If you currently have a business, whether it’s a small shop or a small online gig, it’s important that you’re able to analyze your customers and interpret their behavior within a scope of time. Being able to do this effectively can lead to a good marketing plan or prepare you for growth opportunities.
For instance, the number of people who pay for goods and services online has increased significantly over the past three years. Forecasts by GlobalData suggests that e-commerce value is expected to grow at a strong compound annual growth rate of 17% between 2021 and 2025. You can say that online shopping is now a huge part of Filipino culture just as much as going to the mall. In other words, the internet has become a “home mall” for Filipinos. This brings a huge opportunity for people to start a business at their very own homes without worrying the extra costs of maintaining a physical store.
These sorts of trends are worth noting. Studying consumer behavior should be done regularly by any business operator. To understand more about your customers, you must ask these practical questions on every sale you make:
- Who buys?
- What was bought?
- Where was it bought?
- When was it bought?
- How was it bought?
- Why was it bought?
It’s good to keep detailed records of your customers purchases so that overtime you may do a simple analysis to be able to plan out your future strategies.
Was it a man or a woman? Young or old? A worker or a student? Rich, middle class, or poor?
Knowing the characteristics of your customers can help you pinpoint the best target market/audience for your products and services. You will be able to know which demographics are more likely to transact with your business and even create marketing strategies that appeals to those primary prospects.
What was bought?
Was it the new product in your stocks? An imported item that no other local competitor have? Was it the most expensive thing in your inventory? Food or non-perishables?
This should give you an idea of which products are the “best sellers”. You can use the popularity of that product to leverage the other products that are not performing quite well.
For example, you own a coffee shop and you realize that your iced coffee is quite popular. But your cakes are not doing so well. What you can do is offer your customers a special discount on a slice of cake for every two iced coffees purchased.
Knowing what items are popular and what items are not can tell you which ones to continue selling and which ones to discontinue. This makes you efficient with your production costs and efforts.
Having a tally of items that were bought can also give you an idea of how credible you are to your customers. If your customers are buying the expensive stuffs, that means they trust you enough to give you a big chunk of their budget. Thus, you can offer them your other expensive things too. If you’re successfully selling something that your competitors don’t have yet, that means you have an early advantage of the market and you should reach out immediately to other potential buyers before your competition steps in.
Where was it bought?
Was it bought online or in a physical store? Was it in Facebook Market or Shopee?
Understanding the strengths and limits of your business’ location can help you think of strategies on how to reach potential customers. Knowing where the buyer wants to make the purchase is one step closer to a successful sale.
If your shop is located in a gated residential community, then chances are the number of your customers are limited from the same area as you are. Studying how to deliver your products outside of your neighborhood will be essential to the survival and growth of your livelihood.
If the bulk of your customers is from online, then perhaps investing in digital marketing would be more efficient than traditional marketing. Some businesses that are practicing digital marketing are even partnering with social media influencers for brand awareness. This gives you a further reach.
When was it bought?
What time of the day was it bought? Was it during rush hour on a weekday? Was it during the weekend? Was it nearing the Christmas Season? Before the beginning of the school year? How about during election campaigning period?
Timing matters. This obvious advantage of timing can be witnessed in the flexibility of Divisoria vendors. Before the school year starts, you’ll see them selling schools supplies. Before Christmas, you’ll see a bunch of Christmas trees and party materials everywhere.
Timing even saved Max’s Restaurant from profit losses and helped them stay marketable. In around mid 2010, the famed chicken restaurant had an oversupply of chicken in their inventory. This was costing them huge sums of money just to keep them in cold storage rentals. Not to mention, they were expecting lower profits due to the upcoming start of school classes in June. This income insecurity based on unfavorable timing is what’s called “lean season”.
Fortunately, one of the ways Max’s Restaurant was able to turn this issue around was to take advantage of the upcoming Father’s Day on June 18. They came up with an Eat All You Can Chicken promo from June 17 to July 17 of 2010. They also ingeniously offered this promo to their customers at the most profitable time of the day which was during dinner, starting at 6pm to 10pm. The promo was a success and fixed the problem they were facing.
How was it bought?
Did the buyer used cash or credit card? Did they opt for paying through e-wallets such as GCash or GrabPay? How many of them has asked if you also accept Alipay or cryptocurrency?
These payment options are important to have for your customers. We may still say that “cash is king” in the Philippines. But many young consumers are now switching to the convenience of paying digitally. If you are not able to cater the option they’re looking for, that could mean one failed sale for you. Your customers can easily switch to your competitor who can provide that convenience for them.
According to studies from Statista, a leading provider of market and consumer data, the Philippines had 24 million e-wallet users in 2020 and is forecasted to have more than 75 million user by 2025. This makes the Philippines one of the countries in Southeast Asia that has a sustained growth in mobile transactions. It simply means that all businesses in the future, whether small or big, would have to have digital payment options to succeed.
Why was it bought?
Was it an essential item that was purchased or non-essential? Was it a trending item? Was it bought because the customer was given a good discount? Does it sovle a problem they have or were they just impulsive-buyers?
This question now focuses on the customer’s needs. One must keep in mind that running a business is not just about making a profit for yourself. It’s also providing goods and care for the essential needs and desires of your customers.
Understanding the “why’s” behind a consumer’s purchase can be a bridge to build rapport. Windows of opportunities are created through this relationship where your customers are comfortable to comeback to do business with you again.