What is customer behavior research? What are the methods?

What is customer behavior research?

Customer behavior includes customer psychologies such as thinking, feeling, responses to products/services and all customer activities in the consumer process such as purchasing, using or discontinuing the product.

Customer behavior studies are all behaviors of an individual related to decision making and are subject to various factors influenced by internal or external environment such as advertising, recommendations from people who have experienced products/services, price information, new trends, etc.

And these factors can identify consumer activities in the customer experience roadmap below.

Customer Experience Roadmap

The above customer experience map is divided into 5 stages as follows:

• Recognize a need

A customer's purchase journey begins when they have a demand related to a product/service. When the desire reaches a certain peak, the customer will form an impulse to act to fulfill his or her wish.

• Search for information

Customers search for information related to products/services that meet their needs from a variety of sources such as personal information (review from others, introduction from family), empirical information (by customers themselves who have experienced the conclusion), commercial information (advertising, product information, news from websites, etc.), etc.

• Evaluate options

During the customer journey, this is the period when they consider and evaluate products from different brands to choose the product that best suits them.

• Purchase decision and purchase action

Make a purchase decision and proceed with the purchase. At this stage, there are 2 main factors that influence the behavior of customers are the attitude of others and the unexpected situation.

• Post-purchase reaction

This is the final stage of the customer experience model. At this stage, the customer's feelings and reactions to the service product will form and affect the next purchase decision.

Why study customer behavior?

The era of integration with the competitive market is getting more intense, customer needs are always changing and they have more different options to compare. Researching customer behavior will help businesses understand and correct the psychologies, decisions and factors that influence customer decisions, thereby building a customer experience that helps promote shopping.

Some of the following benefits when studying customer experience behavior and design:

• Target the right prospect
  Proper identification of potential customers is an important activity in any business, determining the effectiveness of marketing campaigns and business activities. To do this, in addition to studying the market, you need to study customer behavior thoroughly to find a group of customers whose needs, behaviors, and personalities match the characteristics of the product and business goals of the business.

• Personalize the customer experience

• Optimize campaigns

Data collected through customer behavior studies is an important foundation for effective marketing campaigns. Through customer clustering, delivering messages to the right target and at the right time will help you increase your access, customer interaction, and customer transformation. In addition, knowing and understanding the factors affecting purchasing decisions will help you make good predictions and plan to adjust to appropriate responses to situations when customers change their purchasing decisions. From there, you can create an appropriate customer experience process.

• Keep customers productive

By studying customer behavior, you will learn about things that customers really want and don't want, from which there are appropriate solutions to remove obstacles in the procurement process and encourage them to use products/services. According to a study by Brain & Company, if you can increase your customers' retention rate to 5 percent, corporate profits will increase from 25 to 95 percent.

Factors Affecting Customer Behavior

One of the activities to be done in the customer behavior study is to identify the factors that influence the customer's consumption behavior. Consumer behavior is influenced by both internal and external factors such as:

Cultural factor

• Culture: is an important factor that needs to be analyzed in every undefined market entry campaign. Knowing the characteristics of each culture and choosing according to your business goals helps you communicate the campaign's message more effectively.
• Community culture: are communities of people who are similar in their lifestyles, ethical standards, behaviors, etc. that coexist in a country. Identifying cultural groups helps businesses group customers and personalize them better.

Social element

• Communities: is a way of promoting products/services among communities of people by word of mouth. This is a method that greatly affects the behavior of customers.
• Social networking: is the platform where users connect to each other through the Internet. Through this channel, people can freely express their opinions and opinions freely with a large amount of traffic and interaction. Therefore, this is a potential channel that is being focused on researching customer behavior.
• The social class: a hierarchy of status among groups of people. People of different social classes will have different behaviors and needs for a product/service.
• Family: each family member can have words, actions that directly or indirectly affect the behavior of the customer.
• Position: Customers tend to choose products/services that represent their status with different roles.

Personal element

• Age: at different ages, customers will have different needs for products/services.
• Gender: consumption needs of products will vary and match their gender.
• Career: In proportion to the nature of each profession, customers will tend to consume the appropriate product.
• Personality and appearance: depending on the habitat, different personalities will be formed and therefore their shopping needs will vary as well. For example, people with generous personality do not pay much attention to the price of the product. In addition, the appearance factor will determine the products that customers choose according to their appearance.
• Lifestyle: this is a form factor based on self-disciplined experiences, insights, personal characteristics. Because each element of it is different for each person, so the consumption behavior is also different.

Psychological factor

• Motivation: is the urge for customers to take action after the demand for products/services has been formed. This motivation can be to meet the essential needs, desire to be individualistic, want to experience, etc. From there, lead to actions in the procurement process.
• Awareness: is the process of selecting customer information, consisting of 3 states: selective attention (only paying attention to the product/service that the customer is interested in), selective decoding (interpreting the information they received) and selective memorization (remembering the good characteristics of the products they use and often disregarding the good characteristics of others).
• Subject: things that are self-contained based on life experience.
• Belief: is a way of thinking that helps guide all the activities of the customer himself.
• Attitudes: how to react to all experiences, situations that happen in life.

Methods of studying customer behavior

Customer behavior study is a process that requires careful and detailed planning. In order to implement the plan effectively, the selection of the right and appropriate method is indispensable.

Qualitative customer behavior study methodology

Qualitative research is about you asking in-depth open questions from labels to customers to delve into psychology, most truthfully reflecting customers' feelings, wishes, motivations and behaviors toward products/services. After implementation, you will be able to answer questions such as "Why do customers choose service products?", "What factors affect customers' shopping behavior?", etc.

There are three main types of research methods:

• Focus Group

Focus Group or focus group is a method of interviewing the group by bringing researchers together and discussing a defined topic, usually between 6 and 10 people. The group is operated smoothly and takes place under the supervision of a censor to provide opinions and solutions to a problem.

Implementing this method will help you get valuable feedback as well as helpful advice. However, this method is expensive to invite researchers and hold a meeting. In addition, receiving mixed opinions and heated debates is inevitable if the supervisor does not have a satisfactory solution.

• One-on-one interview

It's a method in which researchers ask open questions to customers to collect data from them. This helps you get instant survey feedback with high value information.

However, this approach requires a high level of expertise in asking questions that meet the objectives of the study. Therefore, this is a method that costs the time and effort of the business, even you have to do interviews many times with many people to get the results as desired.

• Content analysis, context

Contextual analysis is the analysis of social life by researchers by deciphering words and images from available documents. This method is often applied based on social media – where users connect and interact with each other the most, thereby drawing conclusions about customer behavior.

This method is useful in obtaining valuable information quickly. However, the market is always changing, and this approach is not optimal in information collection when the business' goal is to target customer behavior studies for the products/services it is providing.

Quantitative customer behavior study methodology

This is a method of drawing conclusions about customer behavior by analyzing information on a database and data collected from customers. These data can be collected based on two main sources:

Secondary data source

This is an available source of data that can be found on its own such as scientific research papers, reports from the General Statistical Office, performance results, research of enterprises, non-profit organizations, etc.

Primary data source

Primary sources of data are analyses from the enterprise itself through conducting customer behavior surveys.

• Some notes when preparing a customer survey

• Identifying the appropriate number of targets: Customer needs and behaviors are always variable, so incorporating too many goals into a single study results in data errors and undesirable results.

• Design a questionnaire appropriate to the target audience: The topic of the study as well as the target customer survey scenario should be identified in accordance with the business objectives set out. Therefore, it is very important to correctly identify the user for the survey to collect data on the correct topic of study.

• The questionnaire needs to be concise, simple and easy to understand.

Conclusion: Researching customer behavior helps enterprises to correctly identify target customers and effectively evaluate marketing campaigns that are carried out effectively.