Several factors influence consumer behavior, including psychological, social, cultural, personal, and economic. Product marketers must understand how these factors impact the customer buying process so that they can also understand what turns a lead into a converted customer.

What is the consumer buying process?

The consumer buying process refers to the stages a customer experiences during the customer journey.

There are five steps in the consumer buying process:

  1. Problem recognition
  2. Search process
  3. The consideration of alternatives
  4. Selection stage
  5. Post-purchase evaluation

The complexity and time taken to pass through each stage varies for each customer.

For example, if a consumer is investing a significant sum of money and buying a house, their buying process and decision-making will be longer, in comparison to a consumer making a comparatively small purchase.

Sometimes, the process is straightforward, and sometimes it’s convoluted. Regardless, there’s always a factor influencing the behavior of a consumer.



Factors influencing consumer behavior

Put simply, there are dozens of factors that influence consumer behavior. To give you a comprehensive overview of what they are, we've group the leading factors into five key categories: psychological, social, cultural, personal, and economic.

Let's unpack them one-by-one, beginning with psychological factors.

Psychological factors:

Perception

Consumer perception plays a key role in customer conversion; ads, promotions, social media coverage, and reviews all have a profound psychological impact on convincing a buyer that your product is a worthwhile purchase.

Learning

Each time a consumer completes a purchase, their product knowledge expands.

There are two types of learning: conditional and cognitive learning. Conditional learning relates to when a consumer is repeatedly exposed to the product, prompting a response. Cognitive learning centers on the consumer using their product knowledge to find a solution from their purchase.

Attitudes and beliefs

Consumers have preconceived notions and ideas of products, and these shape their buying decisions significantly.

To establish a favorable image of their product, businesses invest strongly in marketing campaigns, with celebrity endorsements a common method used to attach value and credibility.

Social factors:

Other humans have a profound effect on consumer behavior; buyers purchase products to a) imitate others, b) become socially accepted, or in many cases, both.

For example, cast your mind back to when you were a teenager: given the choice, did you pick non-branded sneakers over Nike or Adidas?

Of course not. Why? Because you wanted to fit in and be seen in the brands that had social credibility as being cool, or more expensive.

Examples of social factors influencing consumer behavior:

Family

Family life plays a crucial role in molding consumer behavior. When we see those around us buying particular products throughout our childhood, we become familiar with these brands and build a sense of trust in them.

Nostalgia then influences our consumer behavior as we transition into our adult lives.

Reference groups

A reference group is the group of people with whom a person associates themselves with. The majority of the time, the people within a reference group share buying behaviors and influence each other’s consumer habits.

Status

Individual socioeconomic status also has a huge steer on consumer behavior.

For example, the average annual salary of a CEO of a US-based company in 2024 is $167,000. Conversely, the average annual salary of a manual labor worker in the US is $38,000.

The salary of the CEO presents the opportunity for a more indulgent lifestyle, while the manual worker will have to be less lavish in their spending habits.

Cultural factors:

According to Adherents, there are 4,300 religions in the world, with many promoting their stance on values and ideologies relating to consumerism. In some cases, buyer behavior can be influenced by the belief systems of their respective community. For example, the Buddhist faith teaches its followers cravings, in this case, purchases usually don't “make us happy,” or, if they do, this isn’t for long. Therefore, an Orthodox Buddhist, guided by this philosophy, is unlikely to indulge in an extravagant lifestyle.

Personal factors:

The behavior of every consumer behavior is influenced by their personal preferences. Different personality traits produce alternative perceptions that play crucial roles in the consumer buying process.

Personal factors include:

Age

Age is perhaps the most obvious personal factor that influences consumer behavior. While a single fifteen-year-old may be interested in the latest piece of technology or a new line of beauty products, a married forty-year-old is more likely to veer towards purchases to support the family.

Income

As shown in my previous anecdote about the CEO and manual laborer, income will always be a major factor in influencing consumer decisions. A personal budget will dictate whether or not you can afford to buy a product or not.

Occupation

A consumer will make a buying decision based on their occupation. For example, if a high school teacher needs a new outfit for work, they’ll be guided by the school dress policy. On the other hand, if a self-employed personal trainer needs new gear for their job, they’ll invest in sports clothes of their own choice.

Lifestyle

We don’t all abide by the same lifestyle standards. Some people haven’t touched a drop of alcohol or smoked a cigarette in their lives, while others drink like a fish and smoke like a chimney. The same can be said for eating habits; sometimes, people eat takeaway food several times a week, while others wouldn’t touch it with a bargepole. The key point? Lifestyle influences what we buy, how often we buy it, and how much money we spend on it.

Economic factors:

Personal finances

Disposable income and purchasing habits work in tandem; if you have more spare cash, you can afford to spend money on things more liberally.

Credit

It isn’t uncommon for stores to offer their customers credit to encourage them to spend more money.

Finance deals for cars are a perfect example of this. In 2020, the average price of a brand-new car was $37,876. It’s fair to say that the every man in the street doesn’t have that kind of money banked for a rainy day. Offering finance deals and spreading the cost over monthly installments makes the purchase more accessible for the less affluent consumer.


What factors have the biggest impact on consumer behavior?

Price remains a fundamental consideration for most consumers, often serving as an initial filter or benchmark. However, product quality and perceived value have been shown in numerous studies to be increasingly important factors, with many consumers willing to pay more for items they believe offer superior quality or durability.

In fact, a landmark study conducted in the Czech Republic in 2007 examined factors influencing consumer purchasing behavior across various product categories, and found that product characteristics, quality, price, necessity of need, and previous experience were the most influential factors across most product categories.

Brand reputation and loyalty also play significant roles, as consumers often use brands as shortcuts for assessing quality and reliability.

Personal factors such as age, lifestyle, and individual preferences heavily influence choices, as demonstrated in studies like Hervé and Mullet's (2009) research on age-related differences in purchase criteria.

Social influences, including peer recommendations, family opinions, and cultural norms, can strongly sway consumer choices, particularly in the age of social media. Convenience and accessibility, both in terms of product availability and ease of purchase, have become more crucial with the rise of e-commerce.

Lastly, ethical considerations such as environmental sustainability and corporate social responsibility are increasingly factoring into consumer decisions, especially among younger generations. The relative importance of these factors can vary significantly depending on the product category, individual consumer characteristics, and broader socio-economic contexts.

What can be said with certainty is there’s no definitive reason why consumers behave how they do, and given the diversity within the market, the likelihood of this changing is slim. However, it's important for PMMs to consider the five steps of the buying process, and the factors influencing consumer behavior, when launching products, finding product-market fit, creating a GTM strategy, and so on.

Want to learn more?

Wouldn’t it be awesome if we could line our customers up, throw on a pair of magic goggles, and read all of their minds? Imagine the insights you could collect to influence your entire product marketing strategy!

Well, we might not have magic but we do have a Consumer Psychology Certified course to help you… which is pretty much the same thing. 😏

Led by Alex Chahin, Senior Director of Product Marketing at hims & hers, you’ll learn how to tap into consumer psychology and reap the rewards of applying knowledge around behavioral economics to your product marketing strategies.

By the end of this course, you'll:

✅ Have a definition of consumer psychology in marketing and how advertising affects consumer behavior.

✅ Better understand how to group pain and gain points.

✅ Understand how personal factors and individual differences affect people's buying choices.

✅ Be able to identify what your customer’s default action is.

And much more...