In order to successfully sell your goods or services, you need an idea of why consumers behave the way they do when they make purchases. For example, knowing how much your customers have to spend and what their most important needs are can help you create product selection and pricing strategies that lead to more sales for your business. Additionally, learning about the psychological and sociological aspects of your customer's buying choices can give you insight on how they see your brand and how loyal they are to it.

There are several models of consumer behavior including the economic model, the learning model, psychoanalytical model, and the sociological model.

The Economic Model of Consumer Behavior

The economic model of consumer behavior focuses on the idea that a consumer’s buying pattern is based on the idea of getting the most benefits while minimizing costs. Thus, one can predict consumer behavior based on economic indicators such as the consumer’s purchasing power and the price of competitive products. For instance, a consumer will buy a similar product that is being offered at a lower price to maximize the benefits; an increase in a consumer’s purchasing power will allow him to increase the quantity of the products he is purchasing.

Maslow's Hierarchy of Needs

This model is based on the idea that consumer behavior is governed by the need to satisfy basic and learned needs. Maslow stated that people base their actions based on fulfilling certain needs and that they have to satisfy the lower level needs before reaching for the higher ones. Lower level needs include food, clothing and shelter, while higher ones include having a feeling of prestige. Thus, a consumer will have a tendency to buy things that will satisfy their needs and provide satisfaction. A hungry customer may pass up on buying a nice piece of jewelry to buy some food but will later go back to purchase the jewelry once her hunger is satisfied.

The Psychoanalytical Model

The psychoanalytical model takes into consideration the fact that consumer behavior is influenced by both the conscious and the subconscious mind. The three levels of consciousness discussed by Sigmund Freud (id, ego and superego) all work to influence one’s buying decisions and behaviors. A hidden symbol in a company’s name or logo may have an effect on a person’s subconscious mind and may influence him to buy that product instead of a similar product from another company.

The Sociological Model

The sociological model primarily considers the idea that a consumer’s buying pattern is based on his role and influence in his society. A consumer's behavior may also be influenced by the people she associates with and the culture that her society exhibits. For instance, a manager and an employee may have different buying behaviors given their respective roles in the company they work for, but if they live in the same community or attend the same church, they may buy products from the same company or brand.

Consumers will buy goods based on a number of different types of behavior. Knowing these behaviors is key when developing marketing strategies for your business.

Psychological Factors That Influence Consumer Buying Behavior

By: Annie Sisk

Reviewed by: Jayne Thompson, LLB, LLM

Updated November 08, 2018

If you want your business to be successful, you must first understand what drives your targeted customers in their purchasing decisions. How do they decide which product to buy, or when? What makes them choose one company over another? To maximize your sales revenue and grow your business, it’s important to leverage the four key psychological factors that influence consumer purchasing: motivations, perceptions, experience and beliefs.

Motivation Describes the Customer's Willingness to Buy

A consumer’s motivation is the basic degree of the psychological drive behind a specific purchase. If the consumer’s motivation is high, that basically means that the level of need, or the consumer’s perception of that need, is fairly strong. Given a high degree of motivation, the individual will actively seek to satisfy that need by making that purchase.

Consumer motivation is related to the “Hierarchy of Needs" proposed by psychologist Abraham Maslow. This theory states that human beings actively seek to satisfy physical needs first, followed by safety, social, esteem and self-actualization needs, in that order. Businesses that successfully speak to these needs, and fill them, will motivate consumers to buy their products.

Perception Influences the Way a Consumer Sees the World

Perception is essentially the way a person selectively views, processes and interprets the larger world or any part of it. It’s basically how we as human beings organize and make sense of information to form some sort of worldview.

Consumers also have perceptions of themselves that may affect a particular purchase. For example, people who view themselves as having exquisite taste are willing to pay more for a specific brand or product that is perceived to be “the best.” By the same token, consumers who pride themselves on being great bargain hunters may choose a lesser-priced product, even though they might otherwise prefer the pricier option.

It’s human nature for consumers to make all kinds of associations, both conscious and subconscious, from their experiences. Once a brand has established itself as having a certain personality – for example, Walmart and other similar stores' low-cost positioning – it’s difficult to overcome that in the marketplace. The consumer perception is that products from these stores are cheap and on a subconscious level, the products are therefore lower quality.

By the same token, a diamond dealer may be quick to point out their stones come from Antwerp instead of Sierra Leone– where the stigma of "blood diamonds" prevails – in order to avoid negative consumer perceptions.

Experience Describes the Impact of Familiarity on Decision Making

Consumers are above all human beings, and all human beings are products of their experiences. We catalog each experience we have as either good or bad. Then we recall that experience and how we categorized it when a similar situation arises. These experiences influence a shopper’s behavior by changing the way the consumer reacts to products similar to those they’re familiar with. For example, many consumers choose to buy Toyota cars because they have had good experiences with their previously owned Toyota cars.

Companies that focus on the consumer experience earn repeat business from those customers. The consumer doesn’t need to look anywhere else to solve that specific problem or meet that need. Prior experience often outweighs the fact that the competition may be cheaper or even better in some cases.

Belief Describes the Consumer's Attitude Towards a Brand

A consumer’s beliefs and attitudes greatly influence the buying decisions that consumer makes. Beliefs are the way people think about a particular product or brand, while an attitude is the individual's consistently favorable or unfavorable evaluation, tendency or feeling about a product or brand.

These beliefs and attitudes shape the consumer's perception of the product. It can be tough for a business to overcome or change those beliefs and attitudes. That’s because they stem from the individual's personality and lifestyle. They’re inherently personal and connected to the consumer’s sense of self.

Consumers often block out or ignore information that conflicts with their beliefs and attitudes. They tend to selectively retain information or even distort the information to make it consistent with their previous perception of the product.