Understanding the mindset of higher value customers
A fundamental element of any successful growth strategy is defining your most profitable customer segments, and understanding what matters deeply to them when they are making a purchase in your category.
This requires data-driven insights that reveal both the rational and emotional needs customers seek to fulfil when making a purchase in your category, and the behaviours, attitudes and desires that shape their decision making.
This approach is key for both B2B and B2C business propositions that want to attract and retain the customers who invest more, and do so more frequently.
What are key factors to consider when understanding higher value customers?
1. Spending & decision making behaviours
Start by analysing the spending characteristics of the most profitable customers, whether they buy from you or your competitors. Understand their propensity to invest in your category and related products and services. Evaluate their typical behaviours when they become aware, engage and research options in your category. Then identify their media consumption habits or what shapes their perception and choices in your category.
2. Attitudes and values
The best predictor of future behaviour lies in a customer’s attitudes and values. Invest time in understanding the key behavioural drivers that influence their purchase decision. For example, consider their views on sustainability, ethics, risk tolerance, openness to new experiences, innovation, control…
3. Desires
Ensure you have insights on the key functional and emotional factors that drive purchase decisions in your product or service category. Beyond meeting basic expectations, premium customers seek higher order desires and benefits. These can include factors such as design, quality, the founder’s story, and a personalised customer experience that aligns with their unique preferences.
4. Use demographic data as a filter
While demographic data is important, research shows it is not the primary factor to start with when evaluating purchasing propensity and spending level within any given category. Start by defining your customer using attitudes and behaviours, then use demographic filters to further refine your profile and improve your outcomes.
5. Price vs. Value
When a product becomes commoditised and competitors offer minimal differentiation, customers tend to default to lower prices when making a decision. However, when feeling or emotion is involved in the purchase, and a range of options exist, consumer behaviour shifts and the value versus price equation will vary significantly between customer typologies. In this case understanding the mindset of higher value consumers is key to attracting and retaining them, and determining the most effective pricing and positioning strategy.
Premiumisation Partners work closely with Dr Ross Honeywill, the social scientist recognised for this ground-breaking work in the field of consumer behaviour. His NEO mindset typology, uses Roy Morgan Single Source data and rich qualitative insight to classify consumers by their attitudes, behaviours, and propensity to spend, helping businesses deeply understand customer who spend more, more frequently.
Start by asking your team to complete a quick premium value diagnostic that will identify your current strengths, areas for improvement, and where misalignment is undermining how you attract and retain this high spending audience.