How Understanding Consumer Behavior Cures Low Sales
In 1995, Sheena Iyengar, a professor of business from Columbia University, conducted a study about jam.
She set up a sample booth of Wilkin & Sons jams in a California gourmet market and switched from offering a selection of 24 jams to a group of 6 jams every few hours.
Each customer tasted (on average) 2 jam flavors regardless of the size of the assortment. And each of them received a coupon for $1 off of one jam.
Here’s where the study gets interesting…
Only 40% of customers stopped for the small assortment, while 60% paused for the large one.
BUT – a whopping 30% of people who sampled from the small assortment decided to buy, while only 3% of those who sampled from the larger selection purchased a jam.
According to Professor Iyengar, the study “raised the hypothesis that the presence of choice might be appealing as a theory. But in reality, people might find more and more choice to actually be debilitating.”
This is just one example of the many factors that influence the consumer’s decisions to buy (or not to buy).
And the more we delve into the phenomenon of consumer behavior, the more complex it gets.
Why “Reducing Choice” is Essential Today
People living in urban areas encounter up to 5,000 ad messages per day (according to some reports). 5,000!
That’s. A. Lot. Of. Messages. Substantially more than consumers saw 10 – or even 20 years ago.
As demonstrated in the story above, too many choices can be daunting and intimidating to otherwise eager and interested consumers. And considering the surplus of ad messaging being force fed into consumers’ eyes and ears these days, it’s more important than ever to find ways to distinguish your brand and set yourself apart from the competition.
Otherwise, you risk becoming lost in the crowd. Or worse – forgotten altogether.
So how do you make sure it’s your brand’s messaging that people remember over the 4,999 other ads they see every day?
You find out what makes them tick.
People have been studying consumer behavior for decades. And while it isn’t an exact science, there are definitely patterns that emerge, indicating why any given consumer will chose one product, brand, or company over another.
We can learn more about these patterns (and how to uncover them) by taking a look into basic psychology behind consumer behavior.
What We Can Learn From 1950’s Psychology
Even back in the day when people had far less ad messaging infiltrating their daily lives, psychology was still a huge influencer of consumer behavior.
It mattered enough for people to start studying it – as early as the 1950’s – under the term motivation research.
What these early researchers learned was (and is) pretty interesting – and still applies to what we know about consumer behavior today.
It was then that researcher Martineau discovered that gas station cleanliness was the most important determinant of whether drivers would stop there, and that instant coffee was even consumed by coffee connoisseurs who were in a hurry.
These findings (and many others) showed a strong relationship between psychology and consumer behavior – a relationship that a committee convened by the American Marketing Association in 1950 recognized as being too powerful to ignore, stating that:
“Motivational research is so important to the development of the applied science of marketing that a constant effort should be made to see that the truest insights of the other social sciences be made available to marketing in a form in which they can be made to bear on marketing problems” (Woodward et.al,. 1950).
But perhaps the most fundamental truth to motivation research that still heavily applies to consumer behavior today is summed up in this quote by Martineau,
“In an intelligent, normal person, virtually everything is motivated by subtle reference to the person’s self-ideal—the kind of character ideal he wants to become. …In this yearning for self-expression, we reach for products, for brands, for institutions which will be compatible with our schemes of what we are or want to be” (Martineau, 1957, pp. 45-46).
Why Understanding Consumer Behavior Should Influence Your Marketing Strategy
“Okay, I get it,” you may be thinking. “Psychology influences consumer behavior. But what does that mean exactly?”
It means that (most of the time for longer sales processes) there are real, clear-cut reasons for why people make the choices they do. And the more brands can learn and understand about these reasons, the better they can market (and sell) to their target audience.
Trying to take into account all of the factors that motivate consumers to buy can be overwhelming. But at the heart of it all, consumers today are no different than they were back in the 1950’s.
They still want to be a part of something. They have visions, goals, and aspirations of who they want to become. They’re drawn to brands that bring them closer to those ideals. And they have MUCH better access to open information (so you can no longer bullshit them).
For this reason, it’s vital to understand who your customers are, where they’re at in the buying cycle, and what their “next step” is (check out this article for some practical suggestions on how to gather this type of information).
Once you have this information, then you can create and shape the entire customer experience online — from promotional messaging to how they navigate and interact with your website to find things.
And you start to make insightful, informed decisions about how a website should look, act, feel and function.
This small stuff is the extra effort that creates the difference between another failed redesign or finding a way to thrive in today’s super-saturated market.
In the next installment of this series, we’re going to tackle practical ways to apply this information about your target audience in order to benefit your business (and bottom line).
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