How understanding consumer behavior can uplift your sales

11 min read
Aman Jha

Every business revolves around consumers, yet many of us overlook the need of understanding consumer behavior. By observing consumer psychology and the forces behind customer purchases, companies can develop popular new products, market more effectively, and eventually increase revenue.

Consumer behavior refers to the factors that influence a person's buying decisions, such as:

  • Social trends
  • Lifestyle
  • Working patterns
  • Motivation to buy something

Companies study consumer behavior in order to understand the people who are most likely to buy from them. They also use it to develop more attractive advertising campaigns and sales strategies.

If you’re passionate about knowing how consumer behavior works, keep reading to see how it can uplift your sales.

Related: How to do market research to learn about your customers

Why does understanding consumer behavior matter?

It’s important to understand the learning model of consumer behavior to get to the root of why people decide to buy your product. You can use this knowledge to dramatically increase your product’s impact in the market and meet your sales goals.

Woman looking at two different blouses

Making decisions based on the consumer’s behavior will greatly benefit any company that is trying to build a customer base or retain their consumers. If marketers create campaigns that address their audience’s underlying concerns and desires, they can surely win over others.

A look into “Maslow’s Hierarchy of Needs” theory

Maslow's hierarchy of needs is a theory based on human psychology that informs us about why we do what we do.

The theory says that people try to satisfy their needs in a sequence.

This sequence is a hierarchical order that begins with the satisfaction of the most basic needs at the bottom and then moves on to the higher and advanced needs. Until the first level of needs is satisfied, people cannot move on to the next level.

Maslow’s hierarchy infographic Green Biz
Source: Green Biz

How is this theory used in business practices?

Maslow’s hierarchy of needs is often mentioned in business classes in terms of organizational behavior and human resources.

Maslow's hierarchy of needs gives a framework to think about where your products or services fit into consumers’ lives.

This study increases the overall performance of the business.

The first and foremost priority of a consumer is to fulfill his basic needs which include food, house, and security. A person will always act accordingly, which is why understanding consumer behavior matters.

For instance, someone who is in need of food does not look to get a Wi-Fi connection first.

The top 5 factors that influence consumer buying decisions

When you look at this hierarchy in the context of what a consumer needs to thrive and engage with enthusiasm, some interesting ideas emerge. Let’s review them below.

1. Psychological factors

Let’s delve into the ‘psychological factors’ of consumer behavior below.


When someone is motivated enough, it affects their buying behavior. As stated in Maslow’s hierarchy theory, a person has many needs, such as:

  • Basic needs
  • Belonging needs
  • Security needs
  • Esteem needs
  • Self-actualization needs

Of all these needs, basic and security needs take precedence over the others. These often relate to products or services based around food, clothing and shelter.

The brand, Grofers, is a great example here because they answer a common need for people looking for grocery items at their doorstep.

One might argue it is easier to motivate consumers to purchase their products because Grofers fulfills a primary need.


When a customer sees ads, testimonials, or social media comments about your product or service, they develop a certain impression of it.

Thus, it’s important for business owners to monitor any online comments they receive from consumers.

Person scrolling through online products on smartphone

Keeping a positive attitude when responding to online feedback is key for building trust with your customers — leading to better ratings.

Remember, a consumer's perception can be the main factor in influencing their purchase decision.


Through experience comes learning. A person only knows a product or service after using it. Anyone satisfied with a particular product/service will show a strong tendency to buy the same product again.

Attitude and belief

Attitude and belief play a vital role in influencing consumer purchasing decisions. Individuals always tend to create a particular image of each product or service available in the market.

Consumers buy based on their opinion of a particular product or service.

A product can be extremely good, but if the consumer does not think it is necessary — or if they think it is not for people like them — they will never buy it.

2. Social factors

A customer’s social group influences how they shop and often stem from factors like:

  • Social class
  • Education level
  • Peer groups
  • Family and friends

We can say that social factors reflect a steady and dynamic influx through which people learn different meanings of consumption.

Certain products or services will only be considered by the wealthy, for example. They satisfy needs so high on Maslow’s hierarchy that only they can afford them.

3. Cultural factors

The influence of culture on buying behavior varies from country to country, so retailers need to be very careful when analyzing the culture of different groups, regions, or even countries.

Whether it's family, friends, or the environment, a person's cultural background plays an important role in their purchasing behavior.

Each culture contains different subcultures such as:

  • Religions
  • Geographic regions
  • Racial groups and more

Smart business owners segment their customers into several small sections. For example, retailers can design products that meet the needs of a specific geographic group and promote it exclusively to that group.

Therefore, you must be aware of the buying public’s culture and how it affects their behaviors. Knowing this will allow you to tailor your marketing strategy or specific ad campaign to succeed.

4. Economic factors

Understanding consumer behavior also requires taking economic factors into account. Sometimes consumer behavior can be shaped by the level of wealth or age of a particular audience.

For example, young people in India (aged 18 to 25) spend less money than their older peers.

This could be because they simply haven’t been working as long as older buyers. Key economic factors that influence spending power include:

  • Level of savings
  • Assets
  • Debts
  • Creditworthiness
  • Attitudes toward savings versus spending

People buy products with these economic factors in mind, so it’s important to research your target audience in detail. Consider:

  • Where they work
  • How they splurge
  • Family size

Knowing these things will help you determine the right pricing for your products and services — possibly even leading you to create different versions of your product at different prices for various segments.

5. Personal factor

Personal factors are very broad and often speak to the likes, dislikes, and interests of a particular audience.

Certain age groups could favor digital products, like e-books, while others may enjoy physical books. There are also many lifestyle choices that range from comfort to fashion. Some brands even target audiences by male or female for niche products like beauty oils and shaving creams.

Keyboard with blue button showing thumbs up symbol

Whichever personal factors play into your target audience, use this information to offer solutions to common problems within these groups.

Remember, all these factors can strongly influence customer behavior.

That’s why it’s crucial to engage with your customers when possible and learn what they want to help you meet their needs.

The benefits of understanding consumer behavior

In the past, some business owners may have felt as if every strategy had been working out smoothly for their business. But perhaps now, they realize some abrupt changes in consumer behavior. This may be because consumer behavior never remains constant.

During COVID-19, most consumers changed their buying priorities because of both internal and external forces. Internal forces relate to a consumer’s:

  • Learning
  • Motivation
  • Personality
  • Lifestyle

While external forces deal with factors outside the consumer’s personal behavior, like cultures, market trends and yes, global pandemics.

So, here’s how understanding consumer behavior can give you an edge to rule the market.

1. Sharpens marketing tactics

There are two ways understanding consumer behavior can benefit your business: by shaping your ad marketing or by shaping the marketing professionals you hire.

Below, we’ll describe how both can positively impact your business needs.

Two people shaking hands in front of white board that reads "Marketing"Ad marketing

Ad marketing allows you to incorporate any consumer behavior knowledge into your campaign to gain a stronger response.

For example, if you learn that your audience is inclined towards e-learning rather than e-books, you can then create Google ads based on that concept.


Professionals in this field can come up with different strategies that persuade target audiences to buy products or services. A business may decide to hire marketers with experience or opt for services like Godaddy’s Digital Marketing Suite to help them target a particular audience based on insights they’ve learned about consumer behavior.

2. Improves products or services

Companies often rely on consumer behavior research to help them design and sell products and services. They do this by researching options that would appeal to their target audience and improve their effectiveness through customer feedback.

The following examples will help you gain a better understanding of both.

Product design

Products and services should always be designed to meet customer requirements and needs. Therefore, they must be presented carefully in order to achieve the goals of the organization.

It’s worth exploring different types of marketing research methods to gain a better understanding of the people who are most likely to buy your product or service.

Product feedback

You can monitor how consumers react to your product by determining the cause of product rejection. Some suppliers or manufacturers even offer services to customers, such as:

  • Product exchanges
  • Money-back guarantees
  • Extended warranties

These services are offered in an effort to retain customers, while simultaneously influencing consumer behavior after a purchase.

3. Builds better customer service standards

Understanding consumer behavior allows companies to make more customer-centric business decisions to get high returns.

If your consumers are into trendy clothes, don’t offer them outdated fashion.

Instead, go with options that are based on your consumer behavior research. A business can set the bar for:

  • Specific customer groups (older or younger consumers, rich or middle-class consumers)
  • Create promotions/incentive programs more effectively
  • Serve customers in a way that encourages repeat customers and referrals

Better business standards in customer service also allows business owners to change their behavior for the better. A positive attitude can help shape and change the mindset of customers in their favor. This increases their chances of achieving goals in sales, profits, and continued success.

Where to find consumer's data?

Sign outside a restaurant

Understanding consumer behavior takes patience, since it can change unpredictably and rapidly. It is more important than ever to make quick and efficient decisions based on real-time data.

While consumer spending declined by 12.6% in 2020, household consumption is expected to grow by as much as 6.6% in 2021. Hence, relying on historical data is certainly part of a successful plan, but you need to focus on the real-time interpretation of data in times like these.

To help, here are some of the top places companies find accurate customer data and analysis for their marketing strategies:

  • Google Analytics
  • Social media
  • Market survey
  • Third-party data (research available online)
  • Keyword research
  • Q/A Pages
  • Blog comments
  • Twitter viral trends
  • Consumer review

You can learn more about each of these topics using this handy data and insights guide. This information will help you fully integrate different customer data into your business strategy, so you can succeed more often.

When it comes to making sense of the consumer data, this can be a different ball game. Unfortunately, companies find it difficult to interpret customer behavior analysis as most of the data they find is outdated. Companies also struggle using consumer analytics when:

  • They have too much data
  • They lack real-time customer data to accurately analyze their flaws
  • They can’t capture large amounts of data

It’s important to hire an experienced marketer to process your data for you. Go with one you trust or invest in marketing services that know how to optimize this information in a clear and accurate way.

It’s also possible for small businesses with a limited budget to learn how to do this on their own through online courses and research.

Strategizing using the learning model of consumer behaviour

Understanding consumer behavior should be the driving force of your marketing strategy.  If you are not keeping track of your consumer’s behaviors, you may be missing out on important marketing opportunities ahead of you.

By understanding consumer behavioral patterns, you already win half the race.

In short, sellers who understand and incorporate consumer behavior data into their goals and strategies are more likely to have a leg up over their competitors.

The role of consumer behavior in marketing is overwhelming, but analyzing this data is important. It helps business owners understand how to sell their products in a way that puts the customer’s needs first, which ultimately increases chances at maximum sales opportunities.