Consumer Psychology: Undeniably Understand Your Customer's Needs
Is it possible to predict who will click? More importantly, is it possible to understand why people buy?
Since the 1950s, marketing used psychology to understand customer needs and expectations.
Why should you learn about consumer psychology?
By mastering this field, you will learn what turns passive readers into loyal customers.
What Is Consumer Psychology?
Consumer psychology is the art and science of why people buy what they buy.
Be alert. It’s easy to get wrapped up into the psychology of buying.
The studies on why people buy are fun and exciting. But getting people to buy from you isn’t as simple as using magical pricing numbers.
Instead, you need the power to predict who will buy from you, and why.
Why Is It Important to Knowing Your Customer?
If you’re promoting your product, naturally you want a return on investment for the time and money you put into it.
But not every message motivates passive readers to become loyal buyers. To get someone to buy, the customer needs to know, like, and trust you.
This presents a challenge. How do you get many people to know, like, and trust you enough to buy?
The easiest way to do this is by creating a customer persona about your potential buyers.
What Do I Need to Know About My Customer’s Mindset?
Have you ever come across a business that did nothing but attempt to sell to you?
My spam box is brimming with these offers.
You’ve probably noticed if you spend all your time selling, you’re alienating potential customers.
This is because different customers are at different awareness levels.
Back in 1966, Eugene Schwartz addressed this exact issue in his book Breakthrough Advertising.
Schwartz recognized there are five distinct customer mindsets:
- Most Aware: Your customer knows your product and he’s ready to buy. Give him a buy button and he’ll push that sucker faster than a teen at an arcade.
- Product-Aware: Your customer knows what you sell and often what the competition sells. But she isn’t sure it’s right for her. At this stage, you need to position your product against the competition.
- Solution-Aware: Your customer knows the result he wants. But he may not know of your product, or that it provides the results he’s looking for.
- Problem-Aware: Your customer senses she has a problem. But she doesn’t know what’s the right solution.
- Unaware: Your customer does not know of their pain, even though he has this problem.
Let’s take a look at the five customer mindsets. I will also share how you can use this information to improve your growth goals.
How Do I Use The Five Customer Mindsets to Increase Sales?
1. The Most Aware.
These customers know, like, and trust you. A lot.
They may have bought a product from you and are ready to buy again. Or they are on your email list and are ready to buy the moment you hit send.
As an early-stage startup, this is your close personal network. It often consists of your friends and family. But don’t forget your co-workers, past clients, and even your old boss.
It’s not uncommon for software-as-a-service (SaaS) startups to start as a service to increase those who are most aware of your product. Close CRM and Meet Edgar both began this way.
These customers you can be the most direct with. However, you need to make sure those direct messages do not hurt your chances with those at different awareness levels.
You should take a more direct, sales-based approach with your most aware audience.
Another approach is to segment these readers. You can do this through an email funnel by getting them to click a link. Or you can use a pay-per-click funnel by using retargeting ads.
If you’re using a sales page you can put a buy button at the top.
Contrary to popular belief, it’s easy to sell snow to Eskimos. Why? Because product-aware customers do not need an explanation of what snow is, or it’s benefits.
However, product-aware customers are not sure if the product you offer is right for them.
Customers are aware of their pain. And they likely know of your competitors. Now it’s time to show them how your product is the perfect solution.
If you want to increase the customers who buy at this stage, a strong positioning strategy is necessary.
With product-aware customers, you need to show this audience what sets you apart from the competition. Talk about your specific product features and how those features benefit these customers.
Product-aware customers know about your competitors. So using comparison keyword pages are an excellent opportunity to convert these customers.
A customer who is solution-aware knows the solution they need. Unfortunately, these customers do not know your solution will solve their problem. Or they may not know you offer a relevant solution.
Many startups that use content marketing get stuck in this stage. Their blog educate people who are unaware or problem-aware. But no one educates these customers to know they offer a relevant solution.
There are keyword phrases related to your product which you should use to educate and convert these prospects into buyers.
For example, if you have a sales CRM, you can build a page about email tracking.
These pages will convert solution-aware prospects into customers in no time.
These people experience pain. But they do not know you, or your solution.
Perhaps they came to your website by a search engine or a social media channel. They stumbled across your blog. It’s critical for these people to see the value up-front before they make a big commitment.
Content marketing is king to add value to problem-aware customers. You want to teach these customers to feel successful after reading your content.
It’s also not uncommon for problem-aware customers to want to educate themselves on pricing. This is one reason I did an SEO pricing survey. Pricing data often helps someone make a more informed buying decision.
These prospects don't realize they have a problem. Think of this audience like someone who has cancer, but a doctor has not diagnosed the issue.
The goal here is to bring traffic and nurture them through the stages.
A powerful way to do this is by bringing someone to an article you wrote. From there, create an automated email campaign to help educate them about the problem and your solution.
This stage is the hardest to get someone to become a customer.
How Do I Identify and Understand My Customer Needs and Expectations?
Let’s say you know what stage your customer is in. Will everyone buy from you who lands on your page?
Of course not. While it’s important to understand your customer’s mindset, you need to understand their needs and expectations too.
To understand your customer needs, start by looking at your existing data.
Here is a list of potential data sources:
- Customer discovery interview notes.
- Customer validation notes.
- Customer-support chat and call logs.
- Customer surveys.
- Customer reviews, both on your site and 3rd-party sites.
- Analytics, heatmaps, and customer recordings.
- Social media sites.
Once you have your data, decide what are your goals.
Let’s pretend you want to increase your website conversions. The problem is this goal is way too broad. Instead, you need to get specific where you think the issue lies.
- Are you targeting the wrong customer persona?
- Does your pricing strategy match your brand positioning strategy?
- Is your checkout process actually working?
- Are there questions your buyer’s want you to answer?
- Do your customers want a guarantee?
- Where do your customers lack confidence that your product will solve their problem?
- Is your checkout page too difficult for customers to use?
Once you have a hypothesis, look at your data to see what you can do to improve your website. If you are missing some information, write this down and decide what you need to do to get it.
Interview your customers to get better data.
Here’s a novel idea. Since your customers went through your checkout process, why not ask them what problems they saw?
Set up a few customer interviews and ask them about their buying experience. Here are a few questions you can ask:
- If you were to run our business, what is one thing you would do to make customers happier?
- Is there anything that nearly stopped you from purchasing from us? If so, please explain.
- What was your biggest fear or concern when you made your purchase from us?
- What do you like most about our startup? What is your biggest complaint?
- What could we have done to make your buying decision easier?
There are two factors you should notice about each question.
First, these are open-ended questions. This allows the customer to dive deeper into the problems.
Second, these questions ask them about their experiences. Yes, the past isn’t perfect evidence of future events. But people are even worse at predicting future behavior.
You have identified and understood your customer’s needs. Now you will decide how to use consumer psychology to change their behavior.
How Do I Use Consumer Psychology to Change a Customer’s Behavior?
At this point, you should have a list of problems, relevant data, and some potential solutions.
Before you start making and testing changes, you should prioritize your growth ideas.
One way you can do this is by using the ICE framework. ICE stands for:
- Impact. What will the impact be if this test works?
- Confidence. How confident am I that this test will work?
- Ease. How easy is it to make the changes?
Score each idea from 1 to 5 and add the numbers up. The highest score is the first test you should start.
If you have a couple of people on your team, I’d include them in this process too. Including them will increase their buy-in to your growth ideas. Furthermore, your teammates may see or know something you do not. 5 hours of developer time for one task may not have the same value as 5 hours for a second task.
Once you have prioritized your growth ideas, you will decide how you will change consumer behavior.
What Factors Influence Consumer Behavior The Most?
There is a lot involved when you want to change consumer behavior (here are several articles on consumer psychology).
To keep this simple, here are five common levers to change consumer behavior:
1. Make it understood.
If someone isn’t aware of a problem, how will they know they need to do something different?
Do you remember seeing a “glo-germ” demonstration? Someone sprinkles a powder on your hand. Then you wash with water. Using ultraviolet light, you notice your hand-washing skills are lacking.
The beginning of behavior change is to start with a trigger to make the problem known. Triggers are either external and internal.
External triggers are outside of you. This could be an email in your inbox, an alarm going off, or a notification on your iPhone. In time, these external triggers may become internal triggers as they attach to existing behaviors and emotions.
Internal triggers come from inside of you. Have you ever felt the desire to capture a moment? Instagram and Facebook benefit by tapping into this internal trigger. Or have you wished you could keep updated on your friends? Social newsfeeds use this trigger.
Internal triggers are harder to create. But they are also more powerful, especially because internal triggers are often a habit.
Whatever the trigger is, two events need to happen: a person needs to notice the trigger and believe the trigger is relevant to them.
If you’ve ever slept through an alarm, you know first-hand why you need to notice an external trigger. And if you’ve glanced at your clock when seven minutes late, you’ve experienced the power of an internal trigger.
But if you woke up to someone else’s alarm, you won’t feel the same adrenaline rush because it’s not relevant.
2. Make it easier.
People crave convenience and simplicity.
Have you noticed more products do not log you out when you close the window? Logging in takes more work. You may not notice this subtle difference. But that’s because this step makes it easier to become an internal trigger.
Want to stop watching endless videos? Make it harder by unplugging your monitor and hiding the remote batteries.
As a rule-of-thumb, the easier it is to do a task, the more likely someone will take that action.
Confidence is another key to making a task easier.
If you have run a marathon, you would be confident you can run 10 miles a week. But someone who hates running may lack confidence.
3. Make it desirable.
You and I are social creatures. There is a natural tendency to copy the lifestyles of those who we respect. And if you can tap into a social norm, it is harder to say no.
Understanding your customer’s desires is a critical part of an effective brand positioning strategy. By understanding your customer’s desires, you can relate those to your brand.
Kodak tapped into the mother’s desire to be the memory keeper. How do mom’s preserve memories? With photos.
Jif peanut butter took a different approach with mothers by focusing on their family’s health. After all, choosy moms choose Jif.
This trait also relates to social proof. For example, you can use testimonials from someone like your customer personas to increase conversions.
4. Make it rewarding.
When I was a leader at a kid’s program, the leaders gave kids rewards for completing certain tasks. As silly as it may sound, rewards (and punishments) also work on adults.
It’s common to build loyalty programs on a reward system. For example, a customer gets 100 points for every $1 they spend.
Sometimes these rewards are internal. Some websites use progress bars to reward a customer with a feeling of completion. Other websites use quizzes and reward a customer by understanding more about themselves.
Punishments are another opportunity to change consumer psychology. With a rewards program, you can remove points when someone returns an item. You can also mention that a product has a limited number available. Once the items are all bought, the person needs to wait.
You do need to be careful with how you use punishments. Doing this too much can cause someone to leave your website for good.
5. Make it a habit.
Once you have made a change, what can you do to make the change again? Or even permanent?
One experiment you should test is to increase someone’s investment in your product. This is one reason why IKEA furniture is so popular. People invest their time putting the product together. As a result, they value the product more. In fact, the name of the psychological principle is the IKEA effect. The more buy-in you create, the more someone will become hooked.
I’ve Finished Studying My Consumer’s Psychology. Now What?
As you may be aware, understanding your customers is a never-ending process.
But should you do once you have a foundation of who your customers are? You should focus on improving your product to reach product-market fit.