How to track consumer behavior (and why you should)
Track consumer behavior and leverage that data to create better, more personalized customer experiences.
Published April 7, 2020
Last updated March 23, 2022
There’s no getting around it: The success of a business depends on how well team members understand consumer behavior.
To some extent, this has always been true for companies. But deciphering how consumers interact with your business is especially important in 2022, as conversations take place on so many different channels.
Consider the customer journey of a modern shopper who discovers a business through a social media ad:
The promotion takes her to the company’s online store.
A pop-up appears five minutes into browsing, offering a discount if the shopper enters her email, which she does.
One week later, the business emails her to remind her about the products she viewed and put in her cart.
She returns to the store and purchases the items.
The company sends her text messages to update her on the status of her order.
That journey involved four different channels—and it concerned only a single customer.
With so many ways for a buyer to interact with a brand, businesses can’t assume consumer behavior is consistent across their audience. They have to keep tabs on all the ways shoppers connect with their company. From that behavioral data, brands can learn how to predict consumer behavior and offer the curated customer experiences their audience craves.
What is consumer behavior?
Consumer behavior refers to how buyers act across the customer journey, from researching a product to making a purchase. These actions help companies determine how a customer finds their product or service and why they buy it.
Why is consumer behavior important?
According to the Zendesk Customer Experience Trends Report 2022, over 90 percent of customers are likely to spend more money with companies that offer streamlined, personalized experiences.
Consumer research enables brands to offer those customized experiences. By tracking customers’ actions, you can understand what attracts buyers, what motivates them to make a purchase, and how they use your product or service. Once you know this information, you can enjoy the following benefits:
Targeted marketing refers to campaigns curated for specific groups or individuals. To create these promotions, companies almost always need consumer behavioral data. Pay attention to how consumers react to your current campaigns, and you’ll know how to adjust your messaging and visuals in your future marketing efforts.
Say you’re a marketer for a vacation booking site. You might notice that middle-aged women living on the West Coast are the segment with the highest clicks on your promotional email blast about accommodations in Hawaii. Based on that information, you can target this customer group with your next ad about Hawaii hotels.
Targeted marketing pays off. A recent study revealed that 70 percent of companies that use advanced personalization earn a 200-percent return on interest (or more) from it.
A/B testing helps marketing teams understand consumer behavior on a more granular level. By adjusting one campaign factor—whether that’s the call-to-action button color or the header image on a landing page—marketers can determine what drives engagement from specific segments. A study by Litmus shows that businesses that use A/B testing in their email marketing efforts see a return on investment of 42:1.
Customer feedback can provide important insights into the quality of your products. But even consumer input has limitations. People might not be completely forthright or share detailed responses. Fill in any potential feedback gaps by also using behavioral data as a foundation for new product development and product innovation.
Consider the vacation booking site example again. Say the product team notices that many people leave the company’s site within two minutes of accessing it on a mobile device. They do a little more digging and discover the site slows down significantly on mobile. To fix the situation, the product team doesn’t only make the site design more responsive—they also build an app where vacationers can easily browse and book trips in just a few clicks.
Support teams can also share details about their customer interactions with the product team to drive innovation. Say 50 customers call in to request a certain feature. Support agents can pass that input along to the product team so they can add it to their product roadmap.
Every support interaction provides valuable behavioral data you can use to better serve customers. Daily interactions show the channels your audience prefers to use, so you know which platforms to prioritize.
Beyond channels, monitoring how customers react to different support scenarios will reveal areas of improvement. What resolutions lead to five-star customer satisfaction ratings, and what interactions lead to disgruntled customers? These patterns can help reps figure out how to create more positive support experiences.
By tracking consumer data, you can also identify the most common issues and frequently asked questions. You can then add that information to your help center or knowledge base, making life easier for both your agents and your customers.
Say a significant number of consumers share the same complaint with the support team. An agent can write an article about how to resolve the issue and publish it on the knowledge base, so customers don’t have to contact the support team. This leads to a faster resolution and reduces the number of support tickets your agents need to handle.
Many customers prefer to help themselves using self-service resources, too. According to our CX Trends Report, 70 percent of consumers expect a company to have a self-service portal or content available to them.
What drives consumer behavior?
Your company’s brand messaging and approach can certainly impact customer behavior. But there are many other factors that influence consumers’ actions that are completely out of your control.
Some of the most common personal factors that shape consumer decisions and behaviors include demographics, lifestyle, and life stage.
Demographics include variables such as age, gender, income level, education, and marital status. To see how demographics shape buying decisions, consider how some generations shop online more than others. According to Statista, millennials between the ages of 25 and 34 are the largest group of digital buyers and account for 20 percent of America’s online buyer audience.
A person’s lifestyle refers to the activities they enjoy—traveling, camping, reading, and so on. Consumers appear to respond best to communication related to something they like. A recent Mailchimp study showed that emails about hobbies generated the highest click rate at 5 percent—nearly double the average for all industries (2.6 percent). Hook your audience by appealing to their lifestyle, and you’re on your way to driving them toward a purchase.
Stages of life—such as going to college, getting married, buying a house, and starting a family—also affect consumer behavior. For example, according to this study on the impact of life stages on consumer buying behavior, there’s a significant difference in how much money single people and married people with children spend on hobbies.
The most influential social factors include a person’s social class, culture, and family and friends.
Someone’s social class often boils down to their socioeconomic status. Consumers in the same class often have similar education levels, purchasing power, and ideas about quality and taste, which leads to similar purchasing decisions.
Culture is a bit harder to pinpoint, as it can be defined by a number of factors, such as geography or religion. But like social class, it plays a major role in shaping consumer behavior. For instance, a study by Lending Tree found that shoppers living in metropolitan states make the most online purchases, while those living in rural states shop online the least.
Along with social norms, people’s friends and family may push them toward certain purchases. According to a Kantar Media study, 93 percent of consumers go to friends and family for trusted information about brands and services.
Psychological factors and personal convictions can also impact how consumers spend their money. For example, the belief that “almond milk is healthy” pushes many people to buy the product, even if they prefer the taste of whole milk. According to the EY Future Consumer Index, 57 percent of consumers want to make healthier product choices in the long term.
How to collect consumer behavior data
When companies understand consumer behavior, they can make more customer-focused business decisions to enhance the customer experience. This goal is worth the effort—73 percent of business leaders report a direct link between their CX and company performance. But how do you collect that user data and analyze it to form insights?
1. Get customer feedback
Customer feedback is invaluable for understanding consumer behavior trends. Customer surveys, for example, allow consumers to become active participants in your brand. The responses you receive will provide key insights into what motivates, excites, and frustrates your audience. They’ll also reveal the reasons why some buyers leave and others stay.
Many customers, especially younger ones, will give companies feedback without even being asked. According to Bright Local, 80 percent of 18- to 34-year-olds have written online reviews (compared to 41 percent of consumers over age 55).
2. Use community forums as focus groups
Community forums give businesses a glimpse into their customers’ world. Consumers often join a brand’s community to discuss features they’d like to see or get advice from fellow users. Companies can leverage this information to adjust their marketing messages or product strategy.
Establish a community forum where your customers can connect and collaborate with each other and your business. By allowing your users to interact in an authentic way, you’ll gain a deeper understanding of their common issues as well as their likes and dislikes.
A forum can also serve as an open knowledge base in which customers can help one another. According to this case study, 73 percent of Jama Software’s staff found they could easily resolve many inquiries by linking to resources that already exist in their customer community.
3. Harness the power of analytics
Companies can better understand how their buyers behave by looking at patterns in their customer service data (ticket volume, first-reply time, customer satisfaction scores, etc.). You can use these historical analytics to your advantage and act proactively.
For instance, data trends can help you predict when you’ll need to hire more agents—whether that’s around holidays, product launches, software updates, or marketing campaigns—and which channels to use during those busy times.
4. Build a “Voice of Customer” program
Consumer behavior data isn’t just useful for support teams—it’s incredibly helpful for product and marketing teams, too. Many customer-centric businesses use a Voice of Customer (VoC) program to share data across the organization and enhance the entire customer journey. This type of program gathers and analyzes customer feedback about a brand, product, or service from a variety of sources.
The specific data collected by a VoC program depends on the goal of your initiative. If you want to improve your product, the program can draw insights from support queries, bug reports, and billing issues. Or, if you want to evaluate your marketing efforts, the program can capture data like open rates, click-through rates, and unsubscribe requests.
VoC programs collect customer experience data to uncover why a company is performing a certain way. These insights can help teams across your organization make improvements to their work. According to the XM Institute’s State of VoC Programs report, most companies find their VOC programs to be the most valuable for “identifying and fixing quick-hit operational issues.”
5. Connect your data to create a full view of the customer
Customer relationship management (CRM) software allows you to combine data from different teams—such as support, marketing, or management—in one place.
When you do this, you open up a world of cross-departmental possibilities. Marketers can send special promotions to dissatisfied customers with recently closed tickets, while support agents can see the promotional offers a consumer received.
Businesses can use data to craft a single, actionable view of the customer. This entails combining the data—demographics, purchase history, product usage, opened outbound emails, abandoned shopping carts, and so on—to create a customer profile that can be used to provide personalized experiences.
With the help of CRM tools, you can focus on the following:
- Which channel your customer uses: CRM tools gather details about every single interaction with customers, including the channels they use to shop or ask for help. Omnichannel analytics show exactly where a consumer is coming from, whether that’s email, social media, or live chat. Understanding the route a customer took to find you helps you determine how to best communicate with them and where to find more potential customers.
- Demographics about your customer: When using a CRM, customer data from any call, email, or chat becomes a new contact in seconds. You can use that information to personalize marketing strategies, such as social media launches or email campaigns.
- Customer spending behavior: A CRM can collect and analyze sales data to prioritize prospects, assess past purchasing behavior, and track campaigns. With this data, you’ll know the type of product or service to sell to a customer, what to put on sale, and what to focus on for future launches.
CRM tools don’t just make data collection and behavioral research more efficient—they also give your team the insights they need to boost revenue. You can share the analytics that matter with the rest of the company to make improvements across the customer journey.
Use consumer behavior analysis to enhance customer experiences
When you have the right data, your business can implement customer-centric decision-making to refine your CX. Effectively tracking consumer behaviors and acting on those insights can help you personalize customer experiences and ultimately increase customer loyalty, satisfaction, and retention.