Consumer Behaviour

When it comes to understanding consumers it’s always important to consider the issues from a rational perspective, and then completely ignore what you conclude.

Why?

Because consumer behaviour isn’t, for the most part, rationally based.

Recently I happened across a great example.

The UK supermarket chain Waitrose has always operated at the higher end of the market, catering to customers who are willing to pay a little more for higher quality produce.  Waitrose’s marketing makes much of the fact that they source their products carefully; some of their packaging will state which farm meat has come from for instance.

With the economic downturn all of the supermarkets have been keen to communicate low price messages; which isn’t easy since most of them operated on a low price platform anyway.  Indeed, the big two supermarkets (Asda who are owned by Wal Mart) and Tesco frequently squeeze suppliers brutally hard in order to drive down prices.  With such large shares of the grocery market, an efficient supplier has to decide between saying goodbye to most of their profit, down-grading their product, or losing a large proportion of their sales in an instant.

With most suppliers already squeezed the supermarkets have created new products, sometimes positioned below their already lower-priced own-label offerings, to sell more cheaply.  Sometimes they create new brands for these products, and sometimes they package them as new own-brand offerings.

Waitrose introduced an ‘Essentials’ own-label range and it seemed to be selling well.

I looked at the pizzas.

The ‘Essentials’ pizzas were more expensive than the regular own-label equivalents!

Looking on the company’s website I also notice that, even when the per pizza price is lower, the price per kilogram is higher on their ‘budget’ pizzas.

But they still sell.

Because customers buy the concept.  If the first instance primes them to believe that the product is cheaper, and in particular if that first experience isn’t bad from a quality perspective, then future purchases are made as an emotional reaction: seeing an ‘Essentials’ product is an opportunity to make a worthy purchase – a purchase that feels like a good, money-saving decision in these difficult times.

Few people will check what the actual cost is or how it lines up against alternatives – let’s face it that would make shopping extremely time-consuming.  And so the company can make a greater profit from a lower-priced product!

And to add to their prize the supermarkets, having drawn people in with the promise of lower-priced options, have the opportunity to influence the customers visiting their stores.  Feeling good about the money they believe they’ve saved, some customers will indulge in small ways elsewhere in the store.

Multi-buys will feel like great value, but lead to more products being purchased and, once sitting their on the shelf, the likelihood of their being consumed is high.  Consumption increases because of the constant visual prompt and feeling that a plentiful supply is available. It may even lead to feeling that a similar quantity of purchase is required next time, even if the offer is no longer present.

I’m not suggesting that such practices are admirable, desirable or morally justifiable.  But they provide a useful insight into the workings of the consumer mind.

Philip Graves

P.S. If you want to learn more about consumer behaviour take a look at my eBook, The Secret of Selling: How to Sell to Your Customer’s Unconscious Mind.

Philip Graves consumer behaviour consumer behaviour, priming, psychology, why customers buy

Firstly, thanks for all your comments, I find them encouraging, constructive and inspiring.

Secondly, Yann has raised another question.  Questions are wonderful things and, yet again, Yann has raised something that causes me to think about the subject of consumer behaviour (which I love to do) and given me a direction for this edition of my blog.

Yann asked whether our unconscious associations of brands are more influenced by broader environmental factors than advertising; things like what we hear (reputation).

Of course, there isn’t a single, clear-cut answer to this.  It is certainly the case that, were someone to hear an involving account (story) from a friend (social proof / trusted source / someone like me) this would trump an advertising message.  In this case, the powerful associations primed by the friend’s account work very similarly to negative personal experience: as soon as the brand name appears (be it at the start, middle or end of the ad) those established associations spring up and cause the person to dismiss what they’ve just seen.

By way of example, the UK furniture retailer MFI had a lousy reputation.  In fact, the first episode of a consumer rights TV programme Watchdog (in 1980) featured a complaint about the company that was handled extraordinarily badly by the poor store manager who was confronted by the BBC’s cameras.  I have never known anyone who had a problem with them, but I have been primed by the media to steer clear at all costs.  [MFI went under a few months ago.]

On the other hand, a lot of people don’t have an experience of a brand.  A lot of brands deal with superfluous elements of our lives.  Many of the things people tell us are not conveyed with sufficient emotion for us to assign unconscious significance to them (and so they are soon forgotten).

So humorous adverts, whilst inevitably failing to work on those already alienated, can create a positive emotional association for a brand.

Some brands have transformed their fortunes in exactly this way.  In the UK, Pizza Hut and Tango both experienced significant growth and profitability by taking brands that had lapsed into indifference and associating them with upbeat emotion.

When it comes to measurement of the unconscious impact of marketing (another of Yann’s questions) the only reliable way to evaluate is with a test and control methodology.  One area gets one set of unconscious associations the other doesn’t; or for a period you try one way, and later you try another.

With large brands it’s easier to do the former; it’s also important to consider the potential timescales involved.  Advertising that creates a more positive image of a brand in the way I’ve described might not produce immediate sales success; but it may still have an impact.

The key here is to adopt a strategy and persist with it for long enough for consumers to be influenced.  This is a by-product not just of the opportunity to be exposed to the communication sufficiently frequently, but also of the incidence with which they come into potential purchase contact with the brand.  If purchase frequency is low the campaign would have to be sustained without becoming irritating.  Of course, if a more motivating proposition appears on the scene from a competitor this can further muddy the waters.

Good marketing needs to be consistent at all the points it comes into contact with consumers.  The attractiveness of TV advertising (when it’s understood and applied correctly) lies in the opportunity to create emotion and associate the brand with it:  for a few seconds, the brand has full control of the consumer’s environment.

Philip Graves

Philip Graves Advertising Advertising, analysis, psychology, why customers buy

Today I had the last of five or six conversations with my brother about buying a camera.

I’m no Annie Liebovitz!  But I did get into SLR photography many years ago and have had the good luck to take one or two half decent photographs over the years – including one of the Brooklyn Bridge that my brother has in his house.  It’s a good picture, although not so good that he’s ever asked me to sign it or anything.

Probably the best picture I ever took was of a sculpture.  I was in Paris and took a black and white photo of a Rodin work called The Woman Under the Stone (only that in French, I imagine).  By over-exposing the picture perfectly, the dark weathering of the sculpture was magically transformed into a dramatic blend of shimmering shades. 

Of course, this was in the days when you didn’t know what your pictures would look like until you got them developed.  Incidentally, when I said I had been lucky to take some good pictures, it wasn’t false modesty.  The Rodin picture only came out that way because I’d forgotten to change the settings over when I got outside!

All of which is nothing to do with consumer behaviour.  But what I did learn from the many conversations with my brother is how much easier it is to make a clear recommendation when your own money isn’t involved: it’s much easier to help spend someone else’s money.

Don’t misunderstand me, I’d hate to give my brother bad advice.  But the difference is that I don’t have any unconscious rumblings of loss aversion to contend with.  If there’s disappointment down the line I won’t have lost anything personally; it is, after all, still my brother making the final decision about what to do with his money.

So how might this be useful from a consumer behaviour perspective?  Well, if you can find a way to encourage people to recommend your product or service to their friends it’s likely to reap dividends.  Persuading someone to recommend you to someone else (ironically, even if they haven’t used your services themselves) can be more influential and compelling than delivering your sales message to them first-hand!

Everyone is a potential customer.  And even someone who doesn’t buy from you may recommend you to someone else.

Philip Graves

Philip Graves consumer behaviour, selling consumer behaviour, marketing communication, why customers buy

I enjoy watching myself as a consumer, in that slightly schizophrenic way that I encourage everyone interested in understanding customers better to do.  If you have the right framework you can learn a lot about the way in which other people make decisions by watching how you make a decision – after all, you’re a person aren’t you?

The challenge is always to split out that part of you that consciously post-rationalises what you do in a totally bogus way.   If you can learn to tell yourself that, deep down, you’re smart, sexy, clever and incredibly good at parking a car, you can put your ego to one side for a few minutes and observe what you’re doing as a consumer. 

You’ll have a reasonable idea that you’re on the right track when you spot yourself doing things that are  impulsive, irrational, poorly judged and altogether a bit dumb.

Recently, I had to choose between two suppliers for a fairly major contract.  Both put in a huge amount of work to provide their quotes and I felt both would have been excellent solutions for my needs.  But I could only choose one.

So I thought I would give as considered a response as possible to the firm that I wasn’t choosing, in the hope it would help them.

I’ve included it below.

Thank you for visiting me yesterday and providing the above quote in such a timely fashion.

I’m writing to inform you that I have decided to use another company.  The decision was incredibly hard and made all the more difficult by the fact that the specifications suggested by the companies I spoke to differed substantially, making a simple price comparison impossible (not that it was ever solely a matter of price). 

In your position I would be keen to understand why I had not been chosen over a competitor.  In this case it was a matter of finding it almost impossible to make a choice, opting to speak to the firm that I had spoken to first to try and resolve the best route forward and, as a result of that conversation, opting to go with the person who was giving me advice at that time.   

During the conversation I was better able to understand the reasons for them recommending the unit they had (a slightly higher specification), was able to appreciate the benefit of features they suggested, and they agreed to add in an additional item.  I was happier with the idea of a wired system over a wireless one (given wireless problems we’ve experienced in the past), and they remembered from their visit that the necessary cabling could be routed quite easily. 

Of course these differences are changes that could easily be incorporated into your own quote. However, as a consumer there comes a point where the complexities involved risk one never making a decision, and at some point it becomes necessary to “jump in” even though you know that you don’t have perfect data.   

I was hugely impressed by your company’s professionalism and, as you’re no doubt aware from your commercial success, my selection of a competitor was no reflection on your approach.

Thank you again for supplying me with a quote

Philip Graves

Philip Graves consumer behaviour analysis, choice, consumer behaviour, why customers buy

I really appreciated all of the comments received in response to yesterday’s post and I wanted to pick up on one that, as a consumer behaviour expert, I found fascinating.  It also was one of the last comments posted so people scanning through what others have said wouldn’t have seen it.

Mark (MarketingScoops) said: “I had an interesting shopping experience today. I had no intention of shopping but I received a 40% off one item special on my blackberry. Once I was in the store, I entered the shopping mode and bought 3 things. The super special got me in the store and completely changed my mindset.”

This reveals a couple of very interesting issues.

1. It reinforces my point about a lot of consumer behaviour not being “need” based, but being triggered far less rationally and influenced much more indirectly.
2. It illustrates the route to understanding consumer behaviour: whilst there is no direct link between the adaptive unconscious mind and the conscious mind, an awareness that it is the former that directs the show enables you to become more aware of its involvement in your own behaviour.  By looking at our own behaviour dispassionately (rather than with the distorted bias of our own conscious delusions) we can start to see how we’ve acted unconsciously and then begin to trace what might have influenced us to do so.  In essence what we have to learn to do is stand back and observe ourselves.

The way to enhance this understanding further is to apply what’s been discovered through studies in social psychology and neuroscience, which often help to explain our seemingly random acts of consumerism.  And that’s the sort of thing I bring readers of my eZine (honestly, how can you resist signing up?!)  Of course, once you start to develop this skill you can apply it to what you see your own customers doing.

Philip Graves

Philip Graves consumer behaviour consumer behaviour, influence, neuroscience, psychology, why customers buy

You’d be hard pressed to find any marketing text book that doesn’t talk at some point about “consumer need”.

It’s a simple enough concept: the products that will do best are those that meet a requirement that someone has.

At the next level you may find there’s a discussion on the types of consumer need.  Broadly these break down into physical and emotional needs. 

So, by way of simplistic example, the former says that, because you’re cold you will buy a hat.  The latter that because you want to feel special you’ll buy an expensive hat. 

This is all fine up to a  point.  But I happen to think that most consumer behaviour is nothing to do with “need”.  This is a problem because the notion of consumer need suggests that, at some level, a consumer is aware of what it is they are getting as a result of acquiring the product, and in my experience that’s often not the case.

Have you ever noticed how much some people’s lives are taken up with shopping; for some people human behaviour is consumer behaviour, almost exclusively.  When they aren’t shopping, they’re thinking about shopping, or watching TV programmes surrounded by ads, or reading magazines that are promoting consumerism directly through their copy or indirectly through their adverts. 

And some people will talk about shopping for hours; granted they’re not talking about the physical act of buying, they’re talking about something they’re thinking about buying, or something they’ve bought, or what happened when they tried to buy something.

All of this is has precious little to do with how cold someone’s head is.

I suspect that we’re collectively so preoccupied with shopping because of how our brains work.  Studies show that the brain works by estimating risk and reward, and then sending out extra dopamine (the feel good factor) when a decision is proved correct.  This increases the strength of the the neural pathway, essentially increasing our perception that what we thought would happen did.

I won’t explore the many fascinating implications of this mechanisms now, but when it comes to shopping I suspect it’s so prevalent because it’s so predictably rewarding.

Most of the time when you go out to buy you successfully do so.  The process is completed and you now own something new.  Owning stuff feels nice.  In fact, studies like the one I talked about recently in my eZine (The Importance of Touch) show that we get very attached to things we hold very quickly.

In evolutionary terms it’s generally been advantageous for us to have stuff: stored provisions, items we can use as tools, things we can defend ourselves with, mechanisms for protecting ourselves from the elements and so on.  So our brains have evolved to reward us for having things.

Rarely is shopping disappointing or dissatisfying.  When it is we learn quickly to change our expectations or to avoid places that fail to satisfy, and we can quickly find substitutes.

In essence shopping is low risk, high reward behaviour, and our brains get a kick out of that.

Philip Graves
P.S. You can sign up for my eZine here.

Philip Graves consumer behaviour, consumer research analysis, articles, consumer behaviour, consumer research, psychology, why customers buy

It seems from many of your comments about focus groups that many of you have experienced some of the problems I mentioned in relation to asking consumers about their perceptions.

To be fair to focus groups I should point out that I was talking about research more generally. 

There’s little doubt in my mind that the focus group, per se, is far and away the most useless, unreliable, misleading and distorting ‘tool’ in the marketers armoury. 

Actually, I should qualify that a little.  A focus group in a viewing facility is the pinnacle of disastrous research techniques, but the focus group part of that is no small component.

I would really appreciate hearing more details from those of you who have had bad experiences with focus groups.  Please email me if you have any stories to share (and I’m happy to respect requests for confidentiality).

Back to the subject at hand…

Yes, perception is everything, but asking consumers about their perceptions is fraught with difficulty; on the other hand, understanding them is very important if you want to understand consumer behaviour.

So how do you understand what customers’ perceptions are?

It’s mostly about time.

One of the benefits of unconscious processing is how fast it is.  Whilst you’re wondering what you’re looking at, your unconscious has filtered 10 millions bits of data about your environment and caused you to respond in the way it thinks best – the way that will keep you safest, usually.

So when it comes to establised brand perceptions what you need to look for are quick associations that a customer makes with a brand or product.  For example, when the opportunity occurs naturally (or apparently naturally) for them to talk about a brand, the more fluently they talk and the more they have to say – in a sense, the more they are reeling off something that’s clearly established and familiar to them – the more deep-rooted what they have to say is.

Similarly, when someone engages with a product (for example in a store), you can see how engaged with it they are, and how readily they select it over the alternatives available. 

You might think this is a tricky skill to acquire, but if I asked you to watch some people meeting in a room do you think you would be able to spot who already liked who?  Assuming they weren’t aware you were watching them and had no reason to mask their behaviour, my guess is you would get it right most of the time.  Trained observers can usually tell even when people are trying to conceal their connections.

In talking to people, the biggest clues to brand perceptions come from inconsistencies.  When what someone says doesn’t match all their experiences or what they do it is a significant clue that confirmation bias is turned up high.

When someone is naturally eulogising about a brand (i.e. not in response to a research-style question) the natural thing to do is to empathise with them and mirror their account with those of your own.  Instead, using a suitably gentle tone, explore the contradictions; “You must have had a few problems with them though, everyone does.”

Yes, this is a leading comment / question (the best ones usually are, but I’ll save that point for another time), but it allows you to find out whether this is a genuinely unblemished experience or a biased assessment.

In case you’re wondering, the most likely source of such biases are people’s first experiences with the brand concerned or what they were told by a friend that made them select it in the first place.

Philip Graves

Philip Graves consumer behaviour, consumer research consumer behaviour, consumer choice, influence, psychology, why customers buy

Having suggested that perception is far more important that the reality of experience in determining consumer behaviour, you might think that finding out how a consumer perceives your brand is a useful exercise.

And, of course, you’d be right.

You might suggest, therefore, that asking a sample of your target consumer audience or existing customers would be a smart think to do.

And you’d be a lot less right.  In fact, if you don’t mind me saying so, you’d be wrong.

There are a number of reasons for this.

Firstly, we aren’t always aware of our perceptions.  A lot of our reactions happen at an unconscious, emotional level.  We like to believe we’re wonderfully good at decoding this responses consciously and post-rationalising them accurately, but we really aren’t.  We just make it up and then convince ourselves that what we’ve just told ourselves is true.

This is what I call “the what we like to tell ourselves” error.

In general, we’ll tell ourselves that we’re smarter, sexier, funnier and all round better than we really are.  We’ll also tell ourselves that we’re not in the snare of any silly old brand, it’s just that we’ve happened to find their products are better suited to our needs.

Secondly is the problem of how we think our answer will be perceived by someone else; we’ve learned through the “mistakes” of childhood not to say what we’re thinking but screen it for social acceptability. 

Kids are wonderfully honest and direct: I remember my two-year-old son staring at a man in the doctor’s waiting room and asking very loudly, “Why has that man drawn all over himself?”  The tattooed man didn’t take exception and it was, I think, a very good question to ask (although not one I would except to get an accurate answer to from the chap himself!).  By the age of six my son has enough of a developed sense of social awareness not to ask that sort of question in public.

This filtering process becomes automatic and gives us the “what might they think if I told them” error.

Most people don’t want to be seen as being influenced by brands and advertising even when they’ve fallen for a brand hook, line and sinker.  Even when they are aware they’re very loyal to a brand they probably wouldn’t want to acknowledge the full extent of it’s impact on what they do (even if they are aware of it).

Last, but not least, the actual process of asking someone a question changes the way they think and, therefore, how they respond.  I won’t go into all the psychological nuances of this now, but suffice it to say there’s a reason that psychotherapy makes such extensive use of balanced questions to bring about change.

So, whilst customers’ perceptions are deeply significant in determining their behaviour, asking them about those perceptions isn’t likely to reveal the nature or extent of them reliably.

Next time, if you haven’t guessed already, I’ll tell you how you can understand this aspect of consumer behaviour better.

Philip Graves

Philip Graves consumer behaviour, consumer research analysis, articles, buying behaviour, consumer behaviour, consumer research, why customers buy

Persuasion master Duane Cunningham was interested to know what causes a customer to choose a product (and dating expert April Brasswell was curious curious too). 

I suppose, when it comes down to it, this is the most important question for a consumer behaviouralist like me to answer.

The difficulty is that it’s a much easier question to ask than to answer – not that that makes it a bad question, I hasten to add.

As it happens I’ve been steadily cataloguing (if that’s the right word – which it probably isn’t) the reasons that customers buy something.  You may not be surprised to learn that there are quite a lot of factors that can be involved: thus far I’ve detailed 41. 

When it comes to any single consumer purchase there may be any number of these involved and the purchase is triggered (I suspect) when enough of them exist with sufficient strength to generate the requisite level of desire for the individual concerned. 

That could be one purchase driver activated very powerfully – to give you an extreme example; we would nearly all snap up, say, a fancy pen, if we could buy it for 1% of its typical cost, irrespective of anything else (and certainly irrespective of whether we needed a new writing implement).  Equally, we would pay anything we had for a bottle of water if we’d walked out of a desert, not having drunk anything for three days.

In these hastily constructed examples our desire to save and desire to drink exist so powerfully that we wouldn’t want to stop ourselves buying.

It’s not just about our psychological desires though.  At a higher level what we’re told by someone else or the colour used on the pack can influence our choice dramatically (to name just two other factors).  This is all a by-product of how our unconscious minds’ process what they encounter (and something I explain how to harness in The Secret of Selling, if you’ll forgive the shameless plug.)

So, when it comes down to it, purchase choices are complex but not unfathomable.

Understanding your own customers is first and foremost a matter of seeing your product, service and marketing through the eye of their unconscious mind.

Philip

Philip Graves consumer behaviour buying behaviour, consumer behaviour, consumer choice, The Secret of Selling, why customers buy