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Customer Behavioral Model - Know Everything

Posted by Sunny Morgan
Customer Behavioral Model - Improving Business Narrative

Consumer behavior models are essential tools for comprehending the how, when, and why of customers' purchasing patterns. By utilizing these models in your customer acquisition efforts, you can accurately anticipate which customers will be interested in your product and effectively target them.

  • Despite their sounding intricate, consumer behavior models are simple ways to generate a narrative about buyer behavior that can help you enhance the customer experience. Your customer’s narrative is only good as it's substantially impactful.
  • Buyer behavior pertains to an individual's purchasing habits influenced by various factors such as background, education, personal beliefs, goals, needs, desires, and more. Learning these factors is imperative for devising marketing strategies.
  • Businesses attempt to understand buyer behavior by performing customer behavior analysis that involves qualitative and quantitative analysis of a target market.
  • However, knowing a customer's preferred sock brand is insufficient if it does not elucidate why they chose that particular brand.

That's where consumer behavior models come into play. They provide a framework to contextualize the findings of customer behavior analysis studies and help call center services comprehend the underlying reasons behind purchasing decisions. There are different narratives based on experts’ abilities to comprehend customers’ psychology.

Definition: A Customer Behavioral Model is a tool that businesses use to understand how and why their customers make purchasing decisions. It is a framework that helps to explain the different factors that influence customer behavior, such as their needs, preferences, motivations, and values.

By analyzing customer behavior, businesses can better understand their customers' needs and preferences and tailor their marketing and sales strategies accordingly.

Possibilities of Wrong Judgement of Customers' Personas

Yes, it is possible to be wrong about your target customers. Despite conducting extensive research and analysis, businesses may sometimes make incorrect assumptions about their target customers. This can happen due to a variety of reasons such as insufficient data, flawed research methods, inaccurate interpretation of data, or changes in the market or consumer behavior.

For instance, an outbound call center service may assume that its target customers are mostly middle-aged women interested in fashion, but in reality, their products may appeal more to younger women or men. In such cases, it is important for call centers to re-evaluate their assumptions and adjust their marketing strategies accordingly. Being a brand owner you must vary of judgemental blunders that can cause delays or stunt business growth.

Therefore, it is crucial for outsourced call center services to regularly review and update their understanding of their target customers to ensure that they are effectively meeting their needs and preferences. The healthy way of running marketing campaigns is to check out innovative ways to engage customers and look for the flaws, irregularities, or limitations of the current marketing strategy.

Types of Customer Behavioral Models

Once you get deep into the concepts of customer behavioral models, you will notice some fundamental types of customer behavioral models that businesses can use to understand their customer's buying behavior. First, you need to learn these common types before getting into more complex ones. Here are some common types of customer behavioral models:

Economic Models: These models focus on how customers make purchasing decisions based on factors such as price, income, and availability of goods and services.

Psychological Models: These models focus on the psychological and emotional factors that influence customers' purchasing decisions, such as personality, motivation, attitudes, and perceptions. This model plays a central role in customer evaluation.

Social Models: These models focus on how customers' social networks and social interactions affect their purchasing decisions, such as the influence of family, friends, and social media. The social model plays quite an influential factor in purchasing behavior.

Cultural Models: These models focus on how customers' cultural background and values influence their purchasing decisions, such as their beliefs, customs, and traditions. The existing ecosystem is getting diversified under the cultural influence a lot.

Hybrid Models: These models combine two or more of the above models to create a more comprehensive understanding of customers' purchasing behavior. Hybrid models can get a lot more intricate based on the person’s understanding of different models of customers.

Each of these models has its own strengths and weaknesses, and businesses can use them in combination to create a more complete picture of their customer's buying behavior. Well, these were only little briefings about the common types. We also call them traditional customer behavioral models. We will study them in detail in the further sections of this blog.

Traditional Customer Behavioral Model

The traditional customer behavioral model is a theoretical framework that has been widely used in marketing and consumer research for decades. The model, also known as the Stimulus-Response Model, suggests that a customer's buying behavior is determined by a sequence of events that begins with a marketing stimulus, such as an advertisement or a promotion, and ends with the customer's response, such as a purchase or a decision not to buy. According to this model, the buying decision is influenced by four key factors:

  • Environmental Factors - such as the customer's cultural background, social class, and physical surroundings.
  • Individual Factors - such as the customer's motivation, perception, learning, and personality.
  • Marketing Mix Factors - such as product, price, promotion, and place.
  • Decision-Making Factors - such as the customer's attitude, beliefs, and intentions.

The traditional customer behavioral model assumes that customers are rational decision-makers who weigh the costs and benefits of a product before making a purchase.

However, this model has been criticized for oversimplifying the complex nature of customer behavior and for failing to account for emotional and psychological factors that may influence a customer's decision-making process.

As a result, more modern and comprehensive customer behavioral models have been developed to better reflect the reality of consumer behavior. Let us dive into the 4 main customer behavioral models mentioned below:

  1. Learning Model
  2. Psychoanalytical Model
  3. Sociological Model
  4. Economic Model

Learning Model

According to the Learning Model of customer behavior, purchasing decisions are motivated by the desire to fulfill both basic needs required for survival, such as food, and learned needs that arise from personal experiences, like fear or guilt.

  • The model's hierarchy places basic needs at the bottom and ascending levels for learned needs, or secondary desires, that enable consumers to achieve self-fulfillment.
  • Consumers tend to satisfy their basic needs before turning to fulfil learned needs. For instance, a hungry shopper would prioritize their need for food over their desire for fashionable clothes.
  • If you're a multi-purpose business that provides products that fulfill different levels of customer needs, this model is relevant to you.
  • For instance, Target is a U.S.-based department store that sells a broad range of products, including groceries.
  • In Super Target, which is a larger version of the chain, customers initially encounter products that satisfy their fundamental needs in the grocery section.
  • They may first see nutritious produce before moving to other aisles that cater to learned needs, such as cookies, clothes, or beauty accessories.
  • To enhance the customer experience and align with their buying behavior, a business with a vast array of in-store options can lead customers to products that satisfy their innate needs first.

This approach can make them feel more at ease and spend more time browsing other products and making additional purchases. Once customers are comfortable, they can proceed to fulfill the desires that bring them joy rather than just help them survive.

Psychoanalytical Model

The psychoanalytical model, which draws from Sigmund Freud's theories, posits that individual consumers have both conscious and unconscious motives that influence their purchasing decisions. Customers may be driven by hidden fears, suppressed desires, or personal longings.

As a result, businesses need to understand how their marketing stimuli, such as Instagram ads, appeal to these desires, even if the customers themselves may not be aware of them. This model is particularly relevant to businesses that sell products or services associated with a certain image, such as glasses as a symbol of intelligence.

To appeal to these desires, businesses can create ad campaigns that showcase their products being used in educational or intellectual settings.

Sociological Model

According to the Sociological Model of consumer behavior, individuals' purchasing decisions are influenced by their membership in various societal groups, including family, friends, and work colleagues, as well as more loosely defined groups like Millennials or yoga enthusiasts.

  • Essentially, people tend to buy products that align with the expectations and norms of the groups they belong to.
  • For instance, executives in the C-Suite are expected to dress professionally and formally, so they are likely to make purchases that reflect this image, such as formal business attire.
  • This model is applicable to most businesses, particularly those that cater to specific groups of consumers. To effectively use the Sociological Model, companies should create experiences that resonate with the typical behavior of these groups.

“For example, a brand that sells exercise equipment should target consumers who enjoy working out by offering products that fulfill their desires, such as equipment that enhances performance or insulated water bottles that keep them refreshed during breaks.”

  • By doing so, the brand can connect with these consumers and demonstrate how their products can help them maintain their position within the group.

Nike's advertisement for a running shoe is an excellent example of how this model can be applied. The ad targets a broad group of people who enjoy running and promises that the shoe will enhance their speed and help them fit in with the group.

Economic Model

The economic model of consumer behavior is the simplest among traditional models, as it asserts that consumers aim to satisfy their needs while spending the least amount of resources, such as money.

  • Call center outsourcing agencies and companies can anticipate sales by analyzing their customers' income and their products' prices. Companies offering the lowest-priced product may assume that they will generate a consistent level of profit.
  • However, the economic model has limitations, as buyers may have other motivations for purchasing a product beyond the price and personal resources.
  • One example is a prescription medicine in the U.S. healthcare industry, where the cost of medication may surpass the buyer's available resources, yet they must find a way to obtain it to meet their needs.
  • In such cases, personal income and price do not influence the buying decision; instead, need becomes the primary factor.

Therefore, while the economic model is easy to comprehend, it fails to capture the complexities of certain purchasing decisions, such as those that involve essential products like medication.

Wrapping Up:

Creating buyer personas can uncover valuable insights into how your customers approach buying your products or services. By understanding their purchasing behavior, you can tailor your marketing strategy accordingly.

For instance, if customers are more likely to be influenced by deals, the Hawkins Stern Impulse Buying Model should be taken into account. On the other hand, if customers are highly influenced by social groups, the Sociological Model can be useful.

Ultimately, by paying attention to your customer's behavior and preferences, you can create personalized experiences that meet their specific needs and leave them feeling content with their purchase. This customer-centric approach will inform your strategy and help you build lasting relationships with your customers.

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