As a small business, you are always on the lookout for a competitive advantage. You’re trying to find some way to compete with businesses that have a bigger marketing budget. This is especially difficult when first starting out. So, where do you turn to learn more?

To the science of consumer behavior.

Consumer behavior is important for small businesses because it helps them understand why their customers buy a product or service. Businesses that understand their consumers are able to create better products or services that are customized to a customer’s needs. It allows them to market those products/services to customers who are ready to buy.

What is consumer behavior

Consumer behavior is the study of why we purchase what we purchase. It uses psychology, biology, chemistry, and economics to understand why we choose one product or service over another. Consumer behavior looks at demographics, personality lifestyles and behavioral variables (such as usage rates, usage frequency, loyalty, brand advocacy, and willingness to provide referrals) to try and understand people’s wants.


Why is consumer behavior important

76% of consumers expect companies to understand their needs and expectationsStat from Salesforce

In 2020, with the popularity of social media and review sites, customers expect businesses to understand their needs and to also go above and beyond to WOW them. It’s never been easier to start a business and if you don’t meet the customer’s needs then another company will. That may seem like a hard task, however thanks to these same social media sites (along with analytic software), we now have more data on our customers than ever before!

Smart businesses use consumer behavior data to determine their marketing plan. By focusing on data and science, you are able to increase your sales by optimizing your website, content, ads and any other way you interact with your customer. Using consumer behavior data in your marketing plan will help you:

  • determine what type of content to create and whether it should be written or video
  • the types of stories to tell in your ads
  • how to adjust your product or services to meet your customer’s needs
  • how to provide an excellent customer experience


In fact, 86% of buyers are willing to pay more for a great customer experience. 

One of the most important reasons to learn about consumer behavior is to help you beat your competition. By asking the right questions you can begin to learn why your competitors are getting more business than you. You then reverse engineer their strategy to create a more valuable offer that your customers can’t resist.


What affects consumer behavior

Women consumer with laptop and credit card ready to buy

Consumer behavior is affected by a variety of factors and is different for every person. In fact, depending on the consumer’s state of mind and location, the same ad may cause them to take action one day or lose their mind another day. Some of the most common factors influencing buying behavior are:

1) Personal preferences

Consumer behavior is influenced by likes, dislikes, priorities, morals and values. In certain industries, personal opinions are extremely powerful. Advertisements can try to persuade behavior but it’s hard to make someone go against something that they have felt for the majority of their life. You are better off trying to understand your customer’s personal preferences instead of trying to change them.

2) Environmental factors

Environmental factors are not only the physical location that a customer is in when they are exposed to a product or service, but also the people that they are with. What a customer’s friends, family, colleagues, neighbors and acquaintances think or do can play a significant role in their buying decisions. Sometimes peer pressure causes a customer to make a poor choice, while other times it’s being around people that influence them to make a more informed choice.

When is a person most likely to make a stop at their favorite fast food place? When they are out with their friends or when they are alone driving home with no one else? None of these environmental factors are inherently good or bad, it’s how they are used with the other factors that determine consumer behavior.

3) State of the economy

The more expensive the product (homes and cars), the higher possibility the state of the economy plays a role in consumer behavior. When the economy is thriving, consumers will feel more confident in spending money on products and services.

The state of the nation’s economy is not the only factor affecting whether a customer will buy, there are also more individualized factors including personal income, credit debt, liquid assets and savings.

4) Marketing campaigns

Marketing campaigns are everywhere today. Most of these campaigns you don’t even remember. However, you do remember the two extremes: the good ones and the bad ones. A great marketing campaign could be one that convinces you to switch brands or one that you can’t get out of your head so that when you need that service, they are the first company you call.

A bad marketing campaign may not really be bad, but it was just bad or ineffective for that particular consumer. It may not have been the right time of their life to see that ad or maybe they were just in the wrong environment.

Consumer behavior is a science and it’s always changing. However, because it is a science, we can use data to test and measure our marketing efforts. Then, we can tweak our actions to get the desired results if needed.


How to Collect Consumer Behavior Data

There are a few sources to use to collect consumer behavior data.

Analyze Public Data

One of the easiest and fastest ways to obtain data on your consumers is to use public data from the internet. One of the largest sources of this data is a search engine. Looking at different trends and the search volume of different products will allow you to get a better idea of what your customers are looking for.

This is the largest source of data and it is the easiest to access. However, it is also the least specific to your business. This step is great for when you are first starting your business and don’t have much data on your customers.

Analytics From Your Website or Ad Campaign

Business owner looking at website stats

Another great source of consumer behavior data is from your website or ad analytics. This is a step above looking at public data from search engines. These customers have gone to your website and displayed an interest in your product or service. Your website analytics will provide information on age, location, device type, gender and interests along with how they found your website.

This can be a really powerful tool! Especially when it is combined with other methods of collecting consumer behavior data.

Direct Surveys, Questionnaires & Interviews

To take your consumer data collection to the next level, you need to have a conversation with and survey your past customers. Who better to determine why people buy your product than the people who have bought from you in the past? Surveys and questionnaires are helpful in gathering information about a consumer’s opinion and past purchase history (how many times they have purchased a product).

Interviews take this collection method to the next level! They allow you to work 1 on 1 with a customer to learn about their opinions about your product/service and industry.



As a small business it can be difficult to find your competitive advantage but focusing on consumer behavior will help you do just that. By understanding your customer’s buying behaviors you are able to present your product/service in a way that highlights the benefits for that customer.

We’ve talked about the importance of consumer behavior and how customers expect businesses to understand their needs. In fact, consumers will often pay extra for a product or service that not only meets their needs but also provides an amazing experience.

We went over factors that can affect a customer’s buying behavior and how to find the data to start analyzing your customers. If you want to take your understanding of consumer behavior to the next level then sign up for my newsletter to learn about upcoming events! Sign up below.