The Impact of Social Media on Consumer Behavior

Social media has changed the game for many industries and disciplines, including consumer behavior. Consumer behavior is a relatively young study, emerged in the 1940s and 50s as a sub-discipline in the marketing area. It examines how emotions, attitudes and preferences affect the buying behavior of consumers.

The traditional model of consumer behavior was represented by a linear diagram of a purchase decision. It assumed that the average consumer would go through the following stages in his/her buying behavior:

• Need recognition / problem awareness
• Information search
• Evaluation of alternatives
• Post-purchase evaluation

If the post-purchase evaluation was positive, there would be a high chance of establishing brand loyalty and the job of a marketer was to achieve that through optimizing their messaging in every step of the process. However, in a relatively short period of time, not longer than 15 years, the society went from a linear, retail-focused model to today’s accelerated, digital-centric model of consumer behavior.

Today’s buying behavior is often called online decision making. It is characterized by, among other things, information overload. Modern consumers are bombarded with thousands of pieces of information every single day over the Internet, and their attention span has deteriorated rapidly. This means that a typical consumer’s evaluation cycle is significantly cut from a stage of multiple days or hours to a matter of minutes or even seconds, which is important for the marketers to know, as the traditional marketing communication strategies do not work anymore.

The modern consumer’s decision process is much more dynamic. It starts with the initial consideration set, same as in the traditional model, initiated by the need recognition. It is followed by information gathering and active evaluation of the alternatives. Social media and the Internet technologies have allowed an average consumer today to have access to information about the products and services on a global scale. This means that, for example, the evaluation of different brands of shampoo is not limited to the shampoos offered on the same shelf from a supermarket. Today, consumers can type in their online search engine the exact type of product they are looking for, and very quickly make their decision based on their price-sensitivity, quality, price-value ratio of the product, user reviews, etc.

One major difference from the traditional model is in the post-purchase experience. It is much more difficult to achieve brand loyalty today regardless of the positive experience with the product/service. There is an ongoing exposure to competitor’s products/services and a constant battle for the consumer’s attention. This leads to new triggers and it gets harder and harder to close the loyalty loop. Thanks to the power granted by the Internet, consumers today easily hop between different stages and between multiple companies. 

What does this mean for the companies? It means that they need to acknowledge the increased consumer power and start co-creating their products/services and brands with consumers. They need to continuously invest in technology to accurately target consumers, keep experimenting and updating their offer to keep the interest, and finally, focus on customer-centric marketing. These are becoming parts of the basic survival kit for any company that wants succeed in the long-run.

Author: Ena Fejzagic, lecturer at LIGS University

The article was created as a follow up to our open webinar