What Are Consumer Behavior Insights in Marketing 2023?
The behavior of consumers in 2023 in the conditions of economic exchange and their decision-making about the purchase of goods and services depends on many external (characteristics for a specific socio-economic situation) and internal (values, knowledge, experience, lifestyle) factors. Effective marketing decisions cannot be made without taking them into account. Here we’ll talk about what consumer insight is.
Understanding Consumer Insights: An Introduction
The consumer is the central figure in the market. It is the subject of close attention of manufacturing enterprises (sellers). It is not without reason that the consumer is called the “king of the economic system”. Consumer behavior insights have a decisive influence on the marketing success of companies. The task of the latter consists of a careful study of consumers’ buying behavior, studying the factors that influence it, and establishing those economic tools with the help of which can be adjusted and directed in the direction necessary for the company.
The seller must know the decision-making processes of different consumers. Without understanding buying behavior, it is impossible to solve the main issues in marketing activities correctly. In particular, to segment markets, organize product promotion, and implement communication marketing measures.
The market is essential to consumer behavior insights, purchasing power, and propensity to exchange. Based on this, the marketing service needs to investigate the needs of consumers and why they behave in one way or another. The study of end consumers is carried out by examining their behavior patterns. To find out the needs of consumers, it is worth doing a customer feedback analysis.
Features of consumer behavior
Consumer behavior is the actions taken by an individual when buying and using a product or service, it is the mental and social processes that precede these actions or are their consequence.
The main element of consumer behavior in the context of marketing is the process of making a purchase decision by the consumer. In classic cases, it consists of five consecutive steps:
- realizing a need;
- searching for information;
- making a purchase decision;
- making a purchase;
- evaluating the correctness of the purchase.
Benefits and Importance of Consumer Insights
Consumer behavior is a time-stretched process not limited to a single exchange when customers give money and receive some product or service. The exchange process itself expands and can cover up to six parties. At different stages of the exchange process, purchase initiators can be connected — people who influence the purchase, make the final purchase decision, or are directly the buyers or consumers of the product. To know what consumer insight is in the market, marketers need to study all the factors that influence people’s willingness to exchange.
Exchange is an important part of consumer behavior, but the main focus should be on the entire consumption process, which determines consumer behavior before, during, and after purchase.
Marketing tools used to increase sales, market share, etc., will be most effective if you first collect information on the following issues:
- “what” makes it possible to identify the needs for goods or services, to specify them, to define a perceived set of brands, and to offer substitutes;
- “how much” provides quantitative information on the volume of purchases, potential demand, probable volumes of consumption, and creation of stocks;
- “how” highlights different methods of purchase (prepayment, payment on credit, leasing) and different ways of using the product;
- “where” is important for the development of systems and channels for the distribution of products and services, areas of consumption, and storage of goods;
- “when” helps obtain information about situational factors influencing buyers and opportunities during consumption, such as the rhythm and frequency of purchases and the possibility of repeated purchases;
- “who” helps determine the procurement center’s composition and each participant’s role.
The analysis of these questions is useful for organizing the information search process. It contributes to creating a marketing information system that will help influence consumer behavior in the context of economic exchange effectively. Competitor analysis in digital marketing is one of the main components of a digital media strategy. Based on the analysis data, plans for the media activity of the brand are built.
Market Research vs. Consumer Insights
An important component of a successful marketing activity is conducting complex market research. With its help, potential buyers are found, their needs are studied, the real and possible demand for the product is determined, trends in changes in the market situation are determined, and the market’s future development is predicted. Such studies provide information on all conditions and processes affecting goal setting, strategy development, and marketing planning.
Information about the state of the market makes it possible to:
- get competitive advantages;
- determine the opinions and attitudes of consumers;
- coordinate strategy;
- increase trust in advertising;
- reduce commercial risk;
- monitor the external environment;
- evaluate one's activity;
- increase efficiency.
This information will help you quickly adapt your business to the market’s current state. Now it is more important to monitor the market situation than before — the situation changes more often, and many factors have an immediate impact. The market is being rebuilt — the more often you monitor the environment, the more thorough the decisions will be in time.
Understanding consumer needs
A brand should be based on what concerns customers — values and motives, drivers and barriers, current tasks and challenges.
To do this, marketers should take into account changes in the consumption situation, context, and tasks that the brand helps to solve. For example:
- In some niches, buyers begin to go to the cheapest segment and somewhere to the premium segment;
- The product may remain relevant but needs to be communicated differently to the consumer.
In general, brands, if they want to be popular in the market, must have a good sense of the reality in which their customers live.
Given the news context, it is also important to closely monitor consumer sentiment. Somewhere you need to change the tone of communication so as not to provoke negativity, and sometimes you can add space in the ToV (tone of the brand) because the consumer will appreciate the humor with which the business overcomes difficulties. To remain interesting for the consumer, it is necessary to revise the price, product, or communication policy over time. This requires the use of qualitative and quantitative research.
Harnessing Customer Insights for Growth and Customer Retention
Regular customers are the basis of a prosperous business. As long as a business is aimed at attracting new users and careless about existing customers, it is not making a profit in full.
Collecting and analyzing personal information and data about user behavior is important when developing a customer retention strategy. Personalization is a strategic tool for the customer to feel that the brand’s policy is meant only for him in every message.
The benefits of personalization are the following:
- stimulating impulsive purchases;
- increasing income;
- fewer returns;
When customers can directly address the brand and thereby influence any issue within the company structure, they feel responsible for the business’s overall success.
Data collection through marketing research
The marketing research system collects consumer needs, purchasing intentions, and characteristics. It receives information about consumers’ reactions to the company’s strategies by testing products and studying the effectiveness of advertising and sales promotion. When a new product is offered, the marketing research system ensures that it is tested in the market to determine consumers’ reactions to its release on the national market.
Marketing research results are used not only by manufacturing companies but also by trade organizations, the service sector, individuals, etc. This sets certain requirements for forming and filtering marketing data according to the research objectives. Companies with more information about consumers and knowledge of how to use it can develop successful marketing strategies. It also helps develop marketing plans that better target your potential customers. All this ensures the success, stability, and growth of the company.
Using Consumer Insights to Drive Marketing Strategies
Possession of information about the factors influencing consumer behavior and the stages of his decision to purchase a product does not fully resolve the issue of effective sales management. For this, marketing tools to influence purchasing behavior should also be used. They represent a set of levers with the help of which a marketer can guide buyers in the direction of their purchase of goods.
Marketing tools must be considered in light of the factors influencing the purchasing behavior of consumers. As noted earlier, they differ among themselves. However, on the other hand, they are complementary to each other.
A well-thought-out marketing plan allows a business to realize its goals successfully. And based on the reaction of the ideal customer, the company can measure its value. Therefore, it is important to set achievable and measurable development goals, use only verified data when planning, and develop a clear marketing strategy that can always be adapted to changes in consumer needs.
Types of strategies
Marketing research uses a quantitative and qualitative strategy. Strategies can be combined or used individually.
- The quantitative strategy got its name for its focus on quantitative, accurate, and reliable data on many objects. This strategy helps identify patterns and statistically significant relationships. Among the disadvantages: it is difficult to understand the deep motives of individuals with a quantitative strategy.
- Qualitative strategies focus on gathering “quality” data. That is, those that describe the attitude, behavior, value system, motivation, and lifestyle of consumers. The main disadvantages of the qualitative strategy are subjectivism and the impossibility of spreading the results to many people.
Brands constantly study their target audience, collecting data on requests, locations, interests, etc. To protect privacy, most major search engines allow consumers to decide for themselves what information they can and cannot collect.
Getting Started with Consumer Insights
The better the consumer is known, the higher the company’s profitability will be since it will be easier to carry out the market segmentation process. By dividing consumers into homogeneous groups, it is easier for a company to provide a product or service in a more relevant and personalized way.
Steps for conducting consumer analysis
The consumer is the main element of the company’s marketing strategies.
Stages of consumer analysis:
- Define consumers. First, identifying consumers requires sufficient data. The information that needs to be known is consumers’ demographics, social, economic, and psychological conditions. Of course, this data can be obtained by talking to consumers, looking at sales data, and getting information from employees who have contact with them.
- Determine the needs. Secondly, we must not forget that one of the most important elements is identifying the needs of the people the company serves. This way, the company can develop its product, price, communication, and distribution strategy that best suits the target consumer.
- Create consumer profiles. A consumer profile includes several important characteristics for defining our target consumer.
- Carry out the segmentation process. For consumer analysis to be more productive and successful, it is necessary to carry out market segmentation. To do this, you need to have enough data.
Consumer analysis helps find new market opportunities by identifying unmet needs that can lead to new and creative ideas for new products and benefits.
The Role of AI in Consumer Insights
Artificial intelligence determines which users are more likely to cancel your services and also analyzes the main reasons for unsubscribing. This helps marketers and analysts plan future campaigns and use methods to attract customers to stay.
Also, the speed of response to a client’s request is gaining more and more importance, and chatbots are the best help here. To increase e-commerce sales, there must be active interaction with customers on social networks. By using social media platforms to share relevant content and engage with them, you can reach them where they spend their time.
Today, with the active use of artificial intelligence, chatbots can learn through inquiries and problem-solving done with other customers. This is possible due to machine learning.
When using chatbots, you can achieve such goals as:
- ability to communicate 24/7;
- constant customer support;
- reduction of costs for call centers;
- not so frequent involvement of employees to solve simple, frequently repeated issues.
All this leads to reduced costs, which is already a positive point.
In 2023, brands will need to strike a balance between personalization and compliance with privacy laws more than ever. The pandemic has greatly affected consumer behavior, but technological development allows us to adapt to new realities quickly. It is important to develop flexibility and follow the interests of your client.
If you want to get closer to your customers and understand their needs, be sure to include marketing research in your strategic planning. Various research methods and techniques will help you make an important decision, assess market risks and opportunities, and follow trends. Consumer behavior is something that can be studied and influenced. One of the first tasks of any company is the constant study of consumers, their evaluation of the product, motivation for making a decision, and measurement of satisfaction with a purchase or service.