1. Welcome To Module Understanding Customers’ Behavior
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2. Learning Objectives At the end of this module, you will be able to:
Customers
Understand the customer’s buying behavior.
Identify the needs of customers.
Identify the factors that influence the purchase
decision of a customer.
Explain how customers make their buying decisions.
Tell participants that so far, we have talked about changing needs of customers. In this module, we will take a look at a broad classification of customer needs and how customers buy. If we have to be successful in selling, we first need to understand the needs of the customer. Knowledge of how customers buy will help us to tailor our selling cycle to the customers buying cycle.
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3. One who uses our services
Who is a customer?
One who buys a
product
Wants information
One who uses our services
Is looking to purchase
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4. First Impression Vs Moment Of Truth
First Impression is the first 40 seconds of interaction. It is mostly
Perception-based and this perception is driven by word of mouth,
advertisements etc.
After the initial 40 seconds, the customer truly begins to experience
your service. This service experience could be a good one or a bad
one.
A good experience leads to a good Moment Of Truth. A bad experience leads to a bad Moment Of Truth
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5. First Impression Vs Moment Of Truth
Good Moment of Truth
First Impression is formed
Bad
moment of Truth
Perception
We are responsible for our customers’ REALITY !!!
Leads to
Advertisement
Word of mouth
How?
Helpfulness
Enthusiasm
Billboard
Listening
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6. Types of Purchase Decisions
Minor new purchase
represent something new but not important purchase (status within a group)
Minor re-purchase
routine purchases and often the customer returns to purchase the same product (customer is loyal to the brand)
Major new purchase
most difficult purchase as the product is important for the customer and the customer might not have experience making the decision
Major re-purchase
Important purchase but customer has confident because of previous experience
customers are faced with purchase decisions nearly every day.  But not all decisions are treated the same.  Some decisions are more complex than others and thus require more effort by the customer.  Other decisions are fairly routine and require little effort. 
Minor New Purchase – these purchases represent something new to a customer but in the customer’s mind is not a very important purchase in terms of need, money or other reason (e.g., status within a group).
Minor Re-Purchase – these are the most routine of all purchases and often the customer returns to purchase the same product without giving much thought to other product options (i.e., customer is brand loyalty).
Major New Purchase – these purchases are the most difficult of all purchases because the product being purchased is important to the customer but the customer has little or no previous experience making these decisions. The customer’s lack of confidence in making this type of decision often (but not always) requires the customer to engage in an extensive decision-making process.
Major Re-Purchase - these purchase decisions are also important to the customer but the customer feels confident in making these decisions since they have previous experience purchasing the product.
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7. Why Customers Buy? Customers make purchases to meet their needs.
Some are basic needs required for survival (e.g. food, shelter)
Others are desires or wants that are not mandatory for survival.
Places where the standard of living is very high, a large portion of the population’s income is spent on wants and desires rather than on basic needs.
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8. Human Needs Vs Business Needs
Personal reasons why we buy a product. The personal emotion attached to the decision to purchase the product fulfills this need. The human need differs from person to person.
The functionality of the product fulfills a business need. The business need is mostly common.
Trainer’s note:
Give an example.
Ask the audience if money was not a factor then which car would they want to buy and why? Ask everyone in the audience.
Note down the responses.
Expected responses:
Style statement
Speed
Looks
Features
Family car
Etc.
After you ask everyone, then ask the audience that “how come most of you did not tell me that the car takes us from point A to point B”
Expected response: Because it is understood that the car will take us from Point A to Point B.
Then Explain:
Car taking us from one place to another place is the business need. The other features mentioned earlier are the human needs.
You can give your own examples.
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9. Human Needs Vs Business Needs
Addressing only the HUMAN NEEDS will make you very polite but
INEFFECTIVE. All you are doing is saying all the right things but doing nothing.
Addressing only the BUSINESS NEEDS will make you very efficient
but DRY. The human touch will go missing.
HOW DO I ADDRESS BOTH THE HUMAN AND THE BUSINESS
NEEDS?
Start with the Human needs then move to the Business need. Go back
to the Human need again if the customer brings it up again, but always
have your sight on the business need as well.
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10. What Influences Purchasing?
Internal
Perceptual factors
Attitude
Knowledge
Personality
Lifestyles
Roles
Motivation
Marketing
Product
Promotion
Price
Service
Distribution
External
Culture
Group
Situation
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11. What influences purchasing….Internal factors
Perception :is the way we filter stimuli (e.g., someone talking to us, reading a newspaper story) and then make sense out of it. Perception has several steps. Exposure, Attention, Awareness, Retention
Attitude :refers to what a person feels or believes about something. Once formed, attitudes can be very difficult to change.
Personality :is the sum of sensory experiences others get from experiencing a person (i.e., how one talks, reacts)
Lifestyle :this influencing factor relates to the way we live through the activities we engage in and interests we express. Lifestyle is often determined by how we spend our time and money.
Trainer’s note:
Perception: Exposure – sensing a stimuli (e.g. seeing an ad)
Attention – an effort to recognize the nature of a stimuli (e.g. recognizing it is an ad)
Awareness – assigning meaning to a stimuli (e.g., humorous ad for particular product)
Retention – adding the meaning to one’s internal makeup (i.e., product has fun ads)
Customers are more likely to retain information if a person has a strong interest in the stimuli. If a person is in need of new mobile they are more likely to pay attention to a new advertisement for a mobile while someone who does not need a mobile may need to see the advertisement many times before they recognize the brand of mobile.
PERSONALITY:While one’s personality is often interpreted by those we interact with, the person has their own vision of their personality, called Self Concept, which may or may not be the same has how others view us.
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12. What influences purchasing….Internal factors
Roles represent the position we feel we hold or others feel we should hold when dealing in a group environment.
Motivation relates to our desire to achieve a certain outcome.
Trainer’s notes:
ROLES: In support of their roles, consumers will make product choices that may vary depending on which role they are assuming.
MOTIVATION: Many factors can affect a customer’s desire to achieve a certain outcome but there are others.
For instance, when it comes to making purchase decisions customers’ motivation could be affected by such issues as financial position (e.g., Can I afford the purchase?), time constraints (e.g., Do I need to make the purchase quickly?), overall value (e.g., Am I getting my money’s worth?), and perceived risk (e.g., What happens if I make a bad decision?).
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13. What influences purchasing….External factors
Culture represents the behavior, beliefs and, in many cases, the way we act learned by interacting or observing other members of society.
Group: customers belong to many other groups with which they share certain characteristics and which may influence purchase decisions.
Situation: In general, a situation is the circumstances a person faces when making a purchase decision, such as the nature of their physical environment, their emotional state, or time constraints.
Trainer’s note: Additional explanation on the topics
GROUP: Often these groups contain Opinion Leaders or others who have major influence on what the customer purchases. Some of the basic groups we may belong to include: Social Class, family, reference groups. Social Class – represents the social standing one has within a society based on such factors as income level, education, occupation.
Family – one’s family situation can have a strong effect on how purchase decisions are made
Reference groups – most customers simultaneously belong to many other groups with which they associate or, in some cases, feel the need to disassociate
SITUATION: For instance, if a person needs a product quickly and a store does not carry the brand they normally purchase, the customer may choose a competitor’s product.
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14. Marketing Implications
Marketers must be creative and use various means to deliver information about the products.
Marketers may conduct research that will gauge consumers’ level of knowledge regarding their product.
Developing methods (e.g., incentives) to encourage consumers to accept more information (or correct information) may affect other influencing factors.
Exposing consumers to a product can be challenging considering the amount of competing product messages (ads) that are also trying to accomplish the same objective (i.e., advertising clutter). So marketers must be creative and use various means to deliver their message.
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15. Marketing Implications
Marketers must work to identify the key issues shaping a consumer’s attitude and then adjust marketing decisions (e.g., advertising) in an effort to change the attitude.
Marketers must research on how consumers in their target markets live to identify the products to distribute.
Show how the benefits of their products aid consumers as they perform certain roles.
Marketers should make it easy for consumers to learn about their product (e.g., information on website, free video preview) and, for some products, allow customers to experience the product (e.g., free demos) before committing to the purchase.
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16. How Customers Buy?
Think of a major purchase you have made in the last few months
Answer the following questions :
Why did you want to buy it ?
What all alternatives did you consider?
How did you go about buying? Did you consult your friends, did you browse on internet……
Where did you buy the particular product?
Why this particular make/brand?.....
Ask participants to complete the exercise in the workbooks. Once they have completed, ask a few participants to read out what they have written. Write the broad steps on the flip chart and group the activities broadly and from here lead to the next slide – NERA and explain using the notes.
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17. Buying cycle - Step 1 NEED AWARENESS: Why did you want to buy it ?
Which need did you want to fulfill?
Need
Awareness
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18. Buying Cycle- Step 2 EVALUATE OPTIONS
How did you go about buying? Did you consult your friends, did you browse on internet……
Which brands / models did you consider?
Evaluate
Options
Customers may have a set of options from which they need to make a choice. First, the customer may create a set of possible solutions to their needs (i.e., product types) and then evaluate particular products (i.e., brands) within each solution. For example, a consumer who needs to replace a mobile has multiple solutions to choose from; within each solution type will be multiple brands from which to choose.
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19. Buying Cycle- Step 3 REMOVE DOUBTS
What were some of the doubts that you wanted to clarify?
Remove
Doubts
Customers undertake a search for information on possible solutions. The sources used to acquire this information may be as simple as remembering information from past experience (i.e., memory) or the consumer may expend considerable effort to locate information from outside sources (e.g., Internet search, talk with others, etc.).
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20. Buying Cycle- Step 4 ACTION
Where did you buy the product from and why?
Action
The purchase action depends on many reasons such as: the product is out-of-stock, a competitor offers an incentive at the point-of-purchase (e.g., store salesperson mentions a competitor’s offer), the customer lacks the necessary funds (e.g., credit card not working), or members of the consumer’s reference group take a negative view of the purchase (e.g., friend is critical of purchase). 
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21. Discussion Point
You are going to sell products. You need to know how to sell. Why do you need to know how customers buy?
Discuss the above point with participants. Show the next slide and explain
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22. Why Learn About Customer Buying Cycle
It helps you to understand what goes through his mind when he decides to buy the product.
If you know how the customer buys, it helps you to match your selling cycle to his buying cycle.
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23. THANK YOU
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