Despite the rising cost of living, Australians spent big this Christmas. Data from Monash University estimated Aussies were on track to spend 13 per cent more on immediate family members than they did last year, and a whopping 30 per cent more on friends and extended family members.
So, what can, or should, we expect from Australian consumers in 2024?
IMPACT’s behavioural consultant, Kris White, believes in times of uncertainty, our core values become more central to our choices.
The question then becomes: how well do you know your customers?
In times of economic instability, our behaviours become, unsurprisingly, more price sensitive. Kris suggests revisiting the ‘4 Mindsets of the Customer’ established by the Marketing Science Institute in 2017 as a solid starting point. The paper distils 50 years of research on judgement and decision making into four clear categories.
#1 The Ideal Point Mind
This customer knows exactly what they want. Whether it’s from past purchases or experiences, research or recommendations – they have an ‘ideal’ or ‘perfect’ choice in mind that will be hard to beat.
The Ideal Point Mind is one of the toughest to crack because they will take their time to consider all product attributes against their perceived ‘perfect’ choice. In the end, they will select the alternative that is closest to this ideal point, but if you fail to convince them they may opt to buy nothing at all.
“Don’t shy away from comparisons when speaking to this customer, but make sure you understand the ‘ideal’ they have in their mind. That’s the mental anchor they are comparing everything to. It could be features, price, imagined usage, or how it makes them feel. Whatever it is, that’s their point of comparison.
“Listen for their references and then use these to highlight similarities or product features. Expert recommendations are also likely to be particularly valued by this mindset,” says Kris.
#2 The Market Comparison Mind
This customer is well researched and open to exploring different brands and product options – balancing both performance and price. Their focus is on understanding the most important qualities of the product, and how this will impact the value and if this choice is the fairest in the market.
The Market Comparison Mind is loss averse. The best attributes of the product will only be enjoyed if purchased at the right price. They will either feel that they have gotten a very good deal, or that they have been ripped off – there is no middle ground!
“This customer has often been ‘trained’ by marketing to make comparisons on the readily quantifiable attributes like speed, capacity, and price, but is that what they need? Instead, focus on clarifying their needs and you might find there are features they have overlooked, or that it’s what you as a brand does differently, such as end-to-end service, that matters,” says Kris.
#3 The Local Comparison Mind
Some purchases are simply made in the moment. In this instance the customer’s goal is to make the best choice in terms of what is immediately available to them.
These ‘spur of the moment’ or ‘hot state’ purchases are usually tempered by the desire to avoid extremes. For example, in a basic, better, best scenario, most consumers will choose the middle option to avoid overpaying for a product they don’t know enough about, or the risk of buying a cheap or inferior item that may not last.
“What’s key for this customer is that sense of choice, but make sure you help the customer by providing the right selection to choose from – not too many to be overwhelming, and you may want to throw in some wild cards to make sure they are considering all options.
“Also, consider supporting side by side comparison, which enables parallel processing in the mind and is easier for comparing differences than processing things serially one by one,” says Kris.
#4 The Image Mind
For some buyers, perception is everything.
Instead of looking for performance features or even price, this customer’s buying history is a who’s who gallery of reputable names. This somewhat subjective thinking uses brands to take the pressure off decision making – finding confidence in their perceived sense safety, quality, or any number of other attributes.
“Don’t get caught up in discussing features with this customer. Ask them about the brands they know and like and get to know what they value about them. Use this as the basis of your conversation to help open their mind to considering a new or unknown brand.” says Kris.
Arm your customer service team with the skills and tools to identify and connect with your customers, quickly
Do your sales or customer service teams know how to tell one customer mindset from another? Have you shared audience profiles with them?
IMPACT’s Customer Mindset Workshops will introduce your customer service team to essential behavioural science insights and explore the techniques needed to predict customer behaviours to make every interaction more valuable.
To learn more, contact Nicole Webb at: firstname.lastname@example.org