Psychology and consumer behavior
I’ve said it before, and I’ll say it again: humans are complicated beings. Liraz Margalit recently published an article in Psychology Today arguing that companies and data scientists begin working with psychologists in order to develop a better understanding of consumer behavior.
Personal opinion? Seems like a very valid argument to me.
Personal yet profitable
The marketing goal of today is to create personalized experiences that attract visitors and convert them into customers, while simultaneously retaining older customers. Though the ultimate goal – to make money – remains the same, the method of going about it did not become popular until fairly recently.
This is without a doubt primarily due to the advent of online shopping.
After all, with a seemingly infinite number of online retailers, for many it is not particularly difficult to purchase what they need elsewhere online. Thus, was born a new trend- one that focused on creating personalized experiences based around data previously gained from customers. The thinking is that the ease and comfort that comes with such an experience will create repeat customers.
This is half-right
One of the major problems companies are running into is that while a website or store may have a large number of visitors, that does not necessarily mean that said visitors will be customers. Companies have swathes of solid data regarding customers- user behavior, social media information, item details, contextual information, etc. – cold, hard data.
But the problem is that, generally speaking, human beings are not cold, hard creatures.
Fact is, all that fancy-pants information is great in terms of numbers and algorithms. But, as of yet, human behavior cannot be understood using numbers and algorithms, and therefore, it can quite often turn out to be a waste of money. We still have a ton to learn regarding human behavior, and we are humans (insert tin-foil hat reference regarding aliens living among us here).
How, then, are computers supposed to have a deeper understanding of the subject?
Computers are pretty amazing things, but they’re not there quite yet. In her article, Margalit offers a couple of suggestions.
First, instead of focusing on conversion rates, businesses need to begin thinking in terms of “conversion cycles.” Customers may visit retailers a number of times in a variety of ways before making a purchase. This can include their online stores, their brick-and-mortar stores (if they have one), their mobile sites, social media pages, and more.
Whether they make a purchase is typically the result of these experiences.
Those experiences are also combined with other, more difficult to gauge factors (emotional pulls, personal style, current economic status, etc.). Companies need take heed of these factors, as well as understand their significance.
Know your base
Second, she suggests working with psychologists to begin developing psychological models for their customer base.
Using data scientists to gather and translate the data, and psychologists to develop an understanding of the data’s significance, companies would not only have a deeper understanding of their customer base.
They would also have a stronger idea as to what would attract a broader range of customers. And really, what company wouldn’t want that?
Use what you’ve got
As stated previously, humans are complicated creatures.The human experience is made up of ambiguities and contradictions, and our decisions are often based off intangibles, such as hunches and gut reactions. Click To Tweet
In the future, it will likely become increasingly important that companies’ both take these qualities into account, and begin learning to use them to their advantage.