Understanding consumer behavior—what your target customers think and feel and how they buy—helps you better market your business. Here are the top priorities today’s consumers seek every small business owner should understand.
1. Personalization. Once upon a time, you could group consumers broadly by age groups, such as the 18- to 54-year-old TV viewer. Those days are long gone. Even within demographic groups, such as millennials, Generation X, baby boomers, women or Hispanics, there are multiple subgroups that exhibit very different behavior. To capture today’s consumers, you need to understand each customer niche you cater to and target your marketing directly to their interests, needs and concerns.
2. Experiences. Consumers of all age groups are placing value on experiences over things. More than half of customers in a McKinsey survey say if they had extra income (after buying necessities) they would spend it on vacations, while over 40 percent would spend the extra money on entertainment and/or eating in restaurants. This is good news if you sell experiences. However, if you sell products, you’ll need to provide a customer experience that’s exciting enough to separate shoppers from their dollars.
3. Savings. The Great Recession may be over, but it forever changed the way consumers buy. Shoppers simply expect competitive pricing, discounts and deals, according to Mintel’s North America 17 Consumer Trends report. Sales, promotions and coupons will all resonate with consumers. To encourage repeat customers, set up loyalty programs that let you tailor offers to customers’ past purchasing behavior.
4. Convenience. Sure, consumers want to save money, but they also want to save time. Speed and convenience are now baseline expectations when shopping. Many consumers are more willing to spend extra for products or services that make their lives easier. Promote ways your business can help consumers save time, spend more time with their families or get something done more efficiently.
5. Authenticity. Euromonitor says today's “new consumer” has replaced conspicuous consumption with conscious consumption. Consumers want to do business with companies that share their values. For many, environmental sustainability and authenticity are key deciding factors in their purchasing behaviors.
6. Transparency. Consumers expect the companies they do business with to be ethical and open about their business practices, whether that’s how they treat their employees or where the materials for their products are sourced.
7. Little luxuries. Overall, consumers are still counting their pennies when it comes to product purchases—but there are a few key areas where they are more likely to be “trading up.” McKinsey says consumers are willing to spend more money for premium products, particularly on alcoholic beverages and personal-care products. More than half of consumers in Nielsen’s Global Premiumization Report say buying premium goods makes them feel good; half say it makes them feel confident. Millennials, in particular, prefer premium products.
8. Self-directed shopping. Consumers are relying less on salespeople and advertising to guide their purchasing. Two-thirds (66 percent) of consumers in a Deloitte study say they prefer a self-directed shopping journey, up from 30 percent in 2014. Fewer than 30 percent say advertising influences their purchasing, compared to 70 percent in 2014. Don’t worry: You can still influence consumers. You just need to alter your tactics a bit and use social media, search engine optimization and online reviews to capture their attention throughout their shopping journey.
9. A mobile-first experience. Mobile devices and especially mobile search have become essential to the shopping experience. Even among non-millennials, 78 percent use digital devices multiple times during the average shopping trip, Deloitte says. With all age groups searching, browsing and buying on mobile devices, and Google using mobile-friendliness as part of determining a website’s page rank, a mobile-first business website is a must.
About Rieva Lesonsky
Rieva Lesonsky is CEO and Co-founder of GrowBiz Media, a custom content and media company focusing on small business and entrepreneurship, and the blog SmallBizDaily.com. A nationally known speaker and authority on entrepreneurship, Rieva has been covering America’s entrepreneurs for more than 30 years. Before co-founding GrowBiz Media, Lesonsky was the long-time Editorial Director of Entrepreneur Magazine. Lesonsky has appeared on hundreds of radio shows and numerous local and national television programs, including the Today Show, Good Morning America, CNN, The Martha Stewart Show and Oprah.Lesonsky regularly writes about small business for numerous websites and for corporations targeting entrepreneurs. Many organizations have recognized Lesonsky for her tireless devotion to helping entrepreneurs. She served on the Small Business Administration’s National Advisory Council for six years, was honored by the SBA as a Small Business Media Advocate and a Woman in Business Advocate, and received the prestigious Lou Campanelli award from SCORE. She is a long-time member of the Business Journalists Hall of Fame.
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