Customer types, patterns, and segments

Whether you’re in Product or Service management, Sales, or Marketing you know that having an understanding of the customer, analyzing, and keeping track of their behaviour is critical for the effectiveness of your business.

Customers make thousands of calculated and spur-of-the-moment decisions every waking hour of the day from deciding what they will eat to what they’ll wear. It is easy to think that the many ‘buy’ decisions, in particular, are made without too much thought, particularly the less significant ones.

Decoding the thought processes behind customer decisions is no mean feat, particularly if you don’t have the data to back up your hypotheses around why customers do certain things.

We try to decode the thinking because ultimately it can help us understand how customers arrive at their decisions and choices. In the study of customer behaviours, in particular, you’re looking at the processes customers apply to choose, use and dispose of your products and services and this includes factoring in their emotional, mental, and behavioural responses. Behaviour analytics examines the customer through the analytical lenses of psychology, biology, chemistry, and economic practices. For marketers, these analyses help in understanding what influences the acquire, buy and discard decisions. This in turn leads to a rehoning of the message, branding, positioning, promotions, advertising, and even what is ultimately formulated as a product or service.

Only through an in-depth understanding of the customer can businesses hope how best to decide on products and service offerings and how adequately they fill gaps in the market and are needed and wanted.

Revealing the customer

There are three categories of factors that are considered an influence customer behaviour:

• Personal: the customer’s interests and opinions as influenced by their age, gender, ethnicity, and culture.
• Psychological: the customer’s reaction to particular kinds of messaging, which is dependent on their personal perceptions, attitudes, and mentality.
• Social: factors such as family, friends, education level, social media, income, and socioeconomic status all have an influence on customer behaviour.

In addition, there are four principal types of “buy” behaviour outcomes amongst customers; complex, dissonance-reducing, habitual, and variety or variability buy behaviours.

Complex buying behaviour is typically associated with infrequent big-ticket product or service purchases. Such buy activities are complex in that the customers of engaging in a great deal of research before committing to the investment. Examples are purchases of high-end luxury goods, houses, cars, and holidays.

Dissonance-reducing buy behaviour sees the customer encountering difficulties in determining the differences between specific products or brands. This ‘Dissonance’ often occurs when the customer fears making a bad choice. Clothing purchases may manifest this but equally, this can be present when buying appliances or electronic goods. Habitual buying behaviour.

Habitual purchases typically involve very little preference, bias, or influence in the product or brand category because the risk is relatively low and there is no major emotional or cognitive investment. While grocery brands will often suggest that this implies brand loyalty, the reality is that in many cases the customer chooses based on past positive experiences which may be tied to price, look, feel, scent, taste, or overall experience. The repeat purchases are habitual rather than carefully thought through.

Variety and variability in purchase behaviour are typically directly associated with past frustration, disappointment, or a bad experience with a previous purchase decision.

Pretectum believes that for you to have the best effect in terms of influence on the subscription to your services or the purchase of your products, you need to have the best possible understanding of your customer through the customer master data repository. This can help to inform your business in relation to how to target customers, what their purchasing power is like, their likes and dislikes and who influences their decision-making processes.

The Pretectum CMDM enables you to decide the aspects that you need to maintain within the customer master, from an understanding of buying patterns to what they are buying, where, and when they buy, and how they pay.

Consider what you store about your customers today and consider what you could store with the Pretectum CMDM to help your business in getting closer to your customers and being able to more appropriately understand and provide them with the goods and services that they want.