Your customers are rational thinkers who know what they need, research to learn about their options, and make informed, practical decisions about what to buy… right? Well, not always.
Though this is the traditional ‘customer journey’ most business books rely on, the real-life actions of customers don’t always take such a straightforward, logical path.
Understanding the facts about customer behavior is key to making sound strategic decisions in your business and communicating with your customers effectively.
In this post, we’re discussing five commonly held misconceptions about customer behavior and uncovering what the research has to say about what customers actually want.
Myth #1: Customers know what they want
Gathering customer feedback is a key part of developing effective products, especially when it comes to customers’ problems and the solutions to them. If you ask customers broadly what they want, however, most people are notoriously bad at providing an accurate answer.
Take, for example, blind taste tests of popular soda brands. Testers consistently report different opinions about the drinks when they know which brand they’re consuming versus when they don’t. This demonstrates how a brand’s image has a major influence on a customer’s perceived wants.
The way a product is presented also has a big impact on how desirable a customer thinks it is (as opposed to gauging desirability on the product’s merits alone). This is known as framing. When an offer is framed in a positive context, like “claim your free gift!” people are less likely to respond than when it’s framed in a negative context, like “don’t miss out on your free gift!”
And there are other factors still, like likability and familiarity, that can influence a —customer’s decisions beyond what’s rational.
All of this tells us purchasing decisions aren’t nearly as rational as we—or the customer themself—might think. So, building brand familiarity and framing your offer properly is crucial if you want to overcome this unpredictable behavior.
Myth #2: Customers don’t want to be upsold
If you asked around, most people would probably tell you they don’t like ads or promotions. And yet, customer behavior tells us otherwise—another great example of people not knowing what they want!
In reality, customers respond exceptionally well to marketing, sales, and upsells when it’s targeted. In a survey of 8,000 —customers, Accenture found that 91% of people were more likely to shop with a brand that provided offers and recommendations that were tailored to them, while 83% were willing to share their closely guarded personal information to get such a tailored experience.
We can leverage this knowledge and create highly effective marketing campaigns that —customers enjoy by personalizing our message to the audience that’s receiving it.
Myth #3: Customers want more choices
On the surface, having more choices seems like a good thing. The more options you give your customers, you might reason, the more closely you can serve their exact needs. Though, when it comes to—customer behavior, satisfaction almost always has an inverse relationship with the number of available options. This is known as the paradox of choice.
Life is complicated. Humans are forced to make countless decisions in the course of any given day. Though—customers want to feel like they are in control via a purchasing decision, they’re quickly turned off by the complexities of having too many options to choose from.
We can provide the sense of control—customers desire while minimizing decision fatigue by providing fewer options and an “obvious” choice among them. It’s the reason so many SaaS companies offer three service tiers: a high, low, and middle option. The middle option provides both function and value—a wise and easy choice that leaves customers feeling like they’ve picked a winner.
Myth #4: There’s a ceiling to how much people will pay
Customer behavior surrounding price is a phenomenon that goes against all logical reasoning. Rather than being determined by market factors, like supply and demand, or product-specific factors, like features, much of what a customer is willing to pay for a product comes down to psychology.
Anchoring is one such example. This is a behavioral occurrence where the first price a customer sees when considering a product or service sets the expectation not only for that purchase but for all future purchases in that category (like dropping an anchor). Knowing this, we can benefit by setting a premium price from the first interaction rather than leading with a discount.
Re-framing is another strategy. In this scenario, a price is reframed in a more palatable way, like offering a $100 annual subscription for “just $9 a month!” The second offer sounds more affordable, despite actually amounting to a few bucks more.
The common denominator is that it’s not so much about the price itself as it is about how customers feel about the price. We can capitalize on this by clearly conveying the fairness, value, and comparative advantage of our pricing in our customer communications. Using digital channels like SMS to send deal alerts or special pricing notifications is a great way to drum up excitement while creating a sense of novelty.
Myth #5: Customers want help deciding what to buy
If you’re in the business of selling a product or service, you’ve probably heard the acronym ABC: always be closing. This was good advice for the traditional sales model in which buyers would speak with a sales rep, confer with other stakeholders, come back to the sales rep for further questions, and ultimately make a decision. Over the last decade, however, the sales process has seen a seismic shift away from the sales rep model.
A new generation of buyers is increasingly wary of salespeople. Thanks to the rise of digital sales channels, very little of a buyer’s time is spent communicating with potential suppliers—it accounts for just 17% of their overall buying activities. Instead, today’s customer spends the largest portion of their time—close to half of it—doing independent research about what to buy and who to buy it from.
This doesn’t necessarily mean customers don’t need help making purchasing decisions, just that they prefer to arrive at those decisions independently. It’s up to business leaders to make unique value propositions abundantly clear and provide ample multichannel opportunities for prospective customers to reach support when and where they want to.
Armed with a better understanding of your customers’ behavior, you can create personalized, omnichannel communication strategies that are built for the future rather than bogged down by myths of the past.