Consumer Behavior: Definition, factors and methods

Understanding consumer behavior is a key element of a marketing strategy. In fact, before implementing a strategy, it is essential to fully understand the needs and expectations of the consumers you want to influence. To do this, you need to understand how the consumer will react and be influenced by your marketing strategies.

To delve deeper into the preferences of your target audience, some of the questions you must answer are:

  • How do the consumers perceive the information?
  • How do you capture their attention? 
  • What are their needs? 
  • What factors influence them to make a purchase decision? Are they price, quality, commercial offer, others?

The goal of every entrepreneur is to meet the demands of its public and market, which will give a boost to the organization’s sales and customer satisfaction.

To achieve this goal, an entrepreneur conducts study and gains insights into the consumer’s behavior who can be potential buyers. Surveys and research studies make decision making easier and aid in improving relationships with customers.

Why is consumer behavior so important?

Businesses invest a lot of time and resources in their products and services. Hence, it is absolutely essential that their offerings cater to the needs of their customers. Or, they will incur huge amounts of losses. So, in order to make sure that the products as well as the brand is well-accepted by the consumers, it is important to first know what consumers want and are likely to buy.

  1. Better marketing and communications

As the living standards, trends, and technology keeps changing; consumers’ choices also keep varying. Understanding how these factors affect customers’ buying habits helps organizations design their messaging accordingly. Thus, having insights into consumer behavior can help marketers in meeting their objectives.

  1. Improve customer retention

It is far more beneficial to retain an existing customer than to gain a new customer. It’s easier to sell new products and services to your existing customers than to find new ones.

Entrepreneurs who are able to retain their customers and create strong relationships, manage to create a strong brand for their business. A loyal customer can prove to be a promoter of your business and spread positive word of mouth. Satisfied customers share their happy experience with their friends and family. 

So, retaining as many customers as possible should be the goal of entrepreneurs interested in growing their company.

  1. Increase customer loyalty

Understanding customer behavior helps in finding out ways to boost customer loyalty, which in turn, will lead to higher sales and a strong brand. Analyzing trends in sales can aid in offering discounts as well as suggesting the best products and services to them.

  1. Better plan inventory

Researching customer attitudes helps companies plan inventory and stock raw materials. In case of service based business, the management team can better plan their human resources. If businesses see a trend in demand of specific products, they are likely to send more purchase orders to their suppliers. The consumer behavior data can help them to balance demand and supply.

  1. Increase sales

A company always aims to satisfy specific market niches. Even if the company operates in different sectors, they should target potential buyers in each segment. If you know your customers well, you can have better conversations with a high probability of closing the deal.

Knowing who you are selling to makes it possible to clearly define your objectives in the market. Learning more about the consumer behavior helps to define the main customers that come directly to the company. Your inventory should be stocked with the products that meet requirements of your potential customers.

Instead of taking random shots and trying to sell to anyone, having knowledge about your customers’ likes and dislikes helps in making smarter decisions. Such a strategy has a higher chance of generating sales.

  1. Research competition

Studying consumer behavior helps in understanding the competitive market. You can plan on how to position your products and services to offer competitive advantages. Find out answers to questions like:

  • Is the customer already using a competitor brand?
  • What drives a consumer to buy from your competitor?
  • Are potential customers happy with the competitor brands?
  • What are the gaps between your products and that of competitors?

Explore further: Consumer research: Examples, process and scope

What factors influence consumer behavior while purchasing?

Consumer behavior is influenced by many factors such as situation,  psychological, environmental and marketing factors, personal factors, family, and culture. 

Businesses try to collect data so that they can make decisions on how they can reach their target audience in the most efficient way. While some influences may be temporary and others can be long lasting, these factors can influence a person to buy or not buy. Let’s now look at some of these factors in detail.


  • Situational factors: They are temporary in nature and include physical factors such as a store’s location, layout, colors, music, lighting, and even scent. Companies try to make these factors as favorable as possible. Other situational factors include holidays, time, and moods of the consumer.

  • Personal factors: These factors include demographic factors such as age, gender, income, occupation, etc. It also depends on one’s interests and opinions. To further understand consumers, companies also look more closely at their lifestyles – their daily routine, leisure activities, etc.

  • Social factors: This factor also includes social class, level of education, religious and ethnic background, sexual orientation, and people around you – family, friends or social network. Different cultures have varying customs and rituals that influence how people live their lives and what products they purchase.

    Generally, consumers in the same social class exhibit similar buying behavior. Most market researchers believe a person’s family is one of the biggest determinants of buying behavior.

  • Psychological factors: A person’s ability to understand information, perception of needs, and mindset influence consumer’s behavior. One’s reaction to a marketing campaign will depend on one’s beliefs and state of mind. 

How to collect data on consumer behavior?

To understand consumer behavior, you need to know how consumers think and feel about the different alternatives available in the market, how they reason and how they choose between different options.

The motivations that influence consumer behavior are so broad that the most effective way to study them is to use different research methods. These methods should collect both qualitative and quantitative data. Some of the common data collection methods are:

  • Customer feedback: Reading comments left by your customers can highlight recurring problems or desires.
  • Question and answer sites: These websites can give you insight into the questions and concerns consumers have about your brand, services or products.
  • Surveys: Online surveys can be easily developed and allow you to ask specific questions.
  • Focus Groups/Online Panels: Gather a few customers together to ask them questions on an ongoing basis, depending of course on your research needs. Learn here what online panels are and the advantages of using them.

Online surveys are the  most efficient method of conducting consumer behavior studies. You can create a survey using a survey software and send it to your target audience. You can also customize the survey flow to ask only relevant questions to respondents.

Online survey software lets you analyze data and generate reports to make better decisions. You can also filter data, compare results and identify trends over time. Based on the results, you can predict demand and formulate your sales and marketing strategy. It also helps in  designing pricing models and the maximum amount customers can pay for a specific bundle of features.

QuestionPro can help you learn more about your potential customers and conduct research studies. If you need any help with designing a survey and collecting data, connect with us. We’d be happy to help!