Speaker 1: One of the most important bodies of knowledge that marketing and communication professionals need to develop is that of buyer psychology and buyer behavior. In this short and extremely simple presentation, you'll learn, first, why the study of buyer psychology and behavior is crucial to modern marketers. Second, how a clear understanding of the purchase decision process can help you not only serve your target audiences better, but also how it will help your organization prosper. And third, how marketers use communication to influence the purchase decision process. Before we discuss the need to understand buyer psychology and behavior, let's make a distinction between the two. Buyer behavior is what buyers do, which means it's pretty straightforward and actually rather simplistic, although it's not always simplistic to measure or understand. Buyer psychology, on the other hand, is much more complex. It involves why buyers do what they do, how they think about what they did, their attitudes toward products and brands and retailers and service processes, their beliefs about product comparisons, their feelings toward advertisement, their comfort or discomfort with communication technologies, their motivations, interpretations, intentions, regrets, and their feelings toward engagement, connection, community, marketers, salespeople, products, campaigns, messages, words, imagery, music, sound, etc. Buyer psychology is difficult to measure, difficult to know, difficult to understand, and difficult to manipulate. In fact, although it's seemingly counterintuitive, it's often much easier to get a buyer to do a particular task than it is to get the buyer to think a particular way. Making the distinction between buyer psychology and buyer behavior is important so that marketers can direct their various efforts, communication and otherwise, in an appropriate way so that the intended results are achieved. So why understand buyer psychology? The reason to understand buyer psychology is that aspects of what buyers think often precede what they do. In the case of attitudes and beliefs, there's the understanding that attitudes and beliefs will precede behaviors. In general, scientists agree that attitudes and beliefs drive our behaviors, whether we're conscious of the connection or not. When we discuss attitudes, we can talk about the three-part view of attitude, which delineates the three parts of cognitive, or fact-based attitudes, affective, or emotion-based attitudes, and cognitive, or behavior-based. Normally, unless you're a serious follower of psychologist B.F. Skinner, you'd probably focus only on the first two, cognitive and affective. Cognitive portions of attitudes are those that are based on fact or opinion regarding product attributes, features, benefits, etc. Affective portions of attitudes are based on emotions and feelings, whether positive or negative. We know that combinations of cognitive and emotional factors combined form attitudes, and that those attitudes are associated with particular behaviors. For marketers, if we can influence an attitude in a particular direction, we're more likely to be able to influence an associated behavior as well. It's hard to influence what you don't understand. If you don't understand buyer psychology, we'll be less likely to be able to influence it. Thus, we should spend a great deal of our marketing time learning and studying our target segments in order to understand them well enough to create marketing communications that will sway them toward buyer behaviors that will benefit our marketing goals. For businesses to serve their customers well and to remain viable and profitable, they need to employ marketers who understand their customers and understand what motivates those customers to buy from them instead of the competition. After that, communication efforts can be conceptualized, designed, and created that will provide the appropriate motivation. What about seller psychology and behavior? There's a strong argument that marketers also need to understand and study the seller part of the marketing exchange. How and why do your salespeople think and act the way they do? What about your marketing managers, your advertising staff, your social media coordinators? As you work to facilitate exchanges between your marketing teams and your customer base, you'll need to influence, persuade, and inform in ways that facilitate those exchanges in effective and efficient manners. You're not just influencing your customers, but you're also influencing your marketers. How do marketers learn about buyer psychology? Marketers learn about buyer psychology through surveys, field experiments, focus groups, in-depth interviews, and observation. They pore over data reports, examine distributions, create interactive longitudinal graphics, and make calculations. And then they make inferences as to what insights they can pull from their efforts that will help them understand their next potential steps in trying to get the right message, in the right way, to the right people, at the right time, under the right circumstances. In other words, it's not an easy task. Let's talk for a minute about the purchase decision process. Now, oftentimes people argue whether or not it should be called the purchase decision process or the buying decision process, but you could make an argument that it really should, in its most generic terms, be called the exchange decision process, because we understand that some marketing exchanges don't really involve what people would consider to be a purchase. If you look at marketing textbooks and talk to marketing scholars and marketing industry people, they'll tell you that there are a variety of steps in this process. Some will say three, some will say five, or seven, or 7.5, who knows. All that matters really is that you understand the process. In our particular example, we'll use a three-step process that has sub-steps involved in it as well. Another thing to consider is for whom this purchase decision process works. Well, it works for pretty much everyone, whether it's B2C, business to consumer, or B2B, business to business, or even C2C or C2B. In other words, there are some consumers that may create something that businesses will buy. It doesn't really matter which environment it's in. It works regardless, because it's basic human behavior in making these types of decisions. So let's go through this, and let's give an example here of what would be the first step in a purchase decision process. I always like to use an example of paint. Now let's say that we're going to paint our house, and what is the first step that we would take? What's the first step in our process? If I were to ask this in a classroom, then students would say, oh, what's the color of the paint? And someone else would say, no, it's where we're going to buy that paint. Another would say, no, it's the square footage, the area that we'll need to cover, so we'll know how much paint to buy. Well, there's a step that happens before all of that. And that step is called need or desire recognition. It's the idea that we need to recognize that we have a need or desire before we're going to go out and try to purchase something. Now there's two ways that that can happen. It can happen with an internal stimulus or with some type of external stimulus, and various external stimuli exist. Let's go to the external first. In the case of paint purchase, it's fairly simple to think that maybe I look at my wall and I notice it's looking a little bit grungy and I need to paint it. Maybe I'm eating my cereal in the morning and a paint chip falls off the ceiling and lands in the cereal and I think, yes, it's time to paint. Maybe my neighbor paints his or her house and now I feel the need to keep up with them and paint mine as well. Maybe I'm selling my house and I have to paint it before I sell it. Maybe I just bought a house and I have to paint it now that I move in. Maybe I'm going to the store and as I'm walking through Home Depot or Lowe's, I notice the paint aisle and I think, you know what, it'd be a good time to paint the house. Maybe I see an ad that paints on sale. Maybe I'm just driving by and I notice some really beautifully painted houses and think I'd like to paint mine the same way. There are a number of different external stimuli that might help me to have this recognition that I have a need or desire to paint my house. As for internal stimulus, in this particular case it might be harder to understand. Let's take the case of eating lunch. It's fairly easy that if I'm sitting at my desk and then I start feeling hungry, I have this internal stimulus that I have a need or desire to purchase some food. For the case of the paint, it could be, I guess, you could argue that you could be laying on the beach somewhere and then all of a sudden you just jump right up and you say, wow, I got to go paint my house. But it's more likely you'll get some type of an external stimulus that will inspire or motivate this recognition for this need or desire to paint your house. So then we can go to the next step. We have to formulate or develop this need or desire. In other words, we have to understand what type of paint do I need to buy? What color do I need to buy? How much do I need to buy? Where do I need to buy it? To do this, normally, we have some type of information search. Now, information search can also be internal or external. It could be that when I think about buying paint, I think, oh, I know I need to go to Home Depot or to Lowe's or whatever happens to be close to my house. Or it could be that maybe I'm trying to purchase plumbing services and I'm new to an area and I'm not sure who's a good plumber and who's not. So I check with my neighbor and I ask my neighbor who's good. I might go on and look online and try to find the best deal or find someone who has 24-hour service. Whatever it is, I'm going to do some type of information search in a variety of ways. And you can see already that this is going to make marketers excited about what types of communications they'll put out there. We also have to do some type of alternative evaluation. This just means that when you consider all the places you could go to buy paint and all the different colors and all the different styles of paint and all the different ways to apply the paint and all the different ways that you could either do it yourself or ask someone else to help or hire someone, that there's a lot of decisions to be made. And for the buyer, then, that person has to evaluate these alternatives. There's a lot we could say about the types of alternative evaluation that exist. It might be that I do what's called attribute or feature processing. This means that I might consider what are the features that a particular product has. Let's say I'm going to buy a new laptop and I think that, well, I might look at the processing speed. I might look at the hard drive capacity. I might look at the screen resolution. And I might have these different features and then look or evaluate or assess all of these different brands or models across those particular features. I might choose the feature that seems to be most important to me or maybe it's just the most relevant or perhaps at that moment the most salient or noticeable. I then can go across the different laptops until I find the ones that I think stand out over the others. Or perhaps instead of doing this attribute or feature type of processing, I do what's called brand or model processing where I look at one computer, assess the various attributes of that one computer, and make an overall judgment about that computer before I move on to the next one. Either of these works. Consumers use different types of ways that they do this. Oftentimes in B2B situations, you might have someone who does it more scientifically. They put it into a spreadsheet and then they try to assess the importance of each of those attributes or features and then make some type of a calculation at the end. Either way, the most important thing for marketers is to understand how are people in your particular target market making their evaluations of their alternatives. As you understand that, you'll understand better how to present the appropriate information. Another way to think about alternative evaluation is to think about whether it's specific or abstract. Do people in your industry, your types of buyers, does your product end up being evaluated in a way where people are very specific as to what they're looking for? Do they look at all the details of the product and then make detailed comparisons against the competitors? Or is it something more abstract? Have they backed away from what they're looking at? If I were to say, well, how am I going to make a decision on, for what we often term non-comparable alternatives, say I'm going to get a $2,000 bonus and I think, do I want to buy a new home stereo system? Do I want to go to Jamaica and have a little vacation? Or do I want to put it into the bank and then collect some interest? In this particular case, I can't make the type of detailed comparisons because I can't really compare the decibel level of my home stereo system to the temperature in Jamaica to the level of interest, however low it might be, at the bank. More likely I'm going to have to back away from this and have an evaluation of perhaps overall satisfaction or overall value to me, or if I was an economist, I might say overall utility of those three choices. In all cases, marketers need to understand what are the alternatives being evaluated and then understand how the people are making those evaluations. Without that, marketers cannot make the right decision as far as what communications to provide to these particular or to these prospective customers. The last step is need or desire fulfillment. Now fulfillments instead of satisfaction. Some people will say it's need or desire satisfaction, but you can be fulfilling your purchase decision need without actually being satisfied. Maybe you go to dinner somewhere, you eat the dinner, now you don't have any other need to eat, but you haven't necessarily been satisfied. There's two steps I want you to think about. The first is the actual making the purchase or the exchange. So that's our first step perhaps, and it doesn't mean that we always make the exchange or purchase before we actually consume the item. It could be in a restaurant or getting a haircut that you actually have the service performed or you eat the food prior to actually finalizing the purchase, but normally we make the purchase and then we also have the consumption and usage. This consumption or usage could be something that's quick and it's over within an hour or two, like watching a movie in a movie theater, or it could be something that lasts for years like buying a car or buying a house. In addition to making the exchange and having this consumption or usage, there's also an evaluation. There's a post exchange or post purchase evaluation, which is separate often from the post consumption or post usage evaluation. It may be then that one of them you're happy because you think, wow, I've got a really great deal on this product that I just purchased or on the car that I bought or on the movie ticket that I just purchased. But then after the consumption or usage, you change this evaluation or actually what you do is you actually have a separate evaluation where you feel, wow, it's not as good of a deal as I thought it was before, or maybe it's even a better one than you thought. As we go through this purchase decision process, you can apply this to B2B, B2C, to all types of purchases in all types of industries. In every case, there must be a recognition of a need or desire. There must be some type of formulation or development of that need or desire, no matter how fast it happens, and then also hopefully in our case, then we'll have some type of fulfillment of that need or desire and a purchase will be made, and there'll be post purchase and post consumption or usage evaluations. What's important for us to understand is marketers, how marketers can influence the purchase decision process. So let's consider first those three steps and their sub steps in the purchase decision process, and let's consider marketers. Now we could talk about the basics of marketing. We could talk about perhaps the four Ps or the four Cs or the four As and say, what can marketers do on their side to somehow influence that process? We could also talk about a number of other things like image and brand management, product display, expectation management, education, emotion management, service delivery. There are a number of ways that marketers have a number of tools that they can use to influence this process. The other thing that's important to understand is we truly are trying to influence the process and not just the outcome. The idea is to influence the outcome by influencing the process. For example, maybe what we do is we try to influence that need or desire recognition. Can we get people to feel that they have to paint their house more often? It happens in all sorts of industries where we try as marketers to instill in someone this recognition that they have a desire for our product. This also applies to the need and desire formulation step and it applies to both information search and alternative evaluation. For information search, can we guide our buyers in a certain way that gives them information that helps us to promote our particular product or brand versus a competitor's product or brand? The same thing goes for alternative evaluation. Can I present my information in a way that helps my particular product or brand look more appealing than it would if I were to promote that or provide that information in a different way? With respect to need and desire fulfillment, we can obviously make or provide communications that will help someone make that exchange or make that purchase as well as influencing their post-exchange evaluation. A lot of times when we're looking at satisfaction, it's really a comparison between the expectation and the evaluation that we make. As far as consumption and usage, the same thing happens. Does a buyer consume in a certain way that helps them be more satisfied in the end and can the marketer help them do that? Also, can a marketer help them evaluate their consumption or usage by talking about on what aspects or features or benefits they should be evaluating this particular consumption or usage experience? Overall, it's clear that increasing your understanding of general buyer psychology and behavior is a necessary step in mastering marketing. In addition, it's critical to apply your knowledge to your industry in a way that helps you to understand how and why your customers or potential customers think and act like they do. Finally, you need to take your understanding and put it into action by using it to develop insights that will help guide you to conceptualize, design, and create marketing communications that will nudge or guide or even straight out convince your customers to think and act in ways that benefit them and hopefully benefit your organization as well.