Consumer Behavior and Understanding "Why Customers Buy?"

The psychology of sales refers to a buyer’s behavior in the sales process. Market research enhances a company’s ability to understand and relate to their consumer’s needs (buyer behavior), ultimately creating more exposure to the ideal consumer resulting in more sales.

Understanding customer behavior and reasons someone buys or does not buy a product or services can help improve marketing messaging for a company. Although collecting primary research can offer key data and context around buyer behavior, understand the interworkings of subconscious and conscious thoughts can be the key to unlocking purchases. In market research, combining both the conscious and unconscious drivers to purchase gives an organization a full perspective into the buyer mindset.

Some of the best market research firms are able to do this. They not only supply the primary research through surveys and focus groups but can also add the additional psychological insight to the data to help further explain the buyer journey.

Consumer Behavior and Understanding "Why Customers Buy?"

Buying psychology is made up of many conscious and sub-conscious thoughts. Understand both sizes of this coin is the key to unlocking a successful marketing strategy.

The Psychology of Sales

First, a few aspects of the psychology of sales that are more commonly known and understood are:

The Know, Like and Trust Factor

A consumer is more likely to purchase a product or service when they know, like and trust the company. Pretty simple, right? No surprises there.

Perceived Value

A consumer is more likely to purchase a product or service when they perceive it offers considerable value. For example, think of any infomercial you have seen. “Buy now and receive $50 off." "Buy now and free shipping is included." "Buy now and receive two for the price of one.”

Social Credibility

Humans are social beings by nature, and often seek to learn what others are buying or saying about a product or service before they purchase themselves. This refers to when your friend talks about a new restaurant they loved, and you decide to go grab a bite there yourself. Or, when you are in the market for a new washing machine and you go online to read reviews of different products before you make your decision. It can also refer to the consumer’s decision to purchase from well-established businesses due to the longevity and consistent standards of a product or service.

The psychology of sales and consumer behavior is only a small piece of the overall marketing and sales process. Although the concepts mentioned above are key components, there are also many other valuable insights regarding consumer behavior to consider when implementing a successful sales process at your organization.

Here are five guiding principles, which will help to explain, "Why Customers Buy?":

Principle 1: Chunking

In psychology, the chunking theory was discovered by George Miller and related to short-term memory. Miller found that when people “chunked” bit sized amounts of information it was easier for them to remember the information overall, as a whole.

In marketing, chunking can entice a consumer to buy. A confused mind does not make a decision, and chunking information in bite-sized pieces can guide a consumer to a buying decision.

Chunking can relate to specificity in marketing. Using a series of specific keywords leads to Search Engine Optimization (SEO), enabling a product or service to show-up at the top of results yielded after an internet search. Online stores with multiple products can create categories (chunks) of products in their online stores. The consumer can more easily navigate and find what product or service they are looking for when the vast multitude of products are chunked into smaller categories.

A grocery store or department store also implements chunking to influence the buyer’s behavior in the sales process. When a consumer enters a grocery store, there are aisles categorized by product. You would not find chicken next to salad dressing and pasta next to the oranges. Department stores are also laid out in chunks, such as the men’s department, ladies department, shoe department, or household goods department. Chunking allows the potential buyer to be guided and influenced during the sales process.

Principle 2: The Fear of Loss is Greater than the Desire for Gain

Psychology refers to this concept as loss aversion: people prefer avoiding loss rather than acquiring an equivalent gain. Simply stated, one would prefer to not lose $20 than to find $20 on the sidewalk. In marketing, appealing to a consumer’s loss aversion tendency can be evident with trail periods, rebates, sales, and two-for-one deals.

Principle 3: Habituation

Habituation is a form of learning where a being unknowingly decreases its response to a stimulus after repeated or prolonged exposure to the stimulus. For example, if you visit an individual who lives close to railroad tracks or the airport, you immediately hear the noise of the train or airplanes. Chances are if you ask them about it they likely don't even notice it. They are likely speaking the truth, and it is due to habituation.

Habituation effects the sales process. Companies are constantly changing advertisements due to this biological response of the potential consumer. Consumers will stop responding to advertisements overtime after repeated and prolonged exposure to the same advertisement. Have you ever seen the same exact commercial run at the Superbowl two years in a row?

For this reason, you will notice that displays change in stores, banners change for company websites and different products are featured overtime. By changing displays and advertisements, a company is maintaining relative exposure to the buyer.

Even the best advertisements have a shelf life.

Principle 4: A Buyer will Follow your Lead

The brain contains mirror neurons. Mirror neurons cause one to “mirror” the behavior of another. In the sales process, a company can use mirror neurons to their advantage.

Sharing testimonials of excitement about a product or service is an example of this phenomenon. Think about an infomercial. For 30 to 60 minutes companies share success story after success story, happy consumer after happy consumer. A viewer watches the consumer and desires to mirror their emotion and results by experiencing what they are experiencing. Online consumer reviews are also another example.

A final example of utilizing mirror neurons is offering samples. Allowing a potential buyer to witness a sales person’s excitement will create the opportunity for the potential buyer to mirror that excitement. In addition, when potential buyers witness others sampling a product, they will more likely desire to sample that product themselves because as an animal they will want to mirror that behavior.

Principle 5: Be the Authority

Stanley Milgram is a famous social psychologist who is best known for his controversial experiment on obedience. Milgram conducted a study to learn about the dynamic between obedience to authority and personal conscience.

During the study, the participants were instructed to administer a shock (electricity) every time an individual responded to a question incorrectly. The researcher encouraged the participant to continue to administer the shocks, challenging their personal conscience of guilt while harming another person.

During this study, the researcher was the authoritative figure. The conclusion of the study yielded that ordinary people are likely to follow orders given by an authority figure. How does this relate to consumer buying behavior?

Nike, arguably one of the largest global brands, uses authority to influence consumer behavior in the form of endorsements. Nike spends a large portion of their marketing budget on endorsements from superstar athletes. Pro-athletes are influencers (authorities) in the marketplace.

Some current and past examples include Ronaldinho (soccer), Roger Federer (tennis), Michael Jordan (basketball), Tiger Woods (golf), Paul Rodriquez Jr. (skateboarding), and Derek Jeter (baseball). By using celebrity influencers, companies can increase revenue by leveraging this authority in the marketplace.

In Summary

Primary market research techniques include surveys, focus groups and one-to-one interviews, which all have an objective of understanding a consumer's preferences, opinions, needs, and experiences. Those market research techniques provide one layer of data that can help improve marketing messaging for a company, but it does not account for all possible reasons a consumer buys.

The psychology of sales takes primary market research techniques to a deeper level of understanding. By interlacing consumer behavior on a conscious and subconscious level, a more holistic view and understanding of, "Why customers buy?" is uncovered.

Drive Research is a market research company located in Syracuse, NY. Interested in conducting a survey, focus group, or another form of market research with our team? Want to generate insights for your operations, marketing, and strategy? Contact us.

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Consumer Behavior