing your analysis and will help you make an informed decision, rather than doing so out of mere speculations.
Relate Your Results From The Previous Steps
The final step in customer behavior analysis involves relating all the results from the steps discussed above. How do the qualitative and quantitative data compare? For instance, if the qualitative data show that most visitors to your website are the youth, do the quantitative statistics support the same? Look for any recurring trends, barriers, and notable lifecycle phases. By doing this analysis and comparing it with customer experience, you’ll develop a better understanding of your customers.
Consumer behavior analysis is a great technique for business to understand customer demands. If you’re planning to begin your study, the first step is to segment your consumer base using demographic factors, such as age and gender. Assess each group and be sure to collect quantifiable information to strengthen your data analysis process. Once you’ve followed this guide to the letter, you can apply the results of your analysis in the next campaigns and see whether the changes are effective.