Skip to content
Graphic of a credit card hovering near a smartphone with a receipt coming out of its screen

4 Ways to Understand Consumer Behaviour Through Data-Driven Marketing

Perri Robinson

Mar 29, 2022

Once upon a time, marketers relied on experience and intuition to understand their customers. Using insights from research methods like focus groups and polls, they built customer profiles to predict how their products would perform against their competition in the marketplace. These days, you still need to understand the complexities of consumer behaviour to create a successful customer journey. But now, more up-to-date, sophisticated consumer research methods are in play. This is especially true since Facebook, Amazon, and Netflix came into the fold and showed how data-driven marketing substantially increases gains. 

image of an ipad with the netflix app open next to a bowl of popcorn

Take personalisation as one example. According to market research firm Invespcro, marketing firms that exceed their revenue goals apply personalisation methods 83% of the time. Plus, businesses that use data-driven personalisation methods reported between five and eight times the return on investment (ROI) on their marketing budgets. 

So what does this all mean? It's time for your business to use customer data to get a better sense of your customers. In this blog, we'll get into four ways to understand consumer behaviour using data-driven marketing. First, let's take a closer look at what consumer behaviour is. 

Table of Contents

Consumer Behaviour Definition

What is consumer behaviour, exactly? In a nutshell, the term "consumer behaviour" refers to how people think, act, feel, and make decisions when they buy something. It also describes a field of study that uses marketing, economics, psychology, and other social sciences to analyse the processes consumers go through when they buy something.

5 Factors That Influence Buyer Behaviour

Humans are complex beings; understanding why we act the way we do is no easy task. When it comes to consumer decision-making, many internal and external elements come into play when we decide what and what not to buy. For a quick overview, here are five major factors that influence consumer behaviour, which you'll sometimes see called buyer behaviour.

1. Psychological Factors

Psychological factors include personality, perceptions, well-being, self-esteem, and beliefs. They aren't easy to measure, but they can play a huge role in influencing a customer's decision process and purchasing decisions. For example, a person who values or is motivated by belonging to a family unit will have different buyer behaviours than a person who is motivated by self-reliance and independence.

2. Personal Factors

Personal factors can be everything from demographic qualities — like gender, occupation, and location — to more lifestyle-based qualities — like hobbies and daily routine. One example of a personal factor is age and generation. For example, Baby Boomer and Gen Z shoppers generally have different buying behaviours that call for different marketing strategies.

3. Social Factors

A consumers' cultural background and social networks — the people they regularly have face-to-face interactions with — can influence their buying behaviour and processes. What's a consumer's most influential social factor? Many researchers believe it is family. Some have even looked into how families pass brand loyalty down through generations.

4. Economic Factors

A consumer's socio-economic situation and social class also impact their behaviour. Personal income, family income, and credit can all affect what a person chooses to buy. On a larger scale, when an economy is thriving, customers have more purchasing power for new products, both basic and luxury items. On the other hand, a weak economy can lead to less purchasing power. 

5. Situational Factors

From brick-and-mortar stores to online marketplaces, the environment and circumstances consumers find themselves in when they make a purchase decision are situational factors. One common situational factor marketers take advantage of is holidays when many consumers aren't working and have more time to shop. Other factors, like mindset, mood, and attitude, are more personal (but equally influential) situational factors. 

lots of people crossing the road

What Is Consumer Behaviour Theory?

Consumer behaviour theories model and classify how people make purchase decisions. Businesses and marketers use these theories to better understand and predict when and why their customers will make a purchase. 

Consumer Behaviour Models

Consumer behaviour researchers have developed multiple models that businesses and marketers use to classify consumer behaviour. Some of the traditional consumer behaviour models, which are based on unconscious consumer desires, include the:

  • Psychoanalytic Model, which explains that consumers' motivations, ambitions, desires, and fears are the foundation for their purchase decisions.
  • Sociological Model, which says that purchases are influenced by a consumer's place within different social groups and communities.

There are also contemporary consumer behaviour models that see purchase decisions as the result of conscious, decision-making processes. Some are:

  • Reasoned Action Theory, which states that consumers are motivated by the results they expect a particular product or service to deliver.
  • Motivation-Need Theory, which explains how consumers make purchase decisions to satisfy a hierarchy of needs.
  • Impulse Buying Theory, which explains how human impulse and external factors lead consumers to make purchases.
person pinning a black thread on white and blue paper on a board

How to Understand Consumer Behaviour with Data-Driven Marketing

Now that we have our basics covered, here are four ways data-driven marketing can help you understand consumer behaviour.

1. Do a consumer behavioural analysis

A behavioural analysis can teach you a lot about how consumers behave and interact with your product or brand. You might end up zeroing in on the specific, influencing factors that come into play when they make buying decisions involving your brand. Start with a behavioural segmentation of your audience and go from there. Determine why each audience segment turns to your brand and compare that against internal quantitative data like newsletter subscriptions and third-party data like product reviews. Use your findings to improve your brand's customer journey and bring new buyers into the fold. 

Tip: Think about your CDM (customer data management) to gain more actionable insights from your data.

Behavioural segmentation definition:

Behavioural segmentation is the process of classifying and sorting consumers into distinct groups of different types. In other words, consumer behavioural segmentation means grouping your audience by different behavioural patterns.

Examples of behavioural patterns:

Some different behavioural patterns you can use for audience and customer segmentation are:

  • Purchasing behaviour, which is often divided into four subgroups: complex, variety-seeking, dissonance-reducing, and habitual
  • Usage, which can include how consumers use your product or service, as well as how often and for how much time
  • Occasion purchasing, which looks at whether consumers purchase the product or service habitually, seasonally, or at particular stages in their lives
  • Customer journey stage refers to the customer's time interacting with your brand or company
  • Customer loyalty, looking at where in that customer journey stage a buyer develops brand loyalty

2. Use social listening to track consumer buying behaviour

How are your customers and potential customers talking about your company online? How often and in what contexts does your brand come up? What do customers have to say about your company, brand, or product pre-purchase and post-purchase? Resources like Meltwater's social media monitoring tool can help you answer these and other questions to learn more about the conversations your audience has about your business.

open laptop on a desk with data analytics on the screen

3. Get advanced audience insights

Along with social media, review sites, message boards, forums, blogs, videos, podcasts, comments sections, and other channels are full of insights about your customers and customer journey. Extracting and analysing data from those channels will get you actionable insights you can use to optimize that customer journey. Since all of these channels are constantly in flux, gathering this valuable data can be a process. Here's another area where consumer insights tools like the Meltwater's AI-enabled consumer insights solutions can get you a deeper understanding of your audience segments and motivations.

screenshot of Meltwater Audiense tool

Using the Consumer Insights tool provided by Meltwater or the Meltwater Consumer Intelligence Suite, brands can search for keywords and terms to establish a consumer group that engages with that topic the most. Breaking it down by factors such as gender, age group, and related interests gives marketers data-driven insights into who their audiences are and how they behave, well as their psychological qualities like personality types and values. 

4. Apply data from one marketing channel to another

Dig deeper into what's currently working on your go-to marketing channels. You may gain insights that you can then apply elsewhere. For example, if you find that you have more engagement on your social media posts at noon when people are eating their lunch, you could schedule an email blast for that same time to capture more of that audience. Whether or not the change gets more clicks, you'll still learn more about your email audience.

Customer behaviour is evolving all the time. Your business needs to understand it to effectively communicate with consumers making a purchase decision. Optimizing your online and in-store customer journeys sets you and your audience up for success. To learn more about how Meltwater's solutions can unlock the consumer insights you need to achieve your goals, fill out the form below.