Customer Behavior On MLM/Network Marketing Products; An Extensive Investigation

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How does customer behaviour influence the purchase of MLM products?

Hey,

There are many factors you should know that determine customer behaviour. These factors include psychological, social, cultural, personal and economic factors.

This is almost similar in both traditional as well as Network Marketing businesses. While purchasing a product (whether MLM or traditional products), customers will consider all the factors.

A customer needs to satisfy his/her psychological, social, cultural, personal, and economic factors. A customer buys those products that will satisfy his needs.

In the changing environment, customer behaviour is unpredictable. Because they always look for additional features at a price level. Therefore, they are ready to purchase products if they get any benefits.

For example, in a competitive market, you have a product and have many other substitutes at the same rate. When you sell your products at a discount rate, a huge volume of customers will reach you to buy your products.

Also Read: 6 Points You Should Consider While Choosing MLM Products

Cool, isn’t it?

Customer behaviour is a super important factor you should know. Because it is the reason behind your business success.

Here, in this blog, you will get an idea about customer behaviour, how it affects MLM product purchase and importantly, you will cover a literature review.

Also Read: What is the Importance of Product Mix in Multi-level Marketing?

Customer Behaviour

Main Topics

a. What is the Behaviour of a Customer? 

b. Features of Consumer Buying Behaviour?

c. Why is Consumer Behaviour Important? 

d. Customer Behaviour Analysis; An Uttaranchal University Research

e. Types of Buyers

f. Types of Consumer/ Customer Behaviour

g. Factors Influencing Customer Behaviour

h. How Do You Shape Customer Behaviour for MLM success?

i. What are the Strategies to Improve Your Buying Behaviour?

Let’s break down the above topics,

What is the Behaviour of a Customer? 

According to Frederick Webster- “Consumer buying behaviour is all psychological, social and physical behaviour of potential customers as they become aware of, evaluate, purchase, consume and tell other people about products and services.”

Consumer buying behaviour indicates some activities of the customers before buying products or services. These activities may be online or offline.

In this digital world, these activities are broad. It includes searching on Google or similar search engines, engaging with posts on social media, asking for personal opinions, going to a store etc.

Also Read: Social Network Marketing; Forge Your MLM Strategy for 2021

I know, you are all doing the same. And I’m also no different. I always search on google, go through amazon or Flipkart sites and look for the offers and features. 

In a competitive market, we can sell a massive volume of products, if we put forward some offers and discounts.

Therefore, researching or investigating the behavioural pattern is a dire need in every business. Once you have completed the research, you will get a lot of interesting facts about customers.

Features

Before entering into a Multi-level Marketing business you need to examine the behaviour of a customer.

Right?

Promoting your products is useless when you have no idea about the interests or behaviour of a customer. 

How can you find the demographics and interests of the customers?

Simple!

You can find this information by conducting surveys, events etc. 

Let’s make it clear!

If people from the market search for products with certain features. However, they couldn’t find anything. 

What will you do?

Here I’m going to ask them about what type of product they require, their budget, what they expect from products etc. A form is more reliable to collect such data.

You need to specify whether the customer is happy with your products and any suggestions.

Now let’s look at another example,

It is such a simple way. Conduct an event or contest to promote your products, and collect the name, phone number and email of all the participants.

You will get data of the exact customer who has previous knowledge of your brand. By using this data, you can inform them when you are launching new products or any specific offers.

The main difference between these two examples is one is more effective to collect the existing customer’s attitude. 

On the other hand, the second way is effective when you begin your new business, launching new products or mobilizing to a new market or location. 

The following are the features of Consumer Behaviour.

i. Psychological Features

A customer will only buy a product only after considering his/her psychological factors. It includes emotion, how they think and the purpose of the use of a product.

ii. Influence of Market Environment

The market environment is also a powerful feature that influences customer behaviour. A consumer will avail a lot of other substitutes in a competitive market. However, if there is no other close substitute for your products, customers will buy your products.

iii. Personal and Organizations Behaviour Model

We can study customers’ attitudes in two terms; Personal or individual behaviour and group or organizational behaviour. You can discover the demographics, interests and behaviour of a group of people. 

Then among these groups, we can easily identify some common motivators such as people expecting low price products or luxury products.

iv. Value for Money 

In reality, customers are not just purchasing a product. They expect the value of money for the amount spent on a particular product. They are searching for a product that will satisfy their most all expectations in an optimized way.

v. Consumer Attitude Affects Society

Customer attitude is the main reason for the influence in society. Their buying behaviour affects society positively or negatively. 

For example, if the customers prefer healthy foods, society will automatically turn them into healthy ones. 

vi. Importance of Convenience

Because technology has made everything easier, consumers demand convenience. Whether customers are buying automobiles, booking vacations, or connecting with friends online, a company can benefit by tapping on their need for more efficiency.

Why is Consumer Behaviour important? 

Discovering customer behaviour is super important for a company (whether it is a traditional or MLM company) to find success to sell existing products as well as launching new products.

For a single product, different customers have different thoughts and attitudes. Most importantly, if a business organization fails to discover customer trends, the entire marketing campaign will flop. 

The following are some of the importance of behaviour of the customers. 

a. Customer Differentiation

In a market, there is a wide variety of products available to a customer. Which product will he choose?

He chooses a product that is popular to him, meets his desired expectation and is budget-friendly.

A customer will only differentiate, once your product meets these requirements of the customers.

b. The royalty of the Customers

Customer behaviour is an overriding factor not only to new products but also to the existing products. It is important to retain the customer who had already made a purchase. 

You should attract them by offering special offers to them. You need to return back your customers to make a purchase from you.

If you don’t pay any attention to your existing customer, you are probably going to lose massive sales. 

Because customer behaviour is not rigid. It is always changing. If you do not take the necessary steps, they will find another alternative product. 

Who will lose?

It is only yours.    

c. Planning for a New Marketing Campaign

Well-equipped research will help you to get the most accurate data about your customer behaviour.

By using this accurate data, we can build a new marketing campaign to catch the exact behaviour of a customer.

d. Predicting Market Trends

For a common person, these are only data. But for the marketers, it is like lifeblood. We can discover their name, gender, age, location, education, current position, interest, hobbies etc. while conducting a study on customer behaviour.

Thus we can easily trace out what are the current trends in the market and what they expect from us. By using this you can simply sell your products (especially MLM products)

e. Tapping the First Opportunity

By using the undiscoverable information you can structure new selling strategies to use with. You will get more benefits than others by tapping first opportunities.

f. Facing Competition

In this way, you can face competition with a well-structured plan.

If you are running a Multi-level Marketing company or a traditional business, studying customer behaviour is vital.

Customer Behaviour Analysis; An Uttaranchal University Research

Hello,

Now, you are going to study a literature review of the research made by Dr D.S Chaubey and V.K Tangari, Professors at Uttaranchal University.

They made a research on the topic of “A STUDY ON CONSUMER ATTITUDE TOWARDS THE PRODUCTS SOLD THROUGH NETWORK MARKETING” in 2018.

They had come across some important conclusions that most of the MLM associates are exploiting the relationships of the people. This was reported in several other studies made in the past. 

Furthermore, they rigidly state that the quality and services of the product of an MLM company are the most important factor for purchasing them.

Let’s find some highlighted areas that I found during this research. It will help you to understand how the customer buys your products. In other words, it will show you how they view your product.

In this way, you can follow some healthy tips that your competitors do not follow, to flourish your MLM sales.

As per their study, in India, 20% of the people are associated with Network Marketing through the pressure from friends or relatives.

Interestingly, 15.7% of people join Multi-level Marketing to enjoy the quality of products.

11.5% of the people associate with MLM because of the reason that they are inspired by the creativity and freshness of the method.

12.3% of people purchase the products because of their competitive price. 11.7% of the respondents are looking at it as a way to enjoy the style, fashion and innovation of the products.

Additionally, we can see some thrilling facts about the types of products. As per their study, most of the respondents demanded Nutritious products. It was 17.4%. 

Likewise, they preferred products such as lifestyle products, health care products, consumable products etc. on the percentage of 16.3%, 13.7% and 10.8% respectively.

Hey, 

Are you a business person dealing with these goods? 

Then don’t waste your time. Enter into Network Marketing by automating your operations using MLM software in order to earn more profits. 

Remember that you should not pressure someone to buy your product. It is not an ethical way. Instead, we can create needs for the customers. Eventually, they will demand your products more and you can double your supply.

You can concentrate on other reasons to create more sales. Instead of pressuring the people, you can design more quality or innovative products. Another method is to provide Network Marketing products at competitive prices.

People will like your products when you offer after-sale services. Another reason for buying your products is your brand name. The popularity of your brand name can bring you more sales.

However, you cannot brand your company within a single day. It will take time.

They concluded that Direct Selling was an emerging mode of sales. And it was growing day by day. The states that Network Marketing or MLM offers everyone a chance to become self-employed.

As per their findings, the growth rate of the MLM industry was slower. Moreover,  it has the potential to grow based on the customer’s expectations and expand the market. 

So, what do you think now, pressuring people to buy products which will adversely affect your brand or all other healthy methods?

The choice is yours!

Types of Consumer Behaviour

Based on the behavioural pattern, buyers are mainly 4 types;

Types of Consumer Behaviour
  • Extended Decision Making
  • Limited Decision Making
  • Habitual Buying Behaviour
  • Variety Seeking Buying Behaviour

i. Extended Decision Making

Considering that you are going to purchase a costly product, what will you do? Even if it is an inexpensive product, definitely you are not going to get reasonable attention.

But,  purchasing costly products is a little bit tough and confusing for a customer. He will search for the products on different sites, similar products available in the market and ask close relatives or friends.

They search all possible ways before buying some products. Thus extended decision making plays a brilliant part in purchasing the products.

ii. Limited Decision Making

Here, customers are limited to making decisions to purchase a product. Because they have a few alternative products to buy.

For example, imagine that you are going to purchase a product in a market. It’s important to remember that the product has only one competitor or alternative.

The product X costs $30 and Y costs $28. You need to pay at least 28 dollars to buy that product. There is no other option to minimize your cost.

This situation is Limited Decision Making.

iii. Habitual Buying Behaviour

It brings an immense result in your daily life. Typically, we don’t take much care about purchasing a product that is cheaper and always available in the market.

In the case of daily use products such as soaks, if it is notched you need to buy a new one. 

But will you spend higher costs each time you purchase it?

No, isn’t it?

I know, because I do not wish to spend more money to buy soaks. We always spend only a spoonful amount.

So this is habitual buying behaviour.

iv. Variety Seeking Buying Behaviour

When there are clear distinctions between products inside established brands, you will exhibit this type of purchasing behaviour. You, as a consumer, may be tempted to try a similar product from a different brand out of curiosity.

To give you an example, you may feel compelled to purchase a plain, white t-shirt with slightly varied graphics from numerous stores. 

Just because you don’t want to wear the same white t-shirt every day doesn’t mean you can’t mix it up every now and then. The t-shirt is very affordable everywhere, so purchasing three or five of them should not be a problem.

Types of Buyers

Getting more interest?

Now let’s look at types of buyers. We already discussed different types of customer behaviour. There are mainly 4 types of buyers.

  • Amiable Buyer
  • Driver Buyer
  • Analytical Buyer
  • Expressive Buyer

Let’s look at it in detail,

a. Amiable Buyer

Amiable buyers are those buyers who are highly responsive but not assertive in nature. They are very friendly, expecting friendly relationships rather than conflict. They are nice, however, find it difficult to say no to negotiations.

So, 

If you are a marketer you need to be their friend. You can use personal assurance, guarantees and avoid options and probabilities.

b. Expressive Buyers

These buyers are highly responsive in nature and assertive. They usually purchase products within a shorter span of time. Expressive buyers are eager to buy products quickly, without adequate good decisions.

c. Driver Buyer

The driver buyer is highly assertive in nature. However, they aren’t very responsive. These types of buyers are the real negotiators. 

You should take reasonable care while you are dealing with the drivers. Because they are very aggressive in nature. They have the intention to purchase the products at a lower price.

They are not friendly in nature and begin to bargain very hard to win a product.

d. Analytical Buyer

Analytical buyers are neither assertive nor responsive. They try to compare goods. They take their time and are hesitant to make snap conclusions.

So, you should wait for a couple of more periods to purchase your products than the other buyers.

By reaching this session to you, I need to say that you need to find what types of customers you have or you are going to deal with. 

Study the types of customers and take remedial measures to boost your product sales.

Factors Influencing Customer Behaviour

Consumer behaviour fluctuates because of some factors.

Excited to know?

Then let’s take a look at the topic factors that influence customer behaviour. It is mainly 5 types;

i. Psychological Factors

Psychological factors are the major denominator to assess the influence of MLM products. They are motivation, perception, learning and beliefs.

Motivation: When a person is sufficiently driven, it affects the person’s purchasing behaviour. A person has various needs, including social, fundamental, and security requirements, as well as esteem and self-actualization, wants. 

Among all of these demands, basic necessities and security needs take precedence over all others. As a result, basic necessities and security needs have the ability to inspire a consumer to purchase goods and services.

Perception: Consumer perception is a major influencer of consumer behaviour. Consumer perception is the process through which a customer gathers information about a product and interprets that information to construct a meaningful image of that thing.

Learning: When a person purchases a product, he or she gains knowledge about the product. Learning occurs over time as a result of experience. The learning of a consumer is dependent on his or her abilities and expertise. 

While skill can be developed via practice, knowledge can only be obtained through experience.

Believes: Consumers have specific attitudes and ideas that influence their purchasing decisions. The consumer acts in a particular way toward a product based on this attitude. 

This mindset is very important in defining a product’s brand image. As a result, marketers work hard to understand consumer attitudes in order to build marketing initiatives.

ii. Social Factors

Humans are social beings and he/she loves to involve in social groups. Because of the nature of humans, they always imitate others.

For example in the clothing industry, if a specific style of cloth goes viral, the customers will prefer that product more than others.

Thus we can say that people around us can influence the customer’s buying behaviour. There are mainly 3 types of social factors. They are;

Family: Family influences the behaviour of a customer. A person’s preferences are formed as a child by witnessing his family buy things, and they continue to buy the same products as they grow older.

Reference Group: In general, all of the members in the reference group share similar purchasing habits and affect one another.

Roles & Status: The role that a person plays in society has an impact on him. If a person is in a high position, his purchasing habits will be heavily influenced by his position. 

A Director of a company will buy based on his standing, However, a salesman in the same company will have a distinct buying pattern.

iii. Cultural Factors

Think that someone comes to your country from abroad. Both of you have unique cultures and practices. Right? We can say that different cultures that a person follows will influence the buying pattern of a person.

This factor includes culture, subculture, and social class.

iv. Personal Factors

Personal factor is another important factor that determines the behaviour of a customer. These personal variables vary from person to person, resulting in varying views and consumer behaviour.

Age, income, occupation and lifestyle are the different types of personal factors.

v. Economical Factors 

Even income can dominate the attitude of the customers. Factors such as personal income, family income, consumer credit, liquid assets and savings are some of the economical factors.

Factors Influencing Customer Behaviour

How do you Shape Customer Behaviour for MLM Success?

Hey,

How do you influence the behaviour of the customer in order to achieve a tremendous MLM victory?

It is the right time to think about this. From all the above topics, we can reach some general ideas to succeed your MLM company. 

If you are a marketer or a business person check out the following points.

a. Emotional Response of Audience

The success of every campaign relies upon the audience response. When they enjoy your products and are curious to respond to you, you can understand that your marketing campaign is a massive success.

People will talk about your marketing campaigns more if they have a positive reaction to them. And the more they talk about your brand and products, the more probable it is that people will buy them.

b. Brand Recognition

Using imagery and word connections to draw attention to your company brand is an excellent approach to do it. For example, if you want to target young individuals, you may include trendy words and memes in your campaign. 

As a result, your target audience will identify your product with things they already consider to be fashionable and trendy.

c. Differentiation of the Customers

Another important method in which marketing influences customer behaviour is by eliciting emotions such as nostalgia and dread. For example, if a product is associated with certain brands, thoughts, images, or music from your youth, your feelings of brand loyalty may be influenced. 

On the other side, if a marketing effort instil fear in you, you may be persuaded to purchase the product in order to alleviate your anxiety and defend yourself

6 Principles of Influencing Customer Behaviour 

The following are the principles of influencing customer behaviour.

i. Reciprocity

Humans frequently feel compelled to repay a favour or reciprocate pleasant actions. For customers, this could entail providing a free sample or a substantial discount, for example.

ii. Commitment

When people are interested in something, they are more likely to stick with it. This involves fostering brand loyalty in business; when somebody is using a product or service, they are more willing to commit to paying for it again.

iii. Consensus

If more people do something, others are more likely to follow suit. When a brand can demonstrate its popularity or contentment among a large number of customers, other consumers are more likely to buy-in.

iv. Authority

People are more likely to listen to an expert than to a random stranger. While pack mentality is crucial, a credible expert speaking to the success of a brand’s product or service is essential for converting new customers.

v. Linking

Individuals that are genetically identical to the target consumer are more likely to persuade the consumer to buy.

People from comparable demographics are significantly more effective at influencing consumers than people they believe to be vastly different, whether in terms of ethnicity, socioeconomic class, religious tendency, or even shared interests.

vi. Scarcity

People have a tendency to want what they believe they cannot have. Making a product or service appear unique or as if it may run out of stock if they do not act fast makes it more appealing to the buyer and enhances the likelihood that they will purchase.

In this way, you can shape your customer behaviour effectively.

What are the Strategies to Alter Buying Behaviour?

If you are a marketer, what will you do?

Here are the 5 most powerful strategies to alter your target audience’s behaviour towards MLM products.

a. Spot Customer’s Expectations

Collect as much data to track customers emotions and what they are expecting from you. In this way, you will get adequate data to structure a powerful strategy. Thus, the sales associates can prepare to adapt to the changing behaviour of the customer by using this intelligent strategy.

b. Engage Target Audience

Start building conversation with the target audience. Then, investigate the relationship of the customers with your competitors. It will provide insights into the ideal customer-venture relationship of the competitors. 

Here, you can provide some samples, offers and discounts to get the customers closer to you.

c. Measure the Workings

You should examine the weakness and strengths of your current process in the light of competitors’ data. You can conduct a SWOT analysis, which is what I preferred. Find out the process that needs improvement.

If your firm is not using the same processes, you must change your strategies now. 

d. Mobilization of the Leaders

Participate in a planning session with line leadership to assist them in understanding and responding to the changing business environment. Make a timeline of your past behaviour, how you are dealing with it now, and expectations of change in the future.

e. Futuristic Vision

Setting a predefined objective will aid you to get the process more structured. It will assist to make a futuristic view of a company. Thus, a company can persist for a long period.

Hey,

Keep in mind that, Don’t overlook or reject what potential customers discover about your product or business on the internet. 

You should recognize and capitalise on your consumer behaviour, adjust your market proposition. Additionally, pitch to capitalise on their online intelligence gathering and show them clearly and confidently how to buy from your company. This will be the greatest decision for them.

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