They say business is as much a science as it is an art. However, the new science of business may not just be steeped in economics and statistics. An increasing number of studies shed light on business psychology, particularly in the area of behavioral theory among consumer markets.
In an article earlier this year, I wrote about how the rise of ‘Big Data’ affects businesses. In regard to consumerism, I said “you can take the Wal-Mart approach where executives ‘looked at the data and noticed that, as hurricanes approach, people buy large quantities of Strawberry Pop-Tarts. They began to put Pop-Tarts at the front of the stores with storm supplies.’ Fusing causation and correlation allows consumers across variable markets optimize their floor plan and stock their inventory with statistical planning.” Just as “big data” sifts through a haystack for the proverbial needle of information that makes sense of out spending patterns, so does behavioral theory among consumer markets seek to understanding what makes people spend.
Co-author of Content Rules and Chief Content Officer at MarketingProfs, Ann Handley says, “knowing who you are selling to – and why and how they buy – makes your job easier.” In a July 2013 issue of Entrepreneur, Handley wrote on article on behavioral theory where she suggested the heart of doing business with your audience is by first understanding them by “communicating through empathy or intuition.” Arguing that broad generalized content doesn’t resonate with visitors, Handley recommends creating ‘buyer personas’, or in other words “profiles of people who influence or make decisions about what you’re selling.” She suggests asking the following key questions for frame these personas:
- Identify the profile of your ideal customers, including factors like job title, industry, location, and company size.
- How do they live and work? Are they commuters or internet traffickers?
- Where do they get their information from?
- Who influences the decisions they make?
- Which blogs do they read?
- What associations do they belong to and what events do they attend?
- Which social networks do they rely on?
- What factors might the consider before converting as a customer?
Handley says there’s a reason for developing a strong buyer persona – one that can be assessed through a little bit of market research and direct surveys. A buyer persona empowers a company, enabling them to better communicate with their buyers. Knowing how they think it’s the root of getting them to convert into customers. Handley also points to Adele Revella of the Buyer Persona Institute, who adds that “insightful buyer personas can inform strategies for messaging or content marketing, product launches, ad campaigns and sales alignment.
Identifying personas will also move your company light years down the road when it comes to anticipating consumer decision making. In an article under the Association for Consumer Research entitled “Motivation-Need Theories and Consumer Behavior,” authors Raaij and Wandwossen explore the reasons why people buy. One of their findings arrives at five principle reasons people buy, which are summed up a:
- Functional Motives. Need-based purchases premised solely on utility or function.
- Aesthetic-Emotional Motives. Purchases based on style, design, luxury, and comfort.
- Social Motives. Purchases based on “status, prestige, and esteem that comes with using or possessing a product.
- Situational Motives. Purchases triggered by factors such as availability, discount and accessibility.
- Curiosity Motives. A purchase motivated by curiosity that doesn’t necessarily lead to a repeat purchase.
While it can be safely argued that patterns in consumer behavior are equally episodic rather than systematic, it still well-serves a business to understand the psychological makeup of their consumer base. Consumer psychologists recommending utilizing behavioral findings to target product/service types, marketing messages, and even (as Handley recommends) crafting website design and content types around their collective preferences.
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