Have you ever thought much about why you may prefer a certain product or service while your friend might choose something different? Wondered why you opt for Papa John’s pizza when your friend swears by Dominos?
The answer lies in the five factors that influence consumer behaviour. These factors are a mix of internal and external factors which can work to drive you towards one decision and your friend towards another. They can be utilised by businesses to help drive marketing campaigns and to understand which customers to target, when to target them and which marketing techniques work most effectively to drive customers further down the sales funnel.
These can be influenced depending on whether customers are shopping daily, whether they research products before they buy or if they are more likely to shop spontaneously. They are also influenced by income and financial status as well as what others in their lives are purchasing and talking most about.
Understanding the main factors that influence consumer behaviour is important to help brands grow lasting relationships with their audiences and help to expand their customer base and reach new markets. Working to connect with consumers on an emotional level is a great way to achieve success in the business world, and in time increase profits and allow your business to grow.
What are the five factors?
Put simply, the five main factors that act as an influence on consumer behaviour are Psychological, Social, Cultural, Personal and Economic factors. These five factors determine if a customer has an interest in a product and whether they actively purchase a product or not.
The first influential factor on consumer behaviour is the psychological. This can include everything from a customer’s motivations for purchasing a product, their perceptions of the product from customer reviews and talk amongst peers, their learning experiences with the product – that is – their experiences from having bought the product in the past or their learning from others’ purchase history such as in the form of feedback and product reviews. Finally, a person’s attitudes and beliefs can greatly impact their likelihood of buying a product.
The second set of factors are social factors. This is essentially how our friends, family and peers view a product and how this can influence our consumer behaviour. For example, if a person’s family is more drawn to a particular brand or product then they are likely to opt for a similar option. Humans live to imitate others and fit in with our surroundings and external reference groups. Finally, our social roles and status can influence whether we choose to buy a product too.
As humans, our personal values and ideologies are influenced greatly by the culture we are surrounded by. This can be impacted by religious views, our social class or even our individual communities. Each subculture tends to have its own values and preferences, so these are a huge influence on customer purchasing habits.
As well as the social, psychological and cultural factors that work to drive and influence our purchasing habits, each individual has their own personal factors that influence their behaviours. This can be altered due to age, as different generations and age groups tend to be in the market for different products due to trends, personal needs and key life events such as having a child, getting married or retirement. The age of a consumer can be a huge factor in what kind of products and brands they are likely to invest in. Other factors include the income of a given individual, their occupation or the line of work that they are in and the kind of lifestyle that a person leads. Each of these personal factors can vary greatly between individuals, so work to understand your target market and where they fall in terms of each of these key points.
The fifth and final factors are economic factors. This can include a consumer’s personal income as well as their family income. However, economic factors also include things such as income expectations, consumer credit and the liquid assets an individual owns, as well as their personal savings. Put simply, the market that an individual is living in and the financial stability of that individual will greatly influence how much a person is willing to spend and where they are likely to spend that money.
All in all, each purchasing decision is made with our individual needs in mind and can be influenced by any of these five factors. It is also important to remember that these five factors are not separate, they are all intertwined and influenced by one another. For example, your financial situation may be influenced by your family’s financial situation, which is determined by social class and may in turn influence the kinds of products that your family bought throughout their lives. All of these factors are important and reliant on each other to create each individual customer and influence their consumer behaviour.