How Economic Factors Affect Consumer Behavior
Are you losing customers and blame
online sales?
When I visit businesses with slow
sales I hear many excuses(1) for why
they have so few customers this month. It seems they are willing to blame online sales(2), the local government
policies, or even the local council. Their comments only serve to highlight the
fact they do not understand that the current economic factors have more to do
with the customers behaviour than any of those other factors. Money is not spent(3) if the customer is worried(4) about their
future. The single biggest factor for consumer behaviour spending patterns is
how secure they feel their short-term future is regarding savings, employment
and home payments. The more insecure they feel about the economy, the more they will pay down debt or keep money for
the rainy days(5). This ‘happiness’ factor is measured by the consumer
confidence index which is reported daily showing how secure the consumer
believes the future is. When the CCI goes over 100 points, customers will
spend. If the CCI goes under 100 points(6)
the customers stop spending.
How the economy affects the consumer
behaviour?
The consumer is bombarded with messages of doom & gloom
from the newspaper(7) and other news media telling them
all about the problems in the world. Currently we have concerns with(8) ;
- Eurozone debt and several
countries in recession
- Declining natural resources and
climate warning
- Instability in several governments
causing public unrest & armed violence
- Over a 20% drop in Australian
super and shares
- Loss of primary industries with
large scale unemployment happening almost weekly since start of 2012
Business owners need to pay attention to these economical
factors(9). Mortgage payments are often the
largest expense a customer has and will not risk losing their home just to take
a chance and buy your products. When there is uncertainty in the mortgage
rates, sales will decline in most
sectors(10). The instability of employment in manufacturing, financial services and construction sectors
will cause customers to focus on what would happen(11) if they lost their employment(12). So they
start saving money for their possible unemployment and spend it on career
change prospects like training in new skills. Due to the high costs of aged
care and related retirement expenses many consumers are looking ahead to their
future by investing in superannuation and/or shares to be financially secure.
With the global recession and collapse of some international organisations
thought to be secure from the economy wobbles(13), super funds have lost millions of consumers financial net(14).
What the current economy means to
your customers?
They are unsure(15)
if they will be able to keep the family
home(16), pay for their retirement and even if they will have a job in the next six months(17). So the consumer
goes into survival mode by saving money(18) and stopping all unnecessary spending. As a business owner or manager you need to
pay attention to the local economic factors(19) as they will mean the difference between meeting your sales targets or not(20).
Analisis tenses :
1. I hear many excuses : S + V1 + O = Present Tense
2.
They are willing to blame online
sales : S + Tobe + V ing + O = Simple Present Continous
3.
Money is not spent : S + Tobe + O =
Present Tense
4.
The customer is worried : S + Tobe +
V2 = Past Tense
5.
They will pay down debt or keep
money for the rainy days : S + Will + O = Present Future
6.
The CCI goes over 100 points : S +
V1 + O = Present Tense
7.
The consumer is bombarded with
messages of doom & gloom from the newspaper
:
S + Tobe + V2 + O = Simple Past Tense
8.
We have concerns with : S + V1 + O =
Present Tense
9.
Business owners need to pay
attention to these economical factors :
S + V1 + O = Simple Present Tense
10. Sales will decline in most sectors : S + Will +V1 + O =
Simple Future
11. Financial services and construction sectors will cause
customers to focus on what would happen
: S + Will + V1 + O = Simple Future
12. They lost their employment : S + V2 + O = Simple Present
13. The global recession and collapse of some international
organisations thought to be secure from the economy wobbles : S + V2 + O/
Complement = Simple Past Tense
14. Super funds have lost millions of consumers financial net :
S +
Tobe + V3 + O = Past Perfect
15. They are unsure : S + Tobe + O = Simple Present
16. They will be able to keep the family home : S + Will + V1 +
O = Future Tense
17. They will have a job in the next six months : S + Will + V1
+ O = Simple Pesent Future
18. The
consumer goes into survival mode by saving money : S + V1 + O = Present Tense
19. As a business owner or manager you need to pay attention to
the local economic factors :
S + V1 + O = Simple Present Tense
20. They will mean the difference between meeting your sales
targets or not :
S + Will + V1 + O = Simple
Future.
