The Three Types of Consumers Every Business Should Know

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There’s no doubt that most businesses prioritize customer satisfaction, but it doesn’t always mean they deliver on this promise. Most companies assume they’re giving quality service for their customers, but it doesn’t always go both ways—in actuality, studies show that 80% of companies believe they deliver a superior customer experience while only 8% of consumers share that same belief.

So what’s responsible for this gap?

More often than not, this gap in consumer satisfaction is due to companies failing to understand the needs of their clients. To provide great customer service, brands can’t act on instinct alone; rather, they will need to get an understanding for what their customers really want. When this problem is examined through a customer loyalty lense, many consumers fall into one of three different categories: the new loyal buyer, the customer with a passion for points, and also the cost sensitive shopper. These three types of consumers are common across nearly every business and knowing how to appeal to them is vital for success in eCommerce and retail alike.

The Brand Loyal Buyer

Brand loyal buyers want to conduct business with businesses which they’ve come to understand and respect—even when they have to pay more to shop with the brand of their choice. If businesses wish to capture this demographic, they will need to craft a solid brand loyalty strategy, especially since 75% of Americans believe brands should be doing more to promote customer loyalty. One proven way to cultivate and maintain brand loyal customers is to develop policies that align with your customers’ interests and moral principles. By promoting a specific charity or taking a stance in an environmental cause, you can develop a culture of corporate social responsibility, which is not only going to create better business practices for your brand, but will even craft a bond with customers who value community and are concerned by societal problems.

The Customer with a ‘Passion for Points’

While some consumers shop with brands based on the charitable causes they support, others are driven by the guarantee of strong rewards programs.  Over half of all consumers would decide to shop at the same retailer over another if they had the choice to earn loyalty rewards at their favorite airline, hotel, or vacation brand along with their purchases. This type of customer’s primary motivation is to earn as many rewards points as you can while shopping. Brands can appeal to this group of shoppers by generating more relevant opportunities for them to earn and redeem rewards.

One industry that is quickly attracting rewards-focused customers is travel, where loyalty programs like Delta’s SkyMiles and JetBlue’s Flying Blue are giving consumers the capability to earn frequent flyer miles on hotel bookings or invest frequent flyer miles to pay for a hotel booking. This provides travelers with a passion for points the unique opportunity to connect their entire traveling journey with their loyalty rewards—and increased incentive to stick with a new or program that can offer these opportunities.

The Price Sensitive Shopper

The third kind of consumer that businesses are likely to come across is the price-sensitive shopper. As the name suggests, these clients are attracted to items that are priced in a substantial discount or by things they think are fairly priced. Catching the price-sensitive shopper requires a bit of careful consideration—price your merchandise too high, and they’ll turn to your competition, but price them too low and they can think that your offerings are of poor quality. If you’re not sure whether you need to slash or raise costs, monitor your competitors and your business’s market to see how your current prices compete. And because price-sensitive shoppers are always looking to save, brands with loyalty programs should consider offering split money payments—transactions that allow customers to pay with a combo of loyalty points and money.

At the end of the day, it is impossible for manufacturers to know exactly what consumers are thinking—but the wonderful news is that most shoppers are mostly motivated by one of three things: brand loyalty, a powerful rewards program, or price. Along with developing a solid brand voice (including a culture of corporate social responsibility), providing more opportunities for customers to earn and redeem benefits, and offering split money payment options, brands may deliver a superior customer experience to your three most common kinds of consumers across most retail and eCommerce industries.