How to Identify the Factors that Influence Customer Purchase Decisions
With the market being saturated and businesses vying for the same customers you have, knowing the factors buyers’ take into consideration before actually making the purchase is an essential upper hand.
1. Understand customer journeys using personas
What will make customer X go from clicking “add to cart” to “buy”? In order to properly communicate, you need to know who you’re talking to. What are your different customer segments? What personas are they? These two terms are often interchanged or used synonymously by marketers, but we define them differently. You can read more about it here.
Personas bring your customer segmentation to life and enable you to look at customers as individuals and not just statistics. Personas also help you to focus on which customers are the most valuable, which is also where your loyalty and retention efforts should be focused. What program benefits, experiences, and rewards would better serve your most valuable customers?
If you don’t have personas developed, use the data you already have — historical survey response data and customer satisfaction scores are great places to start. Creating personas doesn’t have to be a hard or a month-long process either. Just start with the 2–3 main types of customers you know you have. If you sell nutritional supplements, for instance, you likely have a homeopathic/healthy eating customer, a fitness-minded/heavy exerciser customer, and a customer who wants the basics covered — a good vitamin, a probiotic, and maybe a few other products to round out their regime. Think about what each customer needs from you, then look hard at your online and offline communication strategy, your digital ads, how you showcase products from the customers’ perspective, and make sure you’ve got the basics nailed.
2. It’s about real interactions, not spend
Don’t be stingy with your ad spend especially when it comes to connecting with your most valuable and most loyal customers. Why? Because these customers tend to self-select into loyalty programs. Sure, every program has members who are just looking for a good deal, but most customers participate in a program because they choose you over your competitors and want to be recognized and rewarded for their loyalty. It’s never a waste when you reinforce the notion that you recognize that this is a relationship of choice, not an obligation.
These members chose your brand for a reason — remind them of those reasons, and remember that every email shouldn’t be promotional in nature. Take stock of the communications that members are receiving and ensure the core message is providing value to the customer. Are loyalty members rating their customer service experiences as satisfactory or above? Don’t be afraid to send a straight-up thank you for the last purchase or visit.
3. Ask members what they want
One-sided communication in a relationship is never effective — this also applies to your relationship with your customers! Find out what members need from you, not what you want to give them. Don’t make the mistake of relying on a set of predetermined strategies from last year. It’s a new day! Your customers’ needs are always changing.
Make it easy for members to provide feedback, whether through a timely post-purchase survey, an email to members asking for their input, gathering information relayed to employees, or having your business post a question on your social media. Look for recurring themes that you can translate into new program elements or updates. Use this time to re-examine the finer details of your loyalty program. Take a closer look at rewards and customer interactions from the perspectives of your best customers and members.
Now that you have all the data ready, it’s time to segment that and use them to create actionable communication and business plans. Data-driven customer segmentation helps improve your marketing campaigns and optimize your content according to the customer’s preferences, attitudes, and past behaviors. It allows for unique opportunities that would not have been noticed otherwise.
Advantages of data-driven customer segmentation
Data-driven segmentation allows you to divide your customers based on different variables, including preferences, priorities, and desires. Data about their activities and purchases can give you key insights into approaching them. Different people have different needs. For instance, advertising a shampoo for curly hair to a person with straight hair would generate no results. Data-driven segmentation allows you to cluster your audience and target them appropriately. It also helps you develop a personal relationship with each group, improving customer loyalty and trust.
Through segmentation, you can target your customers differently. It allows you to devise plans and strategies specifically for a group giving you a higher chance of improving your business performance. You can offer promotions and exclusive offers based on the preferences of each cluster.
Further, data segmentation also helps you understand the overall dynamics of the market. It gives you an idea of the type of product your customers are interested in. You get to “know” your audience and customize your campaigns to improve engagement and generate leads. Additionally, mass customizations can also improve customer satisfaction levels by providing them tailored services.
Businesses that utilize customer segmentation are 2.3 times more likely to research the motivations of their buyers and 1.6 times more likely to understand the fears and challenges their buyers face.
The process helps in optimizing spend as well. By getting insights, you can save thousands of dollars from running the wrong campaigns. That is, you will not have to run advertisements for people who will not engage with your brand. Data segmentation can also keep you focused and goal-oriented. Through analytics and engagement scores, you can know what products would perform well in the market. Therefore, it improves your investments by helping you allocate resources to processes that would yield better results.
Data-driven segmentation is currently employed by several companies worldwide. And if you aren’t doing it, your sales can be left behind. A good data-driven customer segmentation tool, like VIEWN’s, plays a major role in retaining customers through look-alikes and improving profitability, improving your product’s perceived value, improving the effectiveness of your business processes, and help you grow.