Psychological Factors-Consumer Behavior

We talk about Importance of Consumer Behavior , Consumer Behavior---Introduction ,CRM as a part of leadorganizer and lead management with reference to crm. In our previous post, we talk about Types of Consumers, Buyer Vs User and factor influencing consumer behavior.


Consumer Needs and Motivations
We all have needs and we consume different goods and services with the expectation that they will help fulfill these needs. When a need is sufficiently pressing, it directs the person to seek its satisfaction. It is known as Motive. All our needs can be classified into two categories-primary and secondary.

Primary need or motives are the physiological need which we are born with, such as the need for air, water, food, clothing, shelter and sex.

The secondary needs are our acquired needs which we have developed in response to the society and environment in which we live. The secondary needs are the result of the individuals’ psychological make-up and his relationship with other members of the society.

The secondary need may include the need of power, prestige, esteem, affection, learning, status etc. Clothing is a primary need for all of us but the need for three piece tweed suit or jean pant o silk kimono are expressions acquired needs. The man wearing a three piece tweed suit may be seeking to fulfill his status need or his ego need by impressing his friends and family.

The theory of hierarchy of need was propounded by Abraham Maslow. We talk on this in our next post.


ref: crm, sfa, lead management, leadorganizer software for insurance industry.

Factors Influencing Consumer Behaviour

We talk about Importance of Consumer Behavior , Consumer Behavior---Introduction ,CRM as a part of leadorganizer and lead management with reference to crm. In last two post, we talk about Types of Consumers and Buyer Vs User. Today, I m going to talk different factors influencing consumer behavior.

Consumer behavior is affected y a lost of variables, ranging from personal motivations, needs, attitudes and values, personality characteristics, socio-economic and cultural background, age, sex, professional status to social influences of various kinds exerted by family, friends, colleagues and society as a whole.

The combinations of these various factors produce a different impact on each one of us as manifested in our different behavior as consumers. You may think that the best way of utilizing your annual saving is to have a Christmas vacation, but your wife thinks it is wisest to invest in jewellery, while your colleague considers buying shares as the best way of spending savings. Thus you would find that each person has his or her own standards of judgments and distinct behavior in every aspect of his role as a consumer.

But at the same time, underlying the individual differences are similarities which help explain behavior of specific types or groups of people. It is these similarities which make it possible for us to classify and analyze the behavior of individual consumers.

Psychological factors such as individual consumer needs and motivations, perceptions, attitudes, the learning process and personality characteristics are the similarities which operate across different types of people and influence their behaviour. Amongst the social influences affecting behaviour, we can classify the influences of family, friends, leaders and the social class to which the consumer belongs.

We shall discuss these factors one by one and see how they influence the individual’s behaviour as a consumer.


Ref: Customer relationship management & lead management software

Importance of Consumer Behavior

To successfully market to different market segments and for a successful marketing campaign management the marketing manager needs appropriate marketing strategies which he can design only when he understand the factors which account for those differences in consumer behaviors and tastes.

In today’s world of rapidly changing technology, consumer tastes are also characterized by fast changes. To survive in the market, a firm has to be constantly innovating and understand the latest consumer trends and tastes. Consumer behavior provides invaluable clues and guidelines to marketers on new technological frontiers which they should explore. For example, Mobile Phones, Lap Tops, LCD Monitors, etc.

Consumer behavior is a process, and purchase forms one part of this process. There are various endogenous psychological and exogenous environmental factors which influence this process. All these factors and the type of influence which they exert on an individual’s consumption behavior can be understood and analyzed.

ref:
customer relationship management

Consumer Behavior---Introduction

Leadorganizer and Lead Management are heart of any customer relationship, agency management system and marketing strategies. Leadorganizer means how to manage your leads. Businesses must have leadorganizer or lead management software to manage their leads. What is a lead? A Lead is a prospect for any business. It is very important for marketing executive/management to understand prospect requirements and consumer behavior. First let us understand consumer behavior.

‘What’ products and services do we buy, ‘why’ do we buy, ‘how often’ do we buy, from ‘where do we buy, ‘how do we buy, etc. are the issues which are dealt with in the discipline of consumer behavior. Consumer behavior can be defined as those acts of individuals (consumers) directly involved in obtaining, using, and disposing of economic goods and services, including the decision processes that precede and determine these acts. Just by human nature, consumers can be spontaneous, unpredictable, and selfish.

One thing that we have in common is that we are all consumers. In fact everybody in this world is a consumer. Everyday of our life we are buying and consuming an incredible variety of goods and services. However, we all have different tastes, likes and dislikes and adopt different behavior patterns while making purchase decisions. One may preferred to use colgate toothpaste, Dove soap, Head & Shoulder shampoo while your spouse may prefer another type for same requirement. Similarly, you may have a certain set of preferences in food, clothing, books, magazines, recreational activities, forms of savings and the stores from where you prefer to shop, which may be different not only from those of your spouse but also your friends, neighbors and colleagues. Each consumer is unique and this uniqueness is reflected in the consumption behavior and pattern and process of purchase. The study of consumer behavior provides us with reasons why consumers differ from one another in buying and using products and services. Customers and their behaviors comprise of many attributes and differentials. These differences are not just associated with demographics, groups or any one particular item. There is a complex development of behaviors that exist in the consumer markets.

In the world we live today, businesses and top Marketing executives must understand what differentiates their companies or their products from others and must understand the needs of the consumers in their markets. If they able to understand their product and consumer’s need, than it’s very easy for them to develop a strategic plan and create a market niche and develop their customer base with very good customer relations. Customer Relationship Management can help them to take competitive advantage in the market. Customer Relations depend on understanding the customer and their reactions to the environment which will at last prolong the life of customer relationship between company and their customers.


Understanding the customer need can be a starting point for majority businesses. There are possibilities of gap occurs between customers expectation and what businesses think customers expect. It result into overlook or not understanding customer's perceptions and real requirement.

ref: agency management software

CRM

What is CRM?

There are three aspects of CRM(Customer Relationship Management) which can each be implemented in isolation from each other:

• Operational - automation or support of customer processes that include a company’s sales or service representative



• Collaborative - direct communication with customers that does not include a company’s sales or service representative



• Analytical - analysis of customer data for a broad range of purposes

Operational
Operational CRM provides support to "front office" business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database as necessary.
One of the main benefits of this contact history is that customers can interact with different people or different contact channels in a company over time without having to repeat the history of their interaction each time.Many call centers use some kind of CRM software to support their call center agents.

Collaborative
Collaborative CRM covers the direct interaction with customers, for a variety of different purposes, including feedback and issue-reporting. Interaction can be through a variety of channels, such as web pages, email, automated phone or SMS.The objectives of collaborative CRM can be broad, including cost reduction and service improvements.

Analytical
Analytical CRM analyzes customer data for a variety of purposes:

• Design and execution of targeted marketing campaigns to optimise marketing effectiveness


• Design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention


• Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development etc.)


• Management decisions, e.g. financial forecasting and customer profitability analysis
  Prediction of the probability of customer defection.

Analytical CRM generally makes heavy use of predictive analytics.

Key functionalities of Any CRM:--

A typical CRM system is subdivided into three basic sub modules:

1. Marketing
2. Sales
3. Service

More on Functionalities of CRM come next time.

WHY CRM ?

Customer Relationship Management (CRM) is the way in which businesses acquire, document, and assess their potential customers, and maintain relationships with their clientele. CRM systems aid businesses in scheduling and maintaining their clients in order to build a long lasting and trusting business relationship more efficiently than ever before. Without such a system, any businesses would constantly be rewriting the same information on different documents.

With a CRM system, fields are automatically populated by the information that is repetitive (Name, D.O.B., etc.) such that agents save vast amounts of time and energy on these forms, time and energy that is then reassigned to attaining new cases.

Reference:

1)http://en.wikipedia.org

2)http://www.leadorganizer.net