Speaker 1: What's up brand builders, Stephen Horahan here at brandmasteracademy.com and in this video you're going to learn five factors influencing consumer behavior so you can understand what really drives customers to buy so you can influence and stimulate those very decisions. Now if you're new to the channel and you want to build brands that go beyond the visuals using strategy, psychology and creative thinking then you're in the right place. Hit that subscribe button and the notification bell. If you want to fast track your results make sure you grab the pro brand strategy blueprint. It's a free download and the link is in the description. Now I created a video recently called what is consumer behavior and how to influence it. Now if you haven't seen that video I'll leave a link in the description below you should check it out but in a nutshell the study of consumer behavior in marketing determines how consumers make buying decisions to choose their products services and their brands. The more you know about the decisions that are most important to your audience and the thought processes, emotions and motivational factors behind them the better placed you are to influence them. So in this video I want to show you five of the most important factors influencing customer behavior. Now the brand of car that you bought is different to your friends and the brand of tv that you bought is different to your neighbors but what causes this exactly? What is the reason behind you choosing a different car to your friend or you choosing a different tv to your neighbor or more specifically what are the buying decision factors influencing your decision to buy and why are they different from your friends or your neighbors? Now typically there are five core factors that influence the decision to buy which are psychological factors, social factors, cultural factors, economic and personal factors. So let's dive deep into each one of these so you can understand them a little better. Now every decision that we make in life whether it's a decision to buy, a decision to have children or a decision to go to the pub on a Friday are influenced by our psychology. So let's explore these psychological decision making factors in a bit more detail. The first one is motivation. Now how motivated we are to do something has a high degree of influence on whether we do it or not. Now in Maslow's hierarchy of needs he outlines five different levels of human needs and at the bottom are the basics like food and shelter and at the top are self-actualization. Now if someone was worried about making rent to keep a roof over their head then that would be the focus of their efforts rather than trying to find a purpose in their lives and likewise if I'm unhappy with my body weight then I'm far more likely to be motivated to get myself booked into a weight loss boot camp than my neighbor who is as thin as a rake. Now how motivated we are to do something is the point of tension between where we are now and where we want to be. The next factor is our perceptions. Now our perceptions are the way we regard, understand, interpret or see something based on our direct or indirect experiences. So for example if my experience with an acquaintance is that he always follows through on what he says he's going to do well then my perception is that he's reliable and he can be trusted. So perceptions are everything in branding so perceptions become reputations which become brand equity which is the willingness to buy or pay more for a brand than its competitors. The perception of Apple as a brand is that they're a modern and innovative company creating superior products which is why they can price their products at such a premium to their competitors. Now the more effective brands are at positively influencing their audience's perceptions of the brand the more they influence the buying decision. The next buying decision factor is learning. So what we learn through our experiences can change our buying behaviors and influence our future buying decisions. So for example if you bought a pair of jeans that lost their shape after a few wears then you'd be far less likely to buy that product or even that brand in the future and this is why the brand experience plays such an important role in retaining customers long term. The better the brand experience the more they learn to associate a positive experience with your brand and the more likely they'll be to purchase again in the future. Now the worse the brand experience is the more likely your customer will be to learn from that brand experience and change their purchasing decision in the future i.e. they just won't come back for more business. Next up is attitudes and beliefs. Now attitudes and beliefs are really powerful decision making factors because they tend to be born from deep experiential emotional or traditional enduring principles which are really hard to shake. They're often unshakable. You'll tend to find that consumers have these deep beliefs about these feelings. So in other words the attitudes and beliefs are next to impossible to change and the products and brands that they buy tend to either align with these beliefs or they don't. So because these attitudes and beliefs are so strong and so emotionally charged brands that understand their customers beliefs can align with them through their brand messaging and that's often really really powerful. If you're able to do that if you're able to align with your customers beliefs through your messaging then they will be drawn into your brand and you know they'll have this deep emotional connection to the messages that you're putting out into the market. The next buying decision factors are social factors. Now as humans we are social creatures. We've learned to survive as a species by working together and the impact of our peers and their perceptions of us is really really important to us. We all want to feel a sense of belonging and that we have our place in society and we're part of something bigger than ourselves. So rightly or wrongly we place a high level of importance on our social standing and what our peers think of us. Now of course our purchasing decisions reflect this as well with factors including many things such as family. Now family for many people is their foundation and their reference point for anything from a choice of partner to a choice of lipstick. Now if your new partner gets the thumbs up from your family then it's game on in most cases and the same is true for brands especially in the food and beverage category. Some heritage or traditional brands make it into the coveted family brand status that is their offspring from a family brand household will likely to continue to use that brand throughout their lives. So getting the family tick of approval is a common factor influencing that buying decision. The next social factor is reference groups. Now reference groups or peer groups are groups of people that we tend to associate with. So these groups could be from school, from work, from clubs, social, sports events or just groups of friends or acquaintances. Now people within these groups often have a similar pattern of purchasing behavior and they may be influenced by a popular leader of the group. So for example growing up as a kid with my friends we all had the same sense of taste, we all had the same taste in music and most of my childhood friends were the same and the kicks of choice at the time for us were Converse All-Star and the purchasing decision for my bright red high tops was deeply influenced by my group of mates. The next factor are culture and traditions. Now human behavior is largely a result of learning. We learn from our teachers, our family, our friends and for the most part in the early years anyway these learning experiences tend to come from the same culture. In other words the values, preferences and behavioral patterns that we adopt are passed down through tradition and culture. Culture and tradition therefore influences many of our purchasing decisions with many different factors. So let's take a look at a few of those. The first is culture. Now our culture shapes our basic values, our requirements, our beliefs, our wants, our preferences and our behaviors as well. In other words our culture shapes who we are and who we are determines what's important to us in life and what's important to us in our purchasing decisions as well. Then we have subculture. Now every culture consists of smaller subcultures that people identify with more specifically than they do their overarching culture. So although subcultures share the same overarching beliefs as the culture it's formed under they also have more specified beliefs that often differ from the rest. Now messaging speaking to subcultures will likely resonate more with that subculture than messaging to the overarching culture. Now this is the exact same as messaging to market segments versus an overarching market segment. So the more specified you get the more they're going to resonate with your messaging. The next cultural factor is social class. So the social class of a person often influences what they buy. Social class isn't determined by a simple factor such as income rather a combination of factors including occupation, education, power, lifestyle etc. So many purchasing decisions of Mercedes-Benz cars have as much to do with the social class association that it provides as the quality engineering that it offers. The next core factor are economic factors. Now economic factors are hugely influential when it comes to purchasing behavior as they determine the means available to the consumer. Now of course there are some purchases that consumers simply cannot make not because of their desires to buy whatever it is on offer but due to their economic factors which include their personal income and much much more. So let's have a look at personal income first and foremost. So how much income a consumer earns in a year is a direct determinant of how much discretionary and disposable income that they have. So in other words how much someone earns determines the means that they have to spend and the freedom they have within their buying decisions. The next economic factor is family income. Now family income and personal income are often interconnected but not always. The more people within a family that are working the more likely the cost of living will be shared and individual spending capabilities will be enhanced. So ultimately this means more disposable income as a family and more disposable income as individual consumers. Next up is income expectations. Now expectations of increased income can influence buying decisions as well. So any expected increase in income often becomes mentally available to the buyer before the funds are actually physically or digitally available. So for example a woman might see a nice pair of shoes that she wouldn't normally buy because of the high price but with her expected salary increase around the corner then she's happy to put it on the credit card and wear the cost later on. The next economic factor is the savings plan. Now savings in the bank or the contribution to savings can play a major role in the buying decision. A decision to save now rather than spend will reduce the amount of available income in the buying decision. If the savings is part of a longer term plan then purchasing behavior and the person's overall purchasing profile will be affected. The next core buying decision factor are personal factors. Now personal factors influencing the buying decision processes are circumstantial, situational and behavioral. So they set the scene and provide insight into the life of the customer which together can play a role in how decisions are made. So let's take a look at some of these factors. First up is age. Now the age of the customer or the consumer is an overarching personal factor in influencing buying decision. So we all have buying decision patterns which are likely directed by our age. So for example a 13 year old teenage boy is less likely to spend money on shaving products than he will when he's 23 and that's just a simple age consideration when it comes to that buying decision factor. The next factor is occupation. The occupation of a person often influences the buying decisions of individuals. So for example a blue collar professional working downtown in the finance district will be far more likely to invest in a professional and formal wear than an engineering consultant working on site. The next personal factor is lifestyle. Now a person's lifestyle tells you a bit about the way they live their lives which includes their activities their interests and hobbies and ultimately how they engage in the world around them. Lifestyle branding that promotes a person's ideal lifestyle aims to influence the buying decision of their target market by aligning with the lifestyle that they're passionate about. So these are the five core decision making factors that influence consumer behavior. They are psychological factors, social factors, cultural factors, economic and personal factors. So the next time you sit down to determine your audience or to create a customer avatar don't just stop at their demographics and their psychographics and call it a day. Dig deeper to find out what factors are most important to them in their buying decision that will ultimately impact their decision to buy. If you want to learn more about how to define your target market so you can better resonate then this video will help you out. Until next time brand like a master and I'll see you in the next video.