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Now that you know who is a consumer you also must know what is
consumer behaviour and how does it affect the organizations.
We have four main factors that affect consumer behaviour they are;
Culture
Culture is a very complex belief of human behaviour it includes the human
society, the roles that the society plays, the behaviour of the society, its
values customs and traditions. Culture needs to be examined as it is a very
important factor that influences consumer behaviour.
Sub-Culture
Sub-culture is the group of people who share the same values, customs
and traditions. You can define them as the nation, the religion, racial groups
and also groups of people sharing the same geographic location
Social Class
Society possesses social class; in fact every society possesses one. It is
important to know what social class is being targeted as normally the
buying behaviour of a social class is quite similar. Remember not just the
income but even other factors describe social class of a group of
consumers.
Reference groups
Under social factors reference groups have a great potential of influencing
consumer behaviour. Of course its impact varies across products and
brands. This group often includes an opinion leader.
Family
The behaviour of a consumer is not only influenced by their motivations and
personalities but also their families and family members who can two or
more people living together either because of blood relationship or
marriage.
Occupation
Occupation of a consumer is affects the goods and services a consumer
buys. The occupations group has above average interest in buying different
products and services offered by organizations. In fact organizations
produce separate products for different occupational groups.
Life style
People originating from different cultures, sub cultures, occupations and
even social class have different styles of living. Life style can confirm the
interest, opinions and activities of people. Different life styles affect the
purchase pattern of consumers.
Self concept and personality
Every individual is different and have different and distinct personalities.
Their distinct personalities and distinct physiology effects their buying
decisions. Hence purchase of products and services defers from person to
person.
Motivation
Motivation is activating the internal needs and requirements of the
consumer. It can also be described as goals and needs of the
consumers. Motivation arouses and directs the consumers towards certain
goals. These needs can be psychological needs, needs of security, social
needs, esteem needs and also self actualizing needs.
Perception
Perception is sensing the world and the situations around and then taking a
decision accordingly. Every individual look as the world and the situations
differently. The judging ability and capacity of every individual is different
and hence the look at the world differently. This is what separates the
decision taking abilities.
Perceived value is the benefit that a customer believes he or she received from a
product after it was purchased.
Perceived value is the worth that a product or service has in the mind of the consumer.
To obtain a higher price for products, producers may pursue marketing strategies to
create a higher perceived value for their products.
It is the difference between the total obtained benefits according to the customer
perception and the cost that he had to pay for that. Customer perceived value is seen
in terms of satisfaction of needs a product or service can offer to a potential customer.
The customer will buy the same product again only if he perceives to be getting some
value out of the product. Hence delivering this value becomes the motto of marketers.
The CPV is kind of an evaluation done by customer on what value a product or a service
would be able to provide if he/she buys it by paying money.
Please note that the benefits and costs also include the emotional benefits and costs.
Example of Customer Perceived Value:
While buying a car, the expected reactions from family and friends also become a part of
benefits or gain. The customer evaluates whether the particular car would be able to
provide whatever he/she is looking for from a car. Whether the car would provide the
comfort and the usability. Also for many customer the perceived value would also
include the mileage a car gives.
Customer satisfaction
Here are the top six reasons why customer satisfaction is so important:
Any customers that give you a rating of 7 and above, can be considered satisfied, and
you can safely expect them to come back and make repeat purchases. Customers who
give you a rating of 9 or 10 are your potential customer advocates who you can
leverage to become evangelists for your company.
Scores of 6 and below are warning signs that a customer is unhappy and at risk of
leaving. These customers need to be put on a customer watch list and followed up so
you can determine why their satisfaction is low.
Thats why its one of the leading metrics businesses use to measure consumer
repurchase and customer loyalty.
If you had a recommendation for one business would that sway your opinion? Probably.
So how does that recommendation originally start? More than likely its on the back of a
good customer experience. Companies who offer amazing customer
experiencescreate environments where satisfaction is high and customer advocates are
plenty.
This is an example of where customer satisfaction goes full circle. Not only can customer
satisfaction help you keep a finger on the pulse of your existing customers, it can also
act as a point of differentiation for new customers.
Customer satisfaction is the metric you can use to reduce customer churn. By measuring
and tracking customer satisfaction you can put new processes in place to increase the
overall quality of your customer service.
Satisfaction plays a significant role in how much revenue a customer generates for your
business.
For example, you might have a cost per acquisition of $500 dollars and a CLV of $750.
Thats a 50% ROI from the marketing efforts. Now imagine if CLV was $1,000. Thats a
100% ROI!
Customer lifetime value is a beneficiary of high customer satisfaction and good
customer retention. What are you doing to keep customers coming back and spending
more?
How much will that affect your business and its reputation in your industry?
Customer satisfaction is tightly linked to revenue and repeat purchases. What often gets
forgotten is how customer satisfaction negatively impacts your business. Its one thing to
lose a customer because they were unhappy. Its another thing completely to lose 20
customers because of some bad word of mouth.
If that stat does not strike accord with you then theres not much else I can do to
demonstrate why customer satisfaction is important.
Customers cost a lot of money to acquire. You and your marketing team spend
thousands of dollars getting the attention of prospects, nurturing them into leads and
closing them into sales.
Imagine if you allocated one sixth of your marketing budget towards customer retention.
How do you think that will help you with improving customer satisfaction and retaining
customers?
Survey customers
Surveying customers is the only probable way of getting customer feedback unless they contact you.
Most people are busy and have no time to pass redress.
You can provide survey through several ways such as emails and use of phone calls.
To get credible feedback you need to allow customers to answer questions on weighted scale.
You can conduct repeated surveys, over time, to measure changing comments from customers.
Understand expectations
Understanding what customers expect from you will provide ground to satisfy their expectations by
giving them enjoyable service.
Making an effort to discover what customers expect from you in terms of service and products is the
way to satisfying their needs.
Pinpoint specifics
Whether a customer is satisfied or not, you need to collect information to help you assess the
situation.
Collect information about what customers purchased, what they liked and they did not like, their actual
purchase expectation and their suggestions for improvement.
Intentions to repurchase
Future hypothetical behavior that indicates repurchasing the product is a measure of satisfaction.
Satisfaction can influence other post purchasing trend through use of the word of mouth or social
media platform.
Monitoring
Monitoring can be directed at phone, email and chat communications.
Monitoring includes automated phone interactions designed by companies to help give real world
glimpse.
Feedback cards
Dishing out cards will help gauge customer comments.
Customer Lifetime Value is the single most important metric for understanding your customers. CLV
helps you make important business decisions about sales, marketing, product development, and
customer support. For example:
The most straightforward way to calculate CLV is to take the revenue you earn from a customer and
subtract out the money spent on acquiring and serving them.
4. Pass on information
If you read an article, see a new book, or hear about an organization that a customer
might be interested in, drop a note or make a quick call to let them know.
Become your customers go to adviser on all things relating to your industry. For
instance, if youre in IT, be their IT Guy. Help them with choosing the best mobile plan,
let them know about upcoming compliance regulations. Go the extra mile.
8. Invest in a self-service channel
Create a knowledge-base or FAQ section of the common questions and problems that
your customers encounter. Direct customers to specific answers this will save you from
answering the same question 100 times, plus it will give your customer a solid response
to their problem.
Building trust requires businesses to continually put customers interests ahead of their
own. Customers will see this, and you will earn their trust and go a great distance to
building customer loyalty.
There it is 18 strategies and tips you can use to start building customer loyalty. Apply
these today to start retaining more customers and growing your business.
1. Core Product
This is the basic product and the focus is on the purpose for which the
product is intended. For example, a warm coat will protect you from the cold
and the rain.
2. Generic Product
This represents all the qualities of the product.
For a warm coat this is about fit, material, rain repellent ability, high-quality
fasteners, etc.
3. Expected Product
This is about all aspects the consumer expects to get when they purchase a
product.
That coat should be really warm and protect from the weather and the wind
and be comfortable when riding a bicycle.
4. Augmented Product
This refers to all additional factors which sets the product apart from that of
the competition.
Is that warm coat in style, its colour trendy and made by a well-known
fashion brand?
But also factors like service, warranty and good value for money play a
major role in this.
5. Potential Product
This is about augmentations and transformations that the product may
undergo in the future.
For example, a warm coat that is made of a fabric that is as thin as paper
and therefore light as a feather that allows rain to automatically slide down.