How Economic Factors Affect Consumer Behavior
Are you losing
customers and blame online sales?
When I visit
businesses with slow sales 1I hear many excuses for why they have so few
customers this month. It seems 2 they are willing to blame online sales, 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. 3Money
is not spent if 4 the customer
is worried 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 more5they will pay down debt or keep money for the rainy
days. 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 6the CCI
goes under 100 the customers stop spending.
How the economy
affects the consumer behaviour?
7The consumer is bombarded with messages of doom & gloom
from the newspaper and other news media
telling them all about the problems in the world. Currently 8we have
concerns with ;
- 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
9Business owners need to pay attention to these economical
factors. 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, 10sales will decline in
most sectors. The instability of employment in manufacturing, 11financial services and construction sectors
will cause customers to focus on what would happen if 12they
lost their employment. 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 13the global recession
and collapse of some international organisations thought to be secure from the
economy wobbles, 14super funds have lost millions of consumers
financial net.
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 + V1 + 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
