Understanding the 4 types of consumer purchasing behavior

Carly Greenberg

·

August 22, 2024

What drives a customer to make a purchase?

It’s the question on every marketer’s mind – and the better we get at answering it, the more successful our brands will become.

But keep in mind, an initial purchase is only a starting point. In order to build a sustainable ecommerce business, it’s important to understand what will keep customers coming back to you again and again, and how to treat your different types of buyers to ensure that they’re likely to remain loyal for years to come.

So let’s focus on the psychology of customer behavior to help us understand who’s buying your products and why – so you can use those insights to get them even more engaged with your brand.

The four types of consumer purchasing behavior

A variety of factors, including personal factors (age, sex, cultural background), social factors (income level, living conditions, family dynamics), and psychological conditions (brand perception) can drive customers to make particular purchase decisions. Some are more likely to make purchases under certain conditions than others, and so it’s important to pay attention to different customer attributes to understand their buying behavior so that you can segment your audiences effectively.

These are the four primary types of consumer behavior that help us understand when and how a customer might make a purchase:

1. Complex buying behavior

If a customer is going to buy a Peloton bike, they’re not going to hit “buy” seconds after seeing an ad for the first time.When it comes to high-end, expensive purchases that a customer doesn’t make often – an exercise bike, a new mattress, a new car, a new home – the buying journey can be long and complex, requiring ongoing engagement and education from your brand. In the case of the Peloton, for instance, the customer might spend several hours reading reviews of the bike and its other competitors, watching video workouts, asking friends about their Pelotons, and even trying out a bike at a local showroom.With this type of purchase, you should be prepared to offer hands-on customer support to each customer as soon as they reach out – but keep in mind that they may not engage with your sales team directly until the end of their journey, so make sure that you have plenty of marketing assets available for them to conduct their own research through the process. With this type of buyer, cost isn’t the biggest concern – they want to understand the value they’ll get out of the purchase, and it’s your brand’s job to help them understand that.

2. Dissonance-reducing buying behavior

We’ve written previously about cognitive dissonance in the post-purchase experience, which can often lead to returns if the customer isn’t satisfied with their choice. Before the purchase, this customer is struggling to decide which of many options to consider, and is focused on factors including cost, convenience, and features.To put these customers’ fears to rest, it may be helpful to provide side-by-side comparison charts with some of your closest competitors, showcasing the features that your product offers that the others don’t. It’s also very important to offer a great returns policy – these types of customers will likely never take the plunge if they don’t feel confident that they can change their minds if they’re not satisfied with their purchases. By giving them the confidence that you’ll stand behind your brand, you’re more likely to see these customers give your products a try.

3. Habitual buying behavior

There are some products that shoppers have a strong brand loyalty to – say, a type of shampoo, a skin cream, or a certain romance novel author.It’s every brand’s dream to have their products be one of these “habitual” purchases, but how do you make it happen?The best way to steal the crown from another brand is to make sure that you’re there at the point of need with an attractive offer. For instance, if you’re an outdoors gear brand and ski season is coming up, run a multichannel promotion with a special offer for new ski gear.Sometimes it can take more than a discount to win over new customers, though: Consider offering a try-before-you-buy deal, or an ultra-generous returns policy. (Allbirds, for example, allows customers to wear their shoes out in the wild for 30 days, and send them back for a full refund if they don’t love them.) By connecting with customers when they’d normally make their purchase and attracting them with a compelling offer, you may be able to get them to switch their habit, resulting in a customer loyalty windfall.

4. Variety-seeking customer

Some customers are the opposite of habitual – or they may be habitual for certain types of products, but not others. For instance, while a customer may be loyal to a brand of toothpaste, they may be eager to explore a wide variety of lipsticks and hair gels to try out different styles and see what they like best.Offering a variety of different product lines, and adding new items regularly, can help keep these customers from getting bored with your brand – especially if you use a digital loyalty program to incentivize them to keep shopping with you, rather than testing out your competitors. Keep them in the loop with regular email, in-app, or SMS updates that let them know about new products they can try out, with personalized recommendations based on their previous shopping behavior.

Regional differences in purchasing behavior: US, UK, and Australia

When targeting your customers, it’s important to pay attention to what works in each region. Customers in the US may respond differently to an offer than shoppers in the UK or Australia would, so you’ll need to customize your strategy accordingly.

Here are some key differences:

U.S.

Americans’ brand loyalty is relatively low, meaning that you may be able to lure customers over with a great offer, but will need to work harder to hold on to them. Younger shoppers (Gen Z and Millennials) gravitate towards sustainable options, while older generations are more swayed by price. More than three quarters of American shoppers said they’d delayed purchases or switched to cheaper brands due to rising prices (dissonance-reducing buyers).

In general, US shoppers are moderately price-sensitive, but they’re more willing to invest in convenience or a premium experience if the price point is higher (complex buying behavior).

What does that mean in practice? Look at the ecommerce eyewear brand, Warby Parker. Their products offer a premium and convenient omnichannel shopping experience: For instance, shoppers can try on frames in-store, use a virtual try-on service on the brand’s app, or get five sets delivered to their home for free try-on, plus free 30-day returns. Warby Parker also releases new styles and limited-edition collections throughout the year, appealing to the variety-seeking shoppers who like to switch up their style regularly.

UK

UK shoppers are extremely price-conscious, and take full advantage of coupons, promotions, and sales events. And while brand loyalty is relatively high, with 59% of shoppers saying that they’d been loyal to certain brands for “as long as they could remember,” low pricing is even more important. Sixty-four percent of consumers said that affordability was the most important factor in deciding where to spend their dollars, trumping habitual shopping behavior.

On the other hand, British shoppers are more quality-conscious than Americans: 68% said that they are willing to spend more on higher-quality products. To win them over on the basis of quality, it’s important to be as transparent as possible: 56% said that they want to learn more about a company’s production process and materials before making a purchase. By creating content and videos that showcase your brand’s commitment to high-quality materials and a great warranty and returns policy, you’re more likely to win over these price-conscious consumers.

For instance, UK-based outdoors apparel brand Finisterre stands for sustainability in everything they do, from the sourcing of their fabrics to their production process and packaging. By sharing their factories and sourcing processes, listing all of their materials and how they are made, and publishing regular Impact Reports, they’re able to convert customers based on quality, ethics, and commitment to a sustainable future.

Australia

For Australian consumers, price is a larger factor than US shoppers, but less significant than Britons. They’re likely to swap brands often: Just 17% of consumers say that they’re loyal to particular brands (habitual shoppers), while 19% like to explore new brands (variety-seekers), and 63% would switch brands for a better deal (dissonance-reducing).

However, Aussie shoppers are highly committed to sustainability, so ensuring sustainable messaging and practices throughout the entire brand experience is likely to sway shoppers who might otherwise jump ship to a competitor with lower pricing. More than half of Australians say they’re willing to pay a premium for sustainably or ethically made products, and three-quarters of them want brands to take a stand on sustainability. Other key priorities in making a purchase include a product’s durability (85%), repairability (73%), and whether it is locally produced (64%).

Outland Denim, an Australian producer of jeans and other denim products, is a prime example of a brand succeeding on these elements. Outland’s durable products are made from sustainable materials, and they have a carbon-neutral manufacturing process. The brand also provides employment opportunities at fair wages to empower at-risk young women in Cambodia, many of whom had previously been sex trafficked.

Optimize purchase behavior all the way through the customer journey

It’s important to understand which type(s) of purchase behavior fits your brand, and by gathering data insights about your customers, you’ll be able to segment them to predict their purchase behavior based on shared characteristics, including both demographic and behavioral data. You may need to customize your strategy for each region you target, such as by focusing on sustainability messaging for British and Australian markets, while prioritizing convenience and variety for American consumers.

Build customized marketing funnels for each segment that help them through the purchase journey and encourage them to remain engaged with your brand. You can do this by creating a loyalty program that provides points for every dollar spent, encouraging them to purchase more frequently to benefit from special discounts, rewards, or perks, such as free shipping or bonus products. By demonstrating the value of committing to your brand, you’ll be able to convert more customers into “habitual” shoppers, who’ll default to your brand even in the face of lower-priced competitors.

A best-in-class post-purchase experience is also crucial for building a loyal customer base, no matter what your shoppers’ primary purchasing behaviors are. That includes:

• Accurate delivery estimates: Give your shoppers confidence in their shipment with data-driven delivery estimates that update in real time based on warehouse and carrier data.
• A seamless process for returns and exchanges: Customers should be able to initiate their own returns in a self-service returns portal that makes exchanges as easy as shopping, and provides hassle-free refunds on eligible items with automated workflows to reduce customer support needs.
• Options for lowering returns costs: Given rising logistics costs, most brands no longer offer free returns, but you can set your brand apart by offering a premium returns experience. By using Loop’s Offset product, you can enable shoppers to pay a small fee upfront in exchange for access to a free and convenient returns experience later. 

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By delivering an enhanced customer experience all the way through the buyer’s journey, you’ll be able to build trust in your brand across every type of customer, ensuring that they’ll remain committed for the long haul.

Want to learn how Loop can help you build customer loyalty? Get in touch!

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