Maslow’s hierarchy of needs gives a detailed analysis of human needs according to their various life stages. So, customer understanding is critical to building a viable business. A significant dose of psychological studies is all it takes to understand how to play the game to win in business. Whether you want to understand human nature or improve your strategic analysis for business deals, knowing your customers is vital.
This article will enlighten you about consumer behavior and how their needs create patterns you can leverage to win their patronage. Let us begin!
What is Maslow’s hierarchy of needs?
It is a theory of motivation put forward by Abraham Maslow in 1943. The theory states that our actions are motivated by some physiological needs. Moreover, the idea is well represented by a pyramid of human needs. The most basic needs are at the bottom and the more complex needs are at the top of the pyramid.
The theory further suggests that human beings are motivated by the desire to fulfill their basic needs first. After which, they begin tackling their complex needs. The core of this theory is Maslow’s interest in studying what makes people happy and how far they are willing to go to achieve happiness. In business and corporate society, Maslow’s hierarchy of needs serves as an effective team motivation strategy for turbulent times.
Human needs are akin to their instincts and cannot go unattended. Therefore, a proper understanding of human needs engenders excellence in customer service. The reason is that business owners can use this knowledge to streamline their products and services to meet consumer needs. Eventually, customers remain loyal to a particular enterprise because they feel the company somehow understands them.
The five components of Maslow’s hierarchy of needs as it relates to customer behavior
Maslow’s hierarchy of needs explains that people will first fulfill their basic needs at the bottom of the pyramid before progressing to the more complex ones at the top. Also, most people seem to get stuck at the bottom of the pyramid until they achieve fulfillment before climbing up.
Therefore, we will discuss the five components of Maslow’s hierarchy of needs, from the bottom essential to the top complex needs. Since customers are human beings, they are less likely to behave differently and will conform to the theory. Here is how it happens.
Physiological needs are the basic physical needs like food, water, air, reproduction, clothing, and shelter. Also, they are the basic needs of man, without which survival would be impossible. Such knowledge guides you towards what type of business to establish if you are starting. People who provide the basic human needs make regular sales.
Security and safety
People like to control their lives, their choices, etc. As a result, the power of decision-making is essential, even in business. Interestingly customers want to feel safe and in control of their choices. Some of the basic security and safety needs include but are not limited to financial security, health and wellness, and safety from accidents and injury, thus necessitating insurance policies.
As an entrepreneur, you can use this knowledge to provide financial security for your customers by ensuring they feel safe about running huge financial deals. Therefore, an effective strategy is to provide transparent financial documentation like online generated invoices that are easily accessible. You can also improve your staff strength by upgrading your online paystubs. A formidable staff strength also gives customers faith in your business. It shows that you will be in business for a long time.
Believe it or not, social needs drive customer behavior in business. Your customers want to enjoy a sense of belonging while doing business with you. Essentially, many of the top firms in the world thrive on socialization, relationships, and a sense of community. To fulfill the human need for socialization, you can send friendly emails to your customers. You can also use these periodic emails and newsletters for invoicing your customers and getting them to pay outstanding invoices.
There is no overemphasizing the need for appreciation and recognition. It is an essential human emotional need. One of the most effective ways to keep your customers hooked is to show considerable recognition. Your customers need to feel that you are in business because they keep coming. Most enterprises employ gift-giving at specific periods to offer their customers appreciation for their patronage. Some companies print thankyou notes and paper bags to show that they value their customers. As an operational procedure, most establishments take their employees on customer relationship training courses to care for customers’ self-esteem.
Self-actualization is at the apex of Maslow’s hierarchy of needs and highlights the human need for personal growth. People have an undying need to feel like they are making a difference through their contributions. As a result, customers also need to think like their opinion counts when doing business with you. Self-actualization is the reason behind most negotiations and suggestion boxes in several establishments. Some companies invite top customers to business meetings and make their shareholders feel empowered to drive the business.
Even though Maslow’s hierarchy of needs applies to psychology and sociology, its wisdom is applicable in business. Customers are human beings, and every successful business deal hinges on the smooth interaction between the business owners and their customers. Hopefully, this piece shows you how this age-old theory helps build entrepreneurial success.
FAQS: Why is Maslow’s hierarchy of needs important?
Why is Maslow’s hierarchy of needs important?
Maslow’s theory emphasizes the efficacy of human needs in motivation. It explains that human beings seem stuck in a particular level in life for failure to satisfy the needs of a previous level. Therefore if we fail to meet our initial needs, it may hamper our abilities to progress to the next. As a result, we gain more understanding of human nature on a general level.
How does Maslow’s hierarchy of needs apply to your personal life?
At the most basic level, Maslow’s theory emphasizes our psychological needs, including indispensable human factors for existence like air, food, warmth, water, sleep, shelter, clothes, etc. The theory highlights human deficiencies all-around life and existence without which life will be unpleasant.
What factors influence your consumer behavior?
Several factors influence consumer behaviors like environmental, marketing, psychological, etc. Also, family, culture, and personal factors shape consumer behaviors. Businesses collate data on consumer behaviors to help them tailor their supplies, goods, and services to suit and meet consumer needs for better business growth.