12 Customer Behavior Models: How They Impact Your Business
A customer behavior model reveals the external and intrinsic factors influencing buying decisions.
By understanding how your target audience thinks, you can create products, experiences, and marketing materials that resonate with them.
This article covers 12 of the most common customer behavior models and how to maximize them for better product management.
TL;DR
- Consumer behavior examines how people and organizations make buying decisions.
- Traditional consumer behavior models include:
- Contemporary consumer behavior models include:
- Engel-Kollat-Blackwell Model.
- Black Box or Stimulus Response Model.
- Hawkins-Stern Impulse Buying Model.
- Howard-Sheth Model.
- Engel-Blackwell-Miniard Model.
- Webster and Wind Model.
- Nicosia Model.
- BJ Fogg Model.
- Businesses use consumer behavior models for customer segmentation, marketing personalization, and predictive customer analytics.
- Customer behavior models also help them improve user experience and boost customer retention.
- Userpilot can help you track user activity in real time, generating data that power a comprehensive customer behavior model. Book a demo now to see how.
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What Is Consumer Behavior?
Consumer behavior examines how people and organizations make buying decisions. It considers how social, psychological, and personal factors influence the purchase of goods and services.
Insights into consumer behavior allow marketers to craft the right messages and target potential customers through the most effective channels.
What Is a Consumer Behavior Model?
A consumer behavior model is a simplified framework that explains why and how people make purchasing decisions.
Customer behavior models eliminate guesswork and help you understand what customers want, the steps they’ll take through your conversion funnel, and what factors will make them buy from you.
The benefits of models are enormous. To mention a few, understanding and analyzing customer behavior helps you:
- Conduct better consumer research.
- Prioritize product development.
- Create targeted marketing strategies.
- Improve customer experience and increase retention.
Key Types of Customer Behavior Models
There are several types of behavior models, each offering a unique perspective on how consumers make decisions. These models are divided into two main groups:
Traditional customer behavior models
- Learning Model: Focuses on how consumers learn and make choices based on their experiences.
- Economic Model: Emphasizes the role of pricing models and consumer income in rational buying decisions.
- Psychoanalytical Model: Based on Freudian concepts, this model examines unconscious motivations and desires underlying consumer behavior.
- Sociological Model: Highlights the influence of social groups, culture, and social class on how consumers behave.
Contemporary customer behavior models
- Engel-Kollat-Blackwell (EKB) Model: Outlines customer decision-making stages, including need recognition, information search, evaluation, purchase, and post-purchase behavior.
- Black Box Model: Views consumer responses to external variables (marketing, environment) as primary, with the internal decision process considered a “black box.”
- Hawkins-Stern Model: Focuses on impulsive purchases, suggesting that visual cues and sudden urges can trigger unplanned buying.
- Howard-Sheth Model: Emphasizes rational decision-making, outlining how consumer inputs lead to constructs (like attitude and intention) and, ultimately, purchase outcomes.
- Engel-Blackwell-Miniard (EBM) Model: An evolved version of the EKB model that elaborates on the decision-making process across different journey stages, from need recognition to outcomes.
- Webster and Wind Model: Stresses the importance of organizational buying behavior, looking at how companies make purchase decisions in a B2B context.
- Nicosia Model: Maps the relationship between a company and its potential consumers, focusing on how advertising messages influence consumer attitudes and decisions.
Traditional Customer Behavior Models
Traditional models initially grew out of economic theories focused on rational decision-making.
Early economists sought to understand how consumers make choices to maximize utility and satisfaction based on factors like price, income, and necessity.
Over time, psychologists and sociologists also added their contributions.
Let’s discuss the traditional theories for consumer behavior modeling in detail:
1. Learning Model
The Learning Model of consumer behavior is based on the principle that consumer choices are influenced by primal needs (food, clothes, shelter) and learned information.
Customers begin by satisfying most basic survival needs and only move upwards after each level of need is met. Abraham Maslow’s hierarchy holds true here:
Does it apply to your business?
This consumer behavior model applies to businesses with products catering to both basic and learned needs. A good example is department stores that sell groceries and “less basic” items like toys and scincare.
Can SaaS companies maximize it? Absolutely.
Users visit your product daily to fulfill various needs. Regularly track customer data through feedback surveys and in-app analytics to ensure your tool is solving core user needs.
2. Economic Model
The core assumption of this model is that consumers are rational actors seeking to maximize their satisfaction within their budget constraints.
Price plays a crucial role in consumer decisions. Consumers will generally choose the product or service that provides the most perceived value at the least cost.
Does it apply to your business?
The economic model of consumer behavior is more readily applicable in markets characterized by products with minimal differentiation, where companies often compete primarily on price.
Examples include supermarkets, gas stations, budget airlines, and so on.
3. Psychoanalytical Model
This model disagrees with the economic model.
It interprets consumer choices as being driven by subconscious motives and desires, often shaped by emotions and deep-seated psychological needs.
Does it apply to your business?
This model is ideal for selling luxury products or experiences.
However, not everyone sells luxury or experiences. What if you’re in a sector like B2B SaaS that often involves structured decision-making with multiple stakeholders?
To address unconscious needs, create detailed buyer personas incorporating psychographics like motivations, fears, and desired outcomes. This will help you tailor messaging and elevate the customer’s perceived value.
Additionally, once users sign up, focus on rapid onboarding so they quickly experience your tool’s value and reach their ‘Aha!’ moment.
4. Sociological Model
The Sociological Model of consumer behavior examines how consumers are influenced by the norms, values, and behaviors of the groups to which they belong.
These groups can include families, friends, colleagues, and social classes. For instance, customer reviews on social media and sites like G2 play a major role in driving SaaS buying decisions.
Does it apply to your business?
The sociological model is relevant to almost all businesses, as even seemingly individual purchases are affected by social factors.
Contemporary Customer Behavior Models
Contemporary customer behavior models emerged as a response to the limitations of traditional models, which often assumed that consumers were primarily rational decision-makers.
As you’ll see shortly, contemporary theories for customer behavior modeling recognize that emotions, social influences, and unconscious motivations play significant roles in purchasing behavior.
5. Engel-Kollat-Blackwell (EKB) Model
The EKB Model is a widely recognized marketing framework that outlines the stages a consumer goes through before making the final purchase decision.
It essentially depicts consumer behavior as a problem-solving process.
Understanding and addressing customer motivation at each stage can significantly improve conversion.
Stages of the EKB model:
- Need recognition.
- Information search.
- Evaluation of alternatives.
- Purchase decision.
- Outcome analysis.
Does it apply to your business?
This model applies to you if you’re selling a digital product (or your potential customers congregate online).
Potential customers will check reviews and make extensive comparisons before purchasing, so try to provide the right content at each decision stage.
6. Black Box Model
Unlike the EKB model, which details the internal decision-making process, this customer behavior model takes a more external perspective.
The Black Box Model focuses on the observable relationship between external stimuli and the resulting consumer behavior. It essentially treats the customer’s internal decision-making processes as a “black box” that cannot be directly observed.
Here’s a breakdown of the mechanism:
- Environment: These are the external factors that influence customers, such as advertising campaigns, product packaging, pricing strategies, and word-of-mouth recommendations.
- Black box: This represents the customer’s internal world where all the complex psychological, social, and cultural factors interact to influence their decision-making.
- Buyer response: These are the observable consumer behaviors, including purchases, brand choices, time spent browsing products, and responses to marketing campaigns.
Does it apply to your business?
This model is suited for low-involvement products (e.g., simple, low-priced productivity apps) where purchases may be more impulsive and less deliberative.
7. Hawkins-Stern Model
The Hawkins-Stern Model focuses specifically on impulse purchases, which result from exposure to a stimulus.
This model categorizes impulse buying into four types based on different consumer reactions to stimuli:
- Pure impulse: Occurs when a consumer experiences a truly spontaneous urge to buy something unexpectedly.
- Reminder impulse: Happens when a consumer sees an item and remembers a need for it.
- Suggestion impulse: Occurs when a customer experiences a sudden urge to buy a product after someone (in person or online) suggests it.
- Planned impulse: Involves a general intention to buy a type of product but making a specific decision only upon getting a reminder or chancing on a product marketing campaign from a brand in that niche.
Does it apply to your business?
The Hawkins Stern Model is particularly relevant to retailers because they can easily design product displays to appeal to the variety-seeking buying behavior of visitors.
However, software businesses can also take advantage of it through personalized in-app customer marketing.
8. Howard Sheth Model
The Howard-Sheth Model aims to explain the rational decision-making process buyers undergo when making purchasing choices.
The model structures the consumer’s complex buying behavior into three major components:
- Extensive problem-solving: Customers begin the buying process by researching the available solutions to meet their needs.
- Limited problem-solving: This second stage involves filtering their options and selecting the best brand for them based on economic, psychological, and social factors.
- Habitual response behavior: After getting a suitable solution, customers now know where to turn to whenever they need the product or service. This habitual buying behavior continues until their needs change, or they find a better brand.
Does it apply to your business?
The Howard Sheth Model is a versatile framework for understanding consumer behavior, so it applies to a wide range of businesses.
Examples include businesses offering consumer goods, services, and software products.
9. Engel-Blackwell-Miniard Model
The Engel-Blackwell-Miniard (EBM) Model is a refinement of the earlier Engel-Kollat-Blackwell Model. It provides a more nuanced and detailed breakdown of the consumer buying process and post-purchase evaluation.
The EBM Model expands on the initial five stages in the earlier model by including:
- Information input: external and internal stimuli.
- Information processing: how consumers analyze information.
- Decision process variables: factors like brand loyalty and perceived risk.
Unlike the EKB model’s more linear progression, the EBM model acknowledges that consumers might not always follow a strict order in their decision-making.
They might revisit earlier stages or move back and forth as they gather information and refine their choices.
Does it apply to your business?
The EBM Model is particularly useful for businesses selling products or services that involve complex decision-making processes.
10. Webster and Wind Model
Unlike models focused on individual consumers, the Webster and Wind Model recognizes the complexities of organizational buying decisions involving multiple stakeholders within a company.
According to this customer behavior model, organizational buying decisions are influenced by environmental, organizational, interpersonal, and individual factors.
Understanding how these factors affect your target audience helps you refine your marketing and customer experience strategies.
Does it apply to your business?
The Webster and Wind Model applies to you if you own a B2B product or service.
11. Nicosia Model
The Nicosia Model focuses on the relationship between a company and its consumers. It posits that businesses can influence consumer attitudes and behaviors through advertising.
The model maps the consumer decision-making process in four major stages:
- Field of consumer experience.
- Search and evaluation.
- Purchase decision.
- Feedback.
Does it apply to your business?
The Nicosia Model is particularly relevant to businesses that rely heavily on advertising and direct consumer engagement, such as consumer packaged goods, electronics, and fashion industries.
12. BJ Fogg Model
The Fogg Behavior Model proposes that three elements must converge at the same moment for a behavior to occur: Motivation, Ability, and Prompt.
In other words, for a purchase to happen, customers must have sufficient motivation, the ability and willingness to pay, and a trigger from you (ads, account upgrade prompts, etc).
Does it apply to your business?
This model can apply to any business. For example, if you offer a subscription service, you would want to do the following to convert trial users:
- Ensure your trial onboarding demonstrates how your tool solves customer pain points (motivation).
- Occasionally remind trial users to upgrade (prompt).
- Make it super easy and convenient to upgrade their accounts (ability).
How Businesses Use Customer Behavior Models to Improve Marketing Strategies
By analyzing patterns and trends in customer interactions, you can better understand your target audience, personalize marketing efforts, and predict future behavior.
This section shows you practical ways to utilize consumer behavior models in marketing and product management.
Customer Segmentation
Customer behavior models are a game-changer when it comes to customer segmentation.
By analyzing past purchases, browsing habits, and demographic information, these models can reveal distinct groups within a target audience.
This allows you to take a more granular look at your customers and understand their behavior patterns.
Marketing Personalization
Consumer behavior models also help pinpoint the most effective content for each customer segment using the data insights you’ve gathered.
For example, you can use models like the EBM to understand where a customer is in the decision-making process (e.g., information search vs. evaluation).
Then, deliver personalized messages that provide the information or incentives they need to progress to the next customer journey stage.
Predictive Customer Analytics
Predictive analytics uses historical consumer behavior data to identify the likelihood of future outcomes.
Consumer behavior models enhance these predictions by providing a framework for forecasting customer reactions based on identified behavioral patterns.
For instance, understanding how price changes influence customer purchasing decisions (Howard Sheth Model) can help you set the optimal pricing strategies.
Improving Customer Experience
Use the customer data to create engaging experiences that keep users returning to your product.
First, identify the Jobs to Be Done (JTBD) for each user segment. Then, ensure your users engage with your product’s features needed to meet these goals.
Doing this will improve customer satisfaction and encourage users to stick with you.
Customer Journey Mapping
Customer journey mapping visually depicts a customer’s experience with your brand, from initial awareness to post-purchase interactions.
Consumer models like the Engel-Blackwell-Miniard (EBM) Model, which details each phase of the decision-making process, are ideal for this purpose. Here’s what you should focus on:
- Clearly map out each phase in the customer journey and implement behavior analytics to see how users progress from one stage to the next.
- Aim to identify friction points and create solutions to improve customer experience at every touchpoint.
Improving Customer Lifetime Value (LTV)
Customer lifetime value (LTV) estimates the total revenue a business can expect from a single customer throughout their entire relationship.
Customer behavior analysis helps you identify actions that strongly correlate with high customer lifetime value (CLV). Then, you can develop proactive strategies to encourage those behaviors.
For instance, study your loyal customers to pinpoint the features they use most frequently.
Then, prioritize these features in your onboarding process to ensure new users adopt them quickly and experience the full value of your tool.
Customer Retention
Behavioral analytics help identify patterns indicative of potential churn.
Common warning signs include reduced core feature usage, decreased logins, or negative sentiment in support interactions.
You can spot these signs using retention cohort analysis (example below). Once you notice potential churn, reach out to users to discuss their issues and offer solutions.
Conclusion
Consumer behavior models decode the “why” behind customer buying behavior. They help you understand the interplay of emotions, social influences, and economic factors.
Leverage these models to segment your audience, personalize product experiences, and improve the customer journey. This data-driven approach lets you attract and retain high-value users and grow your bottom line.
Userpilot can help you track how customers interact with your product and optimize your strategies accordingly. Book a demo now to see how!
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