Factors that Influence Customer Behaviour and Responses

Personal, Social, Cultural and Psychological Factors that Influence Customer Behaviour and Responses

Lecturer Broadcast

Click here to view an explanation about factors impacting on customer behaviour.

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Explanation by lecturer Johan Kleingeld from Edge Consulting, an expert on customer service.

Consumer buying behaviour refers to the buying behaviour of the ultimate consumer. Many factors, specifics, and characteristics influence the individual in what he/she is and the consumer in his/her decision-making process, shopping habits, purchasing behaviour, the brands he/she buys or the retailers he/she goes to. A purchase decision is the result of each and every one of these factors. An individual and a consumer are led by their culture, subculture, social class, membership groups, family, personality, psychological factors, etc. and are influenced by cultural trends as well as social and societal environment. By identifying and understanding the factors that influence their customers, brands have the opportunity to develop a strategy, a marketing message (Unique Value Proposition) and advertising campaigns more efficient and more in line with the needs and ways of thinking about their target consumers; a real asset to better meet the needs of customers and increase sales.

Wooing customers is a little bit like dating. No, you can't present the engagement ring on your first date! There's a two-way relationship that grows a step at a time before it leads to the church doors. You can't rush it... you can't skip it... that is, if you're looking for the satisfaction of a life-long commitment.

Getting to know your date or getting to know your customer takes a little time and effort. The personality likes and dislikes of each date are different, but customers share some commonalities that you, the marketer, can take hold of. Give them what they want, and they'll become the loyal, life-time customers that make your business prosper.

Forget About Selling... Put the Emphasis on Buying

People like to think that all of their buying decisions were reached due to their own great ideas and skilful shopping. Hey, no one is fond of a pushy salesman. A salesman who HELPS them discovers the best buy for their money, on the other hand, is a hero.

Really, when a person walks into your place of business, they are most likely thinking of making a purchase before they get there. You don’t have to persuade them to buy. You can take it easy, and simply help them decide what the best purchase is.

Keep your focus on the customer and his needs. Think... what benefits would he be most interested in? What is the price range he can afford? Basically, keep in mind that you are there to serve his needs, not persuade him. Ah, the pressure’s off!

Make Purchasing a "Sure Bet"

Buying is a risky business. The higher the price tag, the higher the risk! Yep, a customer is just looking for a product that satisfies the needs he purchased it for. The question they ask themselves is... “Is it worth it?”

Hey, it’s a legitimate question. The world is full of scams where you spend your hard-earned cash and end up with trash that doesn’t last and that you can’t get serviced. A few tough lessons leave customers wary about off-the-cuff purchases. They want something they can trust.

A money-back guarantee alleviates a great amount of concern in the mind of the consumer. There’s peace in knowing that if the product doesn’t live up to its claims, they aren’t stuck footing the bill for a piece of junk.

Customer testimonials also clearly tell would-be buyers that you really do deliver customer satisfaction. No one can say it better than a satisfied customer – just make sure customer testimonials are authentic and credible.

Let Them Know that it is as Quick and Easy as 1, 2, 3

Simplicity... ah, it makes life so much easier. Convenience stores testify to the fact that quick and easy often override a better price!

Make the buying process as simple as you possibly can. Remember that not everyone prefers the same method. The more options you have available, the more customers you will please.

When you’re planning your marketing campaign, don’t forget to point out the quick, fast, and easy benefits of your product. Remember that value isn’t everything.

It's pretty easy to charm your customers when you know what they like! Keep these three tactics in mind as you go about the daunting task of growing your business and expanding your customer list... and watch your profits go through the roof.

Personal Factors

Age influences a buyer’s decision. The need for different products and services changes with age. Babies and children have special needs for products such as milk powder, baby foods and toys. Young adults need clothes, recreational and educational facilities, transportation and a host of other age- and fashion-related consumption needs.

Gender, i.e. differences between men and women, results in different consumption needs. Women need specialised medical facilities for pregnancy and delivery. Their requirements of clothes and cosmetics are different from that of men. Each gender thus has its own need for specific products and services.

Family life cycle has a profound influence on buyer decisions, e.g. the need of a young family as opposed to more senior citizens.

Social factors - a consumer's behaviour is influenced by social factors, such as:

Groups: Two or more people who interact to accomplish individual or mutual goals.

A person's behaviour is influenced by many small groups. Groups that have a direct influence and to which a person belong are called membership groups.

Some are primary groups and include family, friends, neighbours, and co-workers. Some are secondary groups, which are more formal and have less regular interaction. These include organisations like religious groups, professional associations and trade unions.

Family: Family members can strongly influence buyer behaviour. The family is the most important consumer buying organisation society and it has been researched extensively. Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.

Roles and Status: A person belongs to many groups, family, clubs, and organisations.

The person's position in each group can be defined in terms of both roles and status. Example: in his family Mr X plays the roles of father and of husband; in his company he plays the role of manager, etc. A role consists of the activities people are expected to perform according to the people around them.

Cultural Factors

Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals.

Definition: “That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by a person as a member of society.” From this definition, we make the following observations:

Culture, as a “complex whole”, is a system of interdependent components.

Knowledge and beliefs are important parts. In some countries it is known and believed that a person who is skilled and works hard will get ahead. In other countries, it may be believed that differences in outcome result more from luck. “Chunking”, the name for China in Chinese, literally means “The Middle Kingdom.” The belief among ancient Chinese, that they were in the centre of the universe, greatly influenced their thinking.

Other issues are relevant. Art, for example, may be reflected in the rather arbitrary practice of wearing ties in some countries and wearing turbans in others. Morality may be exhibited in the view in most countries that one should not be naked in public. In Japan, on the other hand, groups of men and women may take steam baths together without being perceived as improper. On the other extreme, women in some Arab countries are not even allowed to reveal their faces. Notice, by the way, that what at least some countries view as moral may in fact be highly immoral by the standards of another country. For example, the law that once banned interracial marriages in South Africa was named the “Immorality Act", even though in most civilised countries this law, and any degree of explicit racial prejudice, would itself be considered highly immoral.

Culture has several important characteristics:

Culture is comprehensive. This means that all parts must fit together in some logical fashion. For example, bowing, and a strong desire to avoid the loss of face, are unified in their manifestation of the importance of respect.

Culture is learned rather than being something we are born with. We will consider the mechanics of learning later in the course.

Culture is manifested within boundaries of acceptable behaviour. For example, in South African society, one cannot show up to class naked, but wearing anything from a suit and tie to shorts and a T-shirt would usually be acceptable.

Conscious awareness of cultural standards is limited. An American spy was intercepted by the Germans during World War II simply because of the way he held his knife and fork while eating.

Cultures fall somewhere on a continuum between static and dynamic, depending on how quickly they accept change. For example, South African culture has changed dramatically since 1994 and the move away from the Apartheid system and its laws and segregation, while the culture of e.g. Saudi Arabia has changed much less.

Impact of cultural awareness on customer relations:

Dealing with culture: Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures may feel uncomfortable in each other’s presence without knowing exactly why (for example, two speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal distance).

Warning about stereotyping: When observing a culture, one must be careful not to over-generalise about traits that one sees. Research in social psychology has suggested a strong tendency for people to perceive an “outgroup” as more homogenous than an “ingroup”, even when they knew what members had been assigned to each group purely by chance. When there is often a “grain of truth” to some of the perceived differences, the temptation to over-generalise is often strong. Note that there are often significant individual differences within cultures.

Cultural lessons: We considered several cultural lessons in class. The important thing here is the big picture. For example, within the Muslim tradition, the dog is considered a “dirty” animal, so portraying it as “man’s best friend” in an advertisement is counter-productive. Packaging, seen as a reflection of the quality of the “real” product, is considerably more important in Asia than in the U.S., where there is a tendency to focus on the contents which “really count”. Many cultures observe significantly greater levels of formality than that typical in the U.S., and a Japanese negotiator tends to observe long silent pauses as a speaker’s point is considered.

Cultural characteristics as a continuum: There is a tendency to stereotype cultures as being one way or another (e.g., individualistic rather than collectivistic). Note, however, countries fall on a continuum of cultural traits. Hofstede’s research demonstrates a wide range between the most individualistic and collectivistic countries, for example, some fall in the middle.

Hofstede’s Dimensions: Gert Hofstede, a Dutch researcher, was able to interview a large number of IBM executives in various countries, and found that cultural differences tended to centre around four key dimensions.

Individualism vs. collectivism: To what extent do people believe in individual responsibility and reward rather than having these measures aimed at the larger group? Contrary to the stereotype, Japan actually rank in the middle of this dimension, while Indonesia and West Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism.

Power distance: To what extent is there a strong separation of individuals based on rank? Power distance tends to be particularly high in Arab countries and some Latin American ones, while it is more modest in Northern Europe and the U.S.

Masculinity vs. femininity involve a somewhat more nebulous concept. “Masculine” values involve competition and “conquering” nature by means such as large construction projects, while “feminine” values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the masculine side. (The fact that these values are thought of as “masculine” or “feminine” does not mean that they are consistently held by members of each respective gender—there are very large “within-group” differences. There is, however, often a large correlation of these cultural values with the status of women.)

Uncertainty avoidance involves the extent to which a “structured” situation with clear rules is preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range of the distribution.

Although Hofstede’s original work did not address this, a fifth dimension of long term vs. short term orientation has been proposed. In the U.S., managers like to see quick results, while Japanese managers are known for taking a long-term view, often accepting long periods before profitability is obtained.

High vs. low context cultures: In some cultures, “what you see is what you get”. The speaker is expected to make his or her points clear and limit ambiguity. This is the case in the South Africa. If you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy. In Japan, in contrast, facial expressions and what is not said may be an important clue to understanding a speaker’s opinion. Thus, it may be very difficult for Japanese speakers to understand another’s written communication. The nature of languages may exacerbate this phenomenon, while the German language is very precise, Chinese lack many grammatical features, and the meaning of words may be somewhat less precise. English rank somewhere in the middle of this continuum.

Ethnocentrism and the self-reference criterion: The self-reference criterion refers to the tendency of individuals, often unconsciously, to use the standards of one’s own culture to evaluate others. For example, Americans may perceive more traditional societies to be “backward” and “unmotivated” because they fail to adopt new technologies or social customs, seeking instead to preserve traditional values. In the 1960s, a supposedly well read American psychology professor referred to India’s culture as “sick” because, despite severe food shortages, the Hindu religion did not allow the eating of cows. The psychologist expressed disgust that the cows were allowed to roam free in villages, although it turns out that they provided valuable functions by offering milk and fertilizing fields. Ethnocentrism is the tendency to view one’s culture to be superior to others. The important thing here is to consider how these biases may come in the way in dealing with members of other cultures. It should be noted that there is a tendency of outsiders to a culture to overstate the similarity of members of that culture to each other. In the United States they are well aware that there are great deal of heterogeneity within their culture; however, they often underestimate the diversity within other cultures. For example, in Latin America, there are great differences between people who live in coastal and mountainous areas; there are also great differences between social classes.

Language Issues

Language is an important element of culture. It should be realised that regional differences may be subtle. For example, one word may mean one thing in one Latin American country, but something different in another. It should also be kept in mind that much information is carried in non-verbal communication. In some cultures we nod to signify “yes” and shake our heads to signify “no”: in other cultures the practice is reversed. Within the context of language:

There are often large variations in regional dialects of a given language. The differences between South African, U.S., Australian, and British English are actually modest compared to differences between dialects of Spanish and German.

Idioms involve “figures of speech” that may not be used, or literally translated in other languages. For example, “now now” and “just now” are South Africanisms, causing a lot of confusion for other English speakers. A word such as “robot” is a traffic light in South Africa, but an electronic creature in most other countries.

Neologisms involve terms that have come into language relatively recently as technology or society involved. With the proliferation of computer technology, for example, the idea of an “add-on” became widely known. It may take longer for such terms to “diffuse” into other regions of the world. In parts of the world where English is heavily studied in schools, the emphasis is often on grammar and traditional language rather than on current terminology, so neologisms have a wide potential not to be understood.

Slang exists within most languages. Again, regional variations are common and not all people in a region where slang is used will necessarily understand this. There are often significant generation gaps in the use of slang.

Psychological Factors

Motivation: Motive (drive) - a need that is sufficiently pressing to direct the person to seek satisfaction of the need.

Perception: The processes by which people select, organise, and interpret information to form a meaningful picture of the world.

Learning: Changes in an individual’s behaviour arising from experience.

Beliefs and attitudes: Belief is a descriptive thought that a person holds about something. Attitude describes a person's consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea.

Click here to view a video about the key factors that influence the buying decisions of consumers.