Consumer psychology is an interdisciplinary field examining how people interact with products, services, and ideas. Consumer behaviour psychology is a subfield examining how people make buying decisions. In short, consumer psychology is a branch of psychology that tries to understand how people act when they buy things. The main goal of consumer psychology is to understand how people think about brands, compare brands, and decide what to buy. Consumer behaviour psychologists try to understand what makes people buy or not buy certain products or services. They also try to figure out how different marketing strategies can affect how decisions are made to increase sales for companies. Studying consumer behaviour is vital because it helps marketers create more effective campaigns by showing them what makes people buy certain products or services.
Theories of how people act as consumers
The two main ways to look at consumer behaviour are behavioural and cognitive psychology. Behavioural psychology looks at people’s actions and how they respond to different things. Cognitive psychology, however, looks at what people think and feel about themselves.
Behaviourism is a branch of science that explains how people respond to environmental cues by looking at what they do. This method looks at how people respond to things that happen in their own lives and how those responses affect the choices they make in the future. The Austrian psychologist Ivan Pavlov developed it in the late 1800s and early 1900s. Cognitive pragmatism is frequently contrasted with cognitivism, the view that the only way to know what someone’s mind is like is to observe one’s thoughts and behaviour or to study the intelligence of others. According to the tenets of behaviourism, humans are autonomous, self-motivated, and driven by their basic needs to survive. Behaviourists think people are driven to reach their goals or avoid pain or frustration through rewards and punishments.
Cognitive psychology studies how people decide what to do base on how they think, learn reason, solve problems, and remember. It looks at how people decide what products or services to buy based on how their minds work. Cognitive psychology thinks of consumer behaviour as the way people decide what to do and what to buy to meet their needs. From this perspective, the significance of how individuals think is stressed. Perceptions, emotions, thoughts, and memories all play a role in a person’s decision-making process. Additionally, heuristics simplify difficult decisions so they can be made quickly.
The Importance of Consumer Psychology
Understanding how people act is vital for a company’s current and new products. Every consumer has a different way of thinking about and approaching buying a particular product. If a company needs to understand how a consumer feels about a product, there’s a good chance that the product will fail. Because of changes in fashion, technology, trends, living styles, disposable income, and real estate, consumer behaviour also changes. A marketer must be aware of the changing things so that the marketing efforts can fit. Why does how consumers make purchases matter? Several of them are discussed.
Consumer Differentiation
In marketing, customer differentiation distinguishes one consumer from another. This helps make a target group of customers whose behaviour is similar or similar. Individual customers can still be different even if you have a particular customer in mind for your business. Every group of consumers is different, and so are their needs and wants. When a marketer knows what makes each group of customers different, he can make different marketing plans for each group. Putting your customers into different groups will help you ensure your strategies meet each group’s needs. When you know how to differentiate your services for each customer, you can make them bigger and better. You will be able to help a bigger group of people better.
Design a relevant marketing programme
Knowing how people act lets you make marketing campaigns that work. Each campaign can speak directly to a different group of customers based on how people act. For instance, you should be aware of television commercials, school programming, and blogs to target parents of small children. You’ll need to tailor your communication strategy to reach each customer segment effectively. Marketers can determine what drives people to buy things by looking at how people act. Also, the same idea can be used in advertising to make people want to buy something. Marketers should also make decisions about the brand’s logo, coupons, packaging, and freebies based on how customers to act.
Competition
The most important reason to study consumer behaviour is to find out answers to some of these questions:
- Does the customer buy from a competitor of yours?
- Why does a customer buy from your competitor instead of you?
- What about your competitor’s products makes people want to buy them?
- What do your customers think is missing from your products compared to your competitors?
How to Predict Market Trends
Analyzing how people act will be the first thing to show when market trends are changing. For example, a recent trend among consumers is to buy things that are good for the environment and healthy. McDonald’s was one of many brands that noticed this changing market trend. McDonald’s added healthy food options because that’s what people wanted. By studying consumer behaviour, a company can save a lot of money that would have been used to create a product that won’t sell in the market. For example, a brand won’t waste time and money making something that won’t sell in the summer. Based on how customers act, the company chooses a way to make things that will save money.
Retaining Customers
Consumer behaviour is necessary to bring in new customers and keep the ones you already have. If customers are happy with a specific product, they will rebuy it. So, the product’s marketing should be done to make customers want to buy it again and again. So, it’s clear that getting new customers and keeping the ones you already have is very important. This can only be done if you know how people buy things and pay attention to what they do.
Improve Customer Service
Different types of customers need different levels of customer service. Knowing how your customers are different will help you give them the best service for their needs. If you run an electronics store, you can assume that high school and college students in the market for a new laptop will have a better idea of the specifications they need than a person making his first computer purchase. Your primary mission when providing service to the first set of customers will be to educate them on cutting-edge technological developments. The second set of customers will require more time to explain the product’s features, answer questions, and address concerns.
Stay relevant on the market
When the world is changing as quickly as it is right now, the biggest challenge we all face is staying relevant to our target market. And do you know what the main reason is for the rapid changes? It is a fact that our customers’ habits are constantly changing. Today’s consumers have more options and choices, so they can easily switch to a company with better products and services.
Consumer Buying Behavior in Real Estate
When it comes to , having a firm grasp of one’s target demographic and requirements is one of the most important factors to focus on. Buyers will consider various factors and examine the item to determine if it satisfies the criteria they have established for themselves for what they are looking for in a purchase before deciding whether or not to make a financial investment in it. Through years of research, it has been established that customers and their buying behaviour have distinct psychological reasoning supporting it. When salespeople and marketers have a deeper understanding of psychology, they are better equipped to devise the techniques that will be most successful when attempting to sell a product to a specific demographic of customers.
Shaun Martin, a real estate expert and owner of We Buy Houses in Denver explains, “Psychological insights aid in pinpointing problem areas. If a seller plans to target buyers with young children, the property must be free of any dangers before it can be advertised to that demographic. The psychological benefits of home ownership, such as a sense of safety and stability, may also appeal to potential purchasers. Sellers can better promote their houses to potential purchasers by gaining insight into the psyches of their intended audience.”
The usually large sums of money that are invested in the real estate market make the buying behaviour of consumers substantially more complicated than it would be in other markets. This is especially true in the case of real estate. The buyer practises heightened awareness and prudence before making any decisions on the purchase of land or the investment in some property.
Four things people think about before buying a house
If realtors try to find out and what they think about before buying a home, it will be easier to predict sales and know which buyers will be hard to work with.
Access to Necessary Amenities
The location of the property is of the utmost significance in this transaction. This impacts the ease with which potential new homeowners can access the essential amenities offered by the neighbourhood. Customers interested in purchasing real estate look for properties with desirable characteristics, such as a pleasant environment, a desirable neighbourhood, a high level of security, open areas, and proximity to medical facilities, shopping, and educational facilities. Neighborhoods and societies that, in addition to all of these benefits, provide a safe environment will be in higher demand than locations that are further removed and pose a greater risk of harm.
The Quality of the Construction
Prospective always consider the level of craftsmanship that went into creating the home structure before committing their money to purchase a piece of property. Before committing to purchasing a piece of real estate, it is reasonable to assume that the prospective buyer will want to pay a visit to the neighbourhood in question to ascertain the quality of the primary building components used in the construction of the property in question. Before making a purchase, the potential purchaser will have the ability, thanks to this measure, to form an opinion on the robustness and security of the structure. There are exits in case of fire and ventilation windows strategically placed at various points around the building. These are also additional advantages.
Financial Factors
Many people considering buying property set away a portion of each dollar they earn throughout their lives to have sufficient funds for a down payment when the time comes. When deciding to purchase real estate, they need to have the financial means to do so without sacrificing the degree of quality or the ease of use of the property they purchase. Customers interested in purchasing real estate will likely steer clear of investing their money in properties situated in regions with exceptionally high tax burdens and maintenance expenses. The fact that these procedures are uncomfortable and expensive can deter prospective customers.
Providing for the Needs of Utilities
Every person of this era has daily routines that are significantly influenced and dependent on essential utilities such as gas, water, and electricity. Everyone is affected by this in the same way. It is impossible to place an adequate amount of emphasis on the significance that real estate purchasers place on having access to and being provided with essential utilities in the properties they are investing in. This is because real estate purchasers place a high value on the property quality they invest in. Every person who is thinking about buying a house in the future wishes that these things were sold at a reasonable price throughout the year and that they were readily available.
Zhanna Sedrakyan, Director of Digital Marketing Operations at Contact Consumers says, “Having the knowledge of consumer psychology will allow you to divide your target group, craft more effective communications, and provide superior service.”
She says, “I can think of two key ways in which that would be effective: To accomplish this, you must first Learn about their lifestyle, their preferences (e.g., more room space or less kitchen space), and determine what it is that they want from their potential likeable home (e.g., if they have kids either younger or older). Advertisers may then tailor their messages to these individuals and concentrate on providing a fantastic buying experience once they have this information.”
Consumer psychology is the most important part of real estate marketing
Understanding how people think is key to turning marketing from an art into a science. With so much free data available online, it’s easier than ever to study and research consumer behaviour to help explain and predict it.
Psychology doesn’t assume anything
Have you ever been annoyed by a targeted ad for your age group and gender that had nothing to do with your life? This signifies that the marketer used demographics to divide their audience into groups. Consumer psychology is a science that teaches you how to be kind and understand how different people are. It puts gender, age, race, and social status aside and lets the person’s personality shine through. This deep understanding of people can get you into a lot of places and give you the ability to help people without them asking you directly. Isn’t that the starting point for all marketing activities? Offering a product or service that you know your customers need and presenting it in a way that will get their attention.
Get to know your customers
Marketing is all about attracting, keeping, and satisfying customers. Marketing’s job is to add value for customers so they are more likely to be interested and loyal. It manages the relationship between the brand and the individual. When we look at marketing this way, it’s easy to see how important it is to learn more about your customers than just their age or job. Psychological profiling helps brands build long-lasting relationships with their customers by talking to them in their language, using their preferred communication style, and relating to them based on their personality.
Consumer psychology importance
Every business is based on making money. This makes marketers worldwide develop strategies, spend a lot of money on data, and make new marketing plans. But most of the time, they need to remember consumer psychology, which is a vital part of making their business successful and lasting. Today, everyone is digital, and the number of digital users has grown to 2.77 billion. This means that the consumer has a million options. So, it’s not enough to know who your perfect customer is. It’s time to look into your customers’ goals and motivations to determine what makes them want to buy your place or service. After knowing that, you can figure out how they think to help your business grow.
Real estate marketing strategy based on consumer psychology
The real estate market is where people who buy and sell real estate can agree on the price of a deal and buy and sell real estate commodities. In addition to general commodities, real estate processing has fixed regional, imperfectly competitive markets and scarcity traits. Real estate marketing is the process that real estate companies use to understand, meet, and create customer needs as the center of their business and reach corporate goals and do all business activities.
Alex Walker, Senior Marketing Manager at CouponBirds advices, “Agents should try to create an experience for buyers by staging a property. Staging gives buyers a glimpse into what it would be like to live in the home and how they would use the space. By taking a consumer psychology approach to marketing, real estate agents can create an experience that resonates with potential buyers, allowing them to better connect emotionally with the property. This connection is critical for successful real estate transactions.”
The whole process of selling real estate takes time to understand. The design is linked to a lot of different fields and departments. There are a lot of people there. It takes a long period to build a house and move in, and there is a lot of uncertainty during that time. Every time a customer buys something, it’s a new experience for them, making it hard to develop marketing strategies.
Final words
A marketing strategy based on consumer psychology pays attention to both the marketing strategy and the psychological activities of the target consumers. It tries to find a balance between the two and communicates the product’s value to the target consumers by getting their approval. At the same time, the psychology of the consumer works with the product strategy makers to develop better marketing plans, which is a win-win situation.