Decoding Consumer Behavior: Understanding What Makes Your Customers Tick Marketeers who tap into the psychological aspects of consumer behavior can connect with their target audience on a deeper level, drive conversions, and build a loyal customer base that will help their business thrive.

Have a quick look around you. What you might notice is the sheer volume of items that are not there because they are needed. They are present because they were wanted at the time when they were bought. But what makes us buy things that we don't necessarily need- and how do we respond to various marketing touch points on our journey to the check out? Here's an explainer:

1/ OUR PERCEPTION OF PRICE DEPENDS ON HOW IT'S PRESENTED TO US Price might seem like a perfectly logical element as it's quantified; however, there is so much more to how we see it. Imagine you are in a restaurant, and you are choosing a bottle of wine. Based on your taste, the waiter presents two premium wine options: Wine A at GBP50 per bottle, and Wine B at GBP40 per bottle. The initial price sets the reference point for the value of wines on the menu, and even though Wine B is still a premium wine, the presence of Wine A influences our perception of its value.

But then, the waiter introduces Wine C, the house wine priced GBP30 per bottle. At this point, however, you already established the price for Wine A as a higher anchor, and as a result even though Wine C might be a great option on its own, you perceive it as less attractive. And that's because Wine A's higher price tag makes Wine B seem more affordable by comparison. Another usual trick our brain plays on us is how we see prices ending with number 9. Also known as the left digit effect, we tend to focus more on the leftmost digit of a numerical value when making decisions. This leads us to perceive prices ending in lower digits such as GBP99.99 as significantly lower than prices with higher leftmost digits such as GBP100.00, even when there is very little difference. In addition, we associate prices ending in 9 with discounts, promotions, or sales, leading us to perceive the product as a better deal, compared to similar items priced at rounded numbers.

2/ WE ARE IMPACTED BY REVIEWS AND RECOMMENDATIONS Have you ever looked at hotel ratings when booking a holiday? And did positive or negative comments from previous guest impact your decision? There is a good reason why most e-shops include information on customer rating, or the number of people who bought the same products over the last period and. By default, we look to the actions and choices of others to determine our own behavior. This is because we believe that if others are doing something, it must be the right thing to do. This social proof can be presented in various forms, including positive reviews and ratings from other customers, testimonials that talk about a product or service's quality, influencers promoting a product or cause, or metrics such as follower counts, subscribers, and views on social media or video-sharing platforms. When we see that others had positive experiences, we are more likely to trust their judgement, and we feel more confident in making the purchase. This positive social proof reduces risk, and reassures us about the quality and reliability of the product or service, as well as triggers fear of missing out on products that others are already enjoying, and therefore creates a sense of aspiration.

3/ WE WANT TO FEEL VALUED Imagine walking into a shop where they know your name, or receiving an email with recommendations based on your past purchases. If the person or sender on the other side understands your preferences and interests, you are more likely to feel valued as a customer, and therefore more likely to buy from them. A personalized approach, whether that's online or offline, enhances our shopping experience, and fosters a sense of connection and loyalty. If we feel that the seller knows us, we are more likely to positively respond to suggestions on complementary products based on our previous purchases or products that other shoppers with similar preferences enjoy. What's more, based on the seller's recommendations, we might find ourselves discovering new products and brands that we would have not known otherwise, expanding our horizons- and the size of our shopping basket.

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4/ WE ARE DRIVEN BY SCARCITY AND URGENCY When was the last time you bought a product in a limited-time sale? Or felt like you needed to make a buying decision quickly because the clock was ticking? If we are presented with an opportunity to buy something that is only available for a limited period, whilst mentioning that there are only limited quantities available, we are more likely to act. Scarcity and urgency create a sense of exclusivity and value, and trigger our fear of missing out (FOMO). When we believe that a product or sale is limited in availability or duration, we might experience regret at the thought of not taking advantage of it, and feel more curious and interested in the offering– as a result, we are more motivated to explore the product, and to consider buying it. Scarcity and urgency exploit our innate desire for instant gratification. As humans, we are wired to seek immediate rewards, and avoid delayed gratification whenever possible. When we see an offer that is only available for a short period of time, our brain interprets it as a fleeting opportunity for instant gratification, compelling us to seize the moment, and make a purchase- before it's too late.

5/ WE SUBCONSCIOUSLY NOTICE PRODUCTS MORE WHEN WE ARE INTERESTED IN THEM When we learn about something new or become aware of a particular brand or product, we often start noticing it everywhere around us. It gives us the impression that the product we just learned about has suddenly become more common or prevalent, even though it hasn't increased in frequency. What happens is that after our initial exposure, we become aware of this new product, and it sticks in our memory. We might start thinking about it, or even researching it further. Once we become aware, our brain begins to unconsciously prioritize it. This means that we start noticing it more often in our everyday life. It seems like it's suddenly everywhere, and we may even think that its presence has genuinely increased. But the frequency of the product we have become aware of hasn't changed. What has changed is our perception and attention towards it- our brain is now more attuned to recognizing it, making it appear as though it's occurring more frequently. And as a result, we often feel that it's a sign to buy it! As shoppers, we are constantly navigating a complex web of influences that shape our buying decisions, and by gaining a deeper understanding of what leads to these decisions, we can become more mindful shoppers.

So, the next time you find yourself reaching for that impulse purchase, or hesitating over a decision to buy, take a moment to consider the factors at play behind your choices before heading to checkout. Incorporating consumer psychology into your marketing strategies doesn't require a large budget. Yet, understanding what makes your customers tick, and using that knowledge to create a more compelling and customer-centric experience is a strategic advantage. Marketeers who tap into the psychological aspects of consumer behaviour can connect with their target audience on a deeper level, drive conversions, and build a loyal customer base that will help their business thrive.

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