Everything You Need To Know About Customer Behavior Model
To begin, let’s go over customer behavior. It refers to how people make decisions about how and when they buy and use products or services. By looking at the factors that influence these choices, like emotions, social influences, and personal preferences we are able to better understand how customers behave. Understanding customer behavior is important because it helps businesses predict how people will react to new products, services, or marketing campaigns before they are released. A customer behavior model is a tool that businesses use to study these actions. It shows how customers decide what to buy, what influences their decisions and how they interact with brands.
By understanding these patterns, businesses can improve their products, target marketing more effectively, and boost sales as a result. This knowledge helps companies build better customer relationships and increase profits over time by predicting which products your customers will enjoy.
Why Customer Behavior Models Matter
Customer behavior models are a critical tool to implement into your business because they help you understand how their customers think and act. By studying these models, companies can make better decisions that improve their products, marketing, and sales efforts.
- Better Product Development
When businesses know what customers want, they can deliver products that match their needs. This helps improve existing products and even design new ones that you know your customers will enjoy. - More Effective Marketing
Customer behavior models allow businesses to send the right message to the right people. With this knowledge, marketing efforts can be more focused and relevant to the audience rather than broader campaigns. - Keeping Customers Happy
Understanding customer behavior helps companies predict what customers need before they even ask for it. This keeps customers coming back and reduces the chances of losing them by allowing you to act proactively. - Predicting the Future
Behavior models also help businesses predict what customers might want next. This lets companies stay ahead of the curve and prepare for future changes in the market.
Example:
A well-known clothing retailer used customer behavior models to understand buying patterns. By using these insights, they improved their online store layout, introduced personalized product recommendations, and launched targeted email campaigns. This led to increased sales and higher customer satisfaction due to the tool
Types of Customer Behavior Model
There is a variety of different customer behavior models, keep reading to learn about 10 different explanations to why customers act the way they do
Psychoanalytic Theory
The Psychoanalytic Theory of consumer behavior is based on Sigmund Freud’s theory that human decisions are driven by unconscious motivations. This theory suggests that people don’t always make logical choices when buying products but instead let emotions, deep-seated desires, and psychological needs influence their decisions. According to Freud, human behavior is shaped by three elements: the id (instincts and desires), the ego (rational thought), and the superego (morality and social expectations). When consumers make purchases, they are often influenced by these hidden psychological forces rather than just what they actually need.
- Id – Represents deep desires like pleasure, status, and comfort.
- Ego – Balances reality with desires, helping people make rational choices.
- Superego – Guides decisions based on morals, values, and social expectations.
When consumers make purchases, they may believe they are acting logically. However, their choices are often influenced by subconscious emotions.
Example of Application
Many brands use this theory to create emotional connections with customers rather than just promoting product features.
- Luxury brands – Ads focus on exclusivity, power, and social status.
- Perfume commercials – Use romance and seduction to trigger deep emotions.
- Car advertisements – Highlight freedom, success, and prestige rather than just technical details.
Business Implications
Companies can use emotional marketing to attract and retain customers.
- Tell a story – Create ads that evoke feelings like nostalgia, excitement, or security.
- Trigger emotions – Show how a product makes people feel, not just what it does.
- Build brand loyalty – Emotional connections lead to repeat customers.
By understanding unconscious motivations, businesses can alter their buying behavior and strengthen customer relationships.
2. Veblenian Social-Psychological Model
This model explains why people buy expensive products to show status rather than just for their function. Economist Thorstein Veblen introduced the idea of conspicuous consumption, which means that customers are buying things to impress others. Many consumers prefer luxury brands because they make them feel successful and important rather than for the value of the product. In many cases where a cheaper option works just as well, people often choose the high-end version in order to show off for social reasons.
Practical Example/Real-world Application
Luxury brands use this model to influence shoppers.
- Fashion brands like Gucci and Louis Vuitton attract buyers who want to stand out.
- Luxury cars like Ferrari and Rolls-Royce are not just for driving. They also show wealth and success.
- VIP memberships for airlines, hotels, and clubs give people an exclusive experience that others can’t have.
Implication for Businesses
Companies can use this model to create demand and build a strong brand.
- Set premium prices to make products feel more valuable.
- Use celebrities to make the brand seem more exclusive.
- Limit supply by releasing special editions.
- Focus marketing on status rather than just product features.
By making a product feel rare and desirable, businesses can attract customers who want to stand out from the rest.
3. Reasoned Action Theory
The reasoned action theory explains that people often make decisions based on their intentions. It suggests that before taking action, individuals weigh the pros and cons, consider social influences, and think about the expected outcome before they make a purchase. This model was developed by Martin Fishbein and Icek Ajzen and states that a person’s behavior is shaped by their attitudes and what they believe others expect from them. If someone thinks an action will have a good result and that others will approve, they are more likely to make a purchase.
Practical Example/Real-world Application
This model is widely used in marketing, especially in areas where social approval and perceived benefits influence choices of potential customers.
- Fitness apps. People are more likely to join a gym or use a workout app if they believe it will improve their health and if their friends or family support the decision.
- Sustainable products. Many consumers choose eco-friendly products because they believe it’s good for the planet and they want to be seen as responsible.
- Online reviews. A shopper is more likely to buy a product with high ratings because they trust the opinions of other buyers.
Implication for Businesses
Companies can use this model to influence consumer behavior and increase sales.
- Highlight positive outcomes. Show how a product improves life or solves a problem.
- Leverage social proof. Use customer reviews, testimonials, or influencer endorsements.
- Encourage word-of-mouth marketing. People trust recommendations from friends and family.
- Make products socially desirable. Position them as the right choice that others will approve of.
By shaping customer attitudes and social influence, businesses can guide consumers toward making a purchase.
4. Maslow’s Hierarchy of Needs
Maslow’s hierarchy of needs is a psychological model that explains human motivation. Developed by Abraham Maslow, it suggests that people have different levels of needs, and they must fulfill lower-level needs before focusing on higher ones. The model is shaped like a pyramid with five levels:
- Physiological needs – Basic survival needs like food, water, air, and shelter.
- Safety needs – The need for security, stability, health, and financial safety.
- Social needs – The desire for relationships, friendships, love, and belonging.
- Esteem needs – The need for recognition, self-respect, and personal achievement.
- Self-actualization – The pursuit of personal growth, creativity, and reaching one’s full potential.
Maslow believed that people start by satisfying basic needs like food and shelter. Once those are met, they focus on safety, relationships, self-worth, and finally, personal growth. Businesses can use this model to understand what drives their customers and create products that meet these needs. Depending on your product, this will help you understand what needs to target as well.
Practical Example/Real-world Application
Different businesses cater to different levels of Maslow’s hierarchy.
- Physiological needs – Food and beverage companies, bottled water brands, and housing services provide essential products for survival.
- Safety needs – Home security companies, health insurance providers, and financial planning services help customers feel secure.
- Social needs – Social media platforms, dating apps, and group-based activities help people connect with others.
- Esteem needs – Luxury brands, career development programs, and personal coaching services make customers feel valued and successful.
- Self-actualization – Educational institutions, self-improvement apps, and travel experiences help individuals grow and achieve their potential.
Implication for Businesses
Understanding Maslow’s hierarchy helps businesses design better marketing and product strategies.
- Identify where customers are in the hierarchy and target their specific needs.
- Create ads and messages that highlight how a product fulfills those needs.
- Develop services that help customers move up in the hierarchy.
- Offer experiences that improve well-being, success, and personal growth.
By aligning marketing and product development with human motivation, businesses can create strong emotional connections with their customers and improve brand loyalty.
5. Hawkins Stern Impulse Buying Theory
The Hawkins Stern impulse buying theory explains why people make unplanned purchases. It suggests that impulse buying is influenced by different factors like store layouts, product placement, promotions, and emotional triggers. Unlike planned purchases, impulse buys happen suddenly, often due to curiosity, excitement, or urgency and usually can’t be planned. People may not intend to buy something, but when they see it at the right moment, they feel the urge to purchase. Hawkins Stern categorized impulse buying into four types.
- Pure impulse. A completely unplanned purchase, like grabbing a chocolate bar at checkout.
- Reminder impulse. Seeing a product and remembering a need, such as buying toothpaste after spotting it on a store shelf.
- Suggestion impulse. Buying something after seeing an ad, sample, or recommendation, like trying a new energy drink after a free tasting.
- Planned impulse. Having a general intent to buy but deciding on the exact product in-store, such as choosing a handbag after spotting a discount.
Practical Example/Real-world Application
Many businesses use this theory to increase sales by triggering impulse purchases.
- Supermarkets place snacks, drinks, and small items near checkout to encourage last-minute purchases.
- E-commerce websites use flash sales, limited-time offers, and “customers also bought” sections to prompt quick buying decisions.
- Clothing stores display accessories near the fitting room to encourage customers to add extra items to their purchase.
- Fast-food chains upsell items, such as asking customers if they want to add fries or a drink to their order.
Implication for Businesses
Businesses can increase revenue by designing their stores, websites, and promotions to encourage impulse buying.
- Arrange small, eye-catching products near checkout counters.
- Use discounts, pop-ups, and notifications to create urgency.
- Offer free samples or demonstrations to attract customers.
- Use personalized recommendations to suggest extra purchases.
By creating the right shopping environment, businesses can encourage impulse buying and boost sales.
6. Marshallian Economic Model
The Marshallian economic model explains how consumers make rational choices based on price, income, and product value. Developed by economist Alfred Marshall, it suggests that buyers seek to maximize satisfaction while staying within their budget. People compare products based on cost, necessity, and perceived value before making a decision whether or not to purchase.
This model follows basic economic principles.
- If the price of a product decreases, demand increases.
- If a person’s income rises, they tend to buy higher-quality goods.
- If there are many substitutes for a product, consumers will choose the best option at the lowest price.
It assumes that people are logical when making purchases, focusing on affordability and value.
Practical Example/Real-world Application
Many industries rely on this model to attract customers.
- Grocery stores lower prices on basic goods like rice or bread to increase sales.
- Airlines adjust ticket prices based on demand, charging more during holidays and less during off-peak seasons.
- Tech companies offer budget, mid-range, and premium versions of the same product to cater to different income levels.
- Streaming services provide multiple subscription plans so customers can choose the most affordable option.
Implication for Businesses
Companies can use this model to set prices and position their products effectively.
- Offer discounts or deals when demand is low to attract more buyers.
- Provide different pricing tiers to appeal to various income groups.
- Focus on product quality and benefits to justify higher prices.
- Use psychological pricing, such as setting a product at $9.99 instead of $10, to make it feel more affordable.
By understanding how consumers evaluate price and value, businesses can develop pricing strategies that attract rational buyers and maximize profits.
7. Pavlovian Learning Model
The Pavlovian learning model explains how consumer behavior is shaped through repeated experiences and associations. It is based on the work of Ivan Pavlov, who demonstrated that people and animals can develop conditioned responses to external stimuli. In marketing, this means that consumers can be trained to associate a brand or product with certain emotions, experiences, or rewards. When exposed to the same trigger repeatedly, customers begin to develop habits and automatic responses toward a brand.
This model relies on three key elements:
- Stimulus – An external factor that triggers a response, such as a jingle, logo, or advertisement.
- Response – The consumer’s reaction, such as feeling excited or craving a product.
- Reinforcement – A reward or repeated exposure that strengthens the association over time.
Practical Example/Real-world Application
Many brands use this model to create strong emotional connections with consumers.
- Fast-food chains use catchy jingles, like McDonald’s “I’m Lovin’ It,” to trigger positive feelings and cravings.
- Perfume brands use celebrity endorsements to associate their scents with luxury and desirability.
- Supermarkets offer loyalty programs where repeat purchases are rewarded, reinforcing buying habits.
- Soft drink companies link their products to happiness and celebrations through emotional advertisements.
Implication for Businesses
Companies can use the Pavlovian learning model to influence consumer habits and create long-term brand loyalty.
- Use consistent branding, such as logos, colors, and slogans, to create instant recognition.
- Reinforce positive emotions through advertising and customer experiences.
- Offer rewards and discounts to encourage repeat purchases.
- Use sensory marketing, such as music, scents, or packaging, to strengthen brand associations.
By conditioning customers to associate a brand with positive experiences, businesses can influence buying behavior and encourage brand loyalty.
8. Howard-Sheth Model
The Howard-Sheth model explains how consumers make complex purchasing decisions based on multiple influences. It focuses on information processing and how buyers filter, evaluate, and choose products. Unlike models that assume consumers always make rational choices, this model recognizes that buying decisions are shaped by personal experience, social factors, and external influences that may not seem reasonable.
The model divides consumer decision-making into three stages:
Extensive problem-solving – The consumer gathers information, compares options, and evaluates brands.
Limited problem-solving – The buyer narrows down choices and considers past experiences and preferences.
Habitual response behavior – The customer repeatedly buys a preferred brand without much thought.
Practical Example/Real-world Application
This model applies to industries where buyers go through a decision-making process before purchasing.
- A person buying a car will research different models, compare prices, and read reviews (extensive problem-solving).
- When upgrading a smartphone, a buyer considers past experiences with a brand and checks new features (limited problem-solving).
- A customer who always buys the same toothpaste brand does so out of habit (habitual response behavior).
Implication for Businesses
Businesses can use the Howard-Sheth model to improve their marketing and customer retention strategies.
- Provide clear, valuable information to help consumers during the research phase.
- Use testimonials and reviews to build trust and reduce hesitation.
- Offer personalized recommendations based on past purchases.
- Create strong branding and customer satisfaction to encourage habitual purchases.
By understanding how consumers process information and make decisions, businesses can tailor their marketing strategies to guide them through each stage of the buying journey.
9. Nicosia Model
The Nicosia model explains how businesses and consumers interact before a purchase happens. It focuses on how marketing messages shape consumer attitudes, leading to decision-making and brand loyalty. This model suggests that buying decisions are not instant but develop over time through a continuous learning process. A consumer’s exposure to advertisements, brand reputation, and customer experience all influence future behavior.
The model is divided into four key stages.
- Field of consumer experience. A company creates marketing messages to attract attention.
- Search and evaluation. The consumer processes the information, compares options, and develops an opinion.
- Purchase decision. The buyer makes a final choice based on their evaluation.
- Feedback loop. After using the product, their experience influences whether they will buy from the brand again.
Practical Example/Real-world Application
This model applies to industries where brand perception and reputation impact buying decisions.
- A car company runs an ad highlighting safety features and reliability.
- A potential buyer researches the brand, reads reviews, and compares models.
- After comparing, they choose a specific car and complete the purchase.
- If satisfied, they may recommend the brand to friends and return for future purchases.
Implication for Businesses
Companies can use this model to improve how they attract and retain customers.
- Create marketing campaigns that form strong first impressions.
- Provide clear and persuasive information to help consumers in the evaluation phase.
- Focus on customer service to ensure a positive post-purchase experience.
- Encourage word-of-mouth marketing by turning happy customers into loyal advocates.
By consistently improving customer communication, businesses can build stronger relationships and increase brand loyalty.
10. Engel-Kollat-Blackwell Model
The Engel-Kollat-Blackwell model describes how consumers make decisions before buying a product. It explains how different factors, such as personal needs, advertisements, and external influences, affect consumer choice to make a purchase. The model shows that buying decisions are not made instantly but follow a structured process.
The model consists of five key stages.
- Need recognition. The consumer realizes they need or want something.
- Information search. They research, compare options, and explore alternatives.
- Evaluation of alternatives. The buyer considers pros and cons before deciding.
- Purchase decision. They choose a product and complete the transaction.
- Post-purchase behavior. After using it, they reflect on whether it met expectations.
Practical Example/Real-world Application
This model applies to purchases that require research and evaluation.
- A person realizes they need a new laptop for work.
- They search online, read reviews, and compare different brands.
- After checking specifications, price, and features, they narrow down options.
- They make a final choice and purchase the laptop.
- After using it, they decide if they are satisfied and may leave a review.
Implication for Businesses
Companies can use this model to guide consumers through the buying process.
- Identify customer needs and create marketing that addresses their problems.
- Provide detailed product descriptions and comparisons to help decision-making.
- Use customer testimonials and expert reviews to build trust.
- Offer great customer support to ensure positive post-purchase experiences.
By understanding how customers move through each stage, businesses can create strategies that improve sales, increase satisfaction, and build long-term brand loyalty. Make sure to get started today in order to set your business up for long term success for years to come.
With customer behavior models you are able to predict buying decisions and improve marketing, sales, and customer experience within your business. By applying the right model, companies can attract, engage, and retain customers more effectively. Aligning products and strategies with consumer psychology leads to better conversions, stronger brand loyalty, and long-term business growth.