Consumer Cycles 101
The nature of most things is cyclical, and business is no exception. Just as we experience highs and lows in life, our businesses go through similar ups and downs. At times unpredictable, but for the most part, a closer look can reveal reliable, informative patterns. These insights can be used to strengthen business strategy and maximize revenue.
Consumer cycles are affected by countless factors - from personal situations such as life stage, to social factors like current trends. Each of these factors sets the individual consumer on their own unique cycle — and no two buyers are exactly alike. That’s why each customer moves through the marketing funnel at a different pace.
With that being said, there are some overarching patterns that affect a large enough percent of consumers to be considered as widely accepted standard cycles. The most obvious being the holiday season (Black Friday, Cyber Monday, Christmas gifting, etc.), but there are plenty of other cycles as well, including grand openings and popular marketing campaigns. Then of course there are the larger market cycles that span the course of years and even decades, but for now let’s focus on the shorter term consumer cycles.
Predicting the periodic fluctuations in consumer purchasing patterns can really give a business the upper hand.
Understanding cyclical data can help inform future planning for things like marketing, budgeting, revenue, staffing, and so on. Predicting the periodic fluctuations in consumer purchasing patterns can really give a business the upper hand. It is absolutely worth the time to study the data to learn about potential future repetitions.
If you’re new to the game, and you're still just getting your business off the ground, you clearly won’t be able to study your own data from years past. What you can do is look at similar operations in terms of industry, size, newness, etc. and see what sort of patterns they experienced.
Seasonality is characterized by data that experiences regular, predictable changes that recur every calendar year.
The number one most common type of consumer cycle, that affects all consumers, is seasonality. Seasonality is characterized by data that experiences regular, predictable changes that recur every calendar year. Seasonality is broken down into two groups: holiday-driven and weather-driven shopping.
On-season is when a business is likely to make the most sales, based on past years’ data. These are also the times during which we see businesses promoting the most sales, discount codes, and exclusive offers, in order to make the most of their eager-to-buy audience.
Many industries do the most marketing during off seasons as a way of advanced planning for the busy season.
Off-season is marked by a lull in consumer spending, and is a great opportunity for businesses to regroup and pre-plan for the next on-season. In fact, many industries do the most marketing during off seasons as a way of advanced planning for the busy season. It takes time to nurture a lead, so make sure you take that into consideration when strategizing your marketing timeline.
For businesses that don’t typically drive strong proactive marketing campaigns in the off seasons, it's still important to have a game plan for the lull period. Whether that be fixing up your website and/or branding, focusing on a strong social media presence, paying extra attention to pre-existing customers, or hiring and training new staff.
While some businesses are obviously dramatically impacted by seasonality, such as Christmas tree retailers or travel companies, the truth is that seasonal cycles affect every type of business, even B2B. That’s because, even in B2B, people are behind the purchase, and people are affected by seasonality. For many B2B businesses, the peaks and valleys of consumer cycles are more frequent than with B2C, which requires being a bit more on your toes.
Knowing the why is just as important as knowing the when.
There is no one size fits all answer to understanding consumer cycles. The secret is to do diligent research into your specific industry to understand what seasons are giving the highest results, and what seasons are more of a lull, and why. Knowing the why is just as important as knowing the when. Being aware of the trends without truly understanding them is close to useless, because it doesn’t help inform what’s driving consumer behavior. Purchasing motivation is the number one tell tale sign of how to best drive sales.
Forecasting consumer cycles, when informed by real data, can help manage sales expectations and realistic goal setting. This keeps the budget on track and allows leaders to prevent wasted investment of time/money during cycles that are less fruitful. To make the most of your consumers’ cycles, take the time to chart your sales data and see what kind of trends you can spot. You might be surprised by what you find, and how that knowledge can benefit you.
