Thursday, May 13, 2010

Any business whether online or off line aims at solving a problem and seeks to provide a product /service which the consumer employs with a higher sense of satisfaction. Whether a product is good or bad is determined by the consumer’s behavior and acceptance, which is very tricky to judge especially when we are not in direct contact with the consumer. For every business it’s necessary to understand the consumers and their behavior. We need to understand why they make a particular choice under given conditions.

Human behavior is an aggregation of responses, reactions or movements made by an individual in any situation. Consumer acts in a certain way when it makes sense to them at a particular point of time under certain conditions, e.g. buying a pizza vs. gorging on a McDonald burger given the budget and health concerns.

People behave rationally - or irrationally under entirely different situations. In most cases they behave rationally and weigh up different course of action before committing to one. On the other hand they behave irrationally when they are under the influence of emotions, feelings, which at times is difficult to understand. Their work environment and peers also influence their buying decisions.

The ability to understand and explain consumer’s behavior is critical in making recommendations for improvement, which logically should constitute a sound business.

There are certain nuances for understanding the consumer behavior, which can give some insights into behavioral pattern and scope of product improvement. The rules come under the Six Boxes model by Thomes F. Gilbert. These are a set of questions we need to ask to understand the consumer behavior.

  • Does the consumer really enjoy the service/product/process? For example what motivates the user to use a product and recommend the same to others?
  • Is the user skilled enough to use the product? Targeting an internet application for a user who does not know any thing about computers does not makes sense.
  • How will others respond if a product is chosen? There is always a social pressure driving consumer behavior. E.g. buying a sedan vs. small car.
  • Is the product simple to use or needs assistance? Sometimes the product is too complex and way ahead of its time thus making it difficult for consumers to adopt to it.
  • What are the benefits of using a product? What value will the consumer derive from using your product versus the competitor’s product?
  • Do the external factors like infrastructure, tools and environment conducive enough for the consumers? Slow internet growth in India has not created many successful internet startups while the same is not true for the Silicon Valley with countless examples of billion dollar startups.
So if we want to understand our consumers and convert them into loyal customers, we must understand their behavior through these 6 questions and find scope improve our product and services constantly.

Lokesh Gupta
twitter: @lokeshgupta
Team iXiGO
twitter: @iXiGOrocks

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