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Customer Behavior Modeling: Get To Know Your Buyers


Customer behavior models (CBM) are crucial for understanding why, when, and how people spend their hard-earned money on a product or service. Your customer acquisition efforts can benefit greatly by applying these models by letting you predict who will make a purchase and target the best customers at the right time with pinpoint precision. 

In this article, we will explore the most valuable CBMs and explain how you can master their use to craft highly-effective customer-oriented experiences. 

What Is A Consumer Behavior Model?

We live in an increasingly competitive world, and businesses have become much more analytical and thoughtful in their decision-making process. And that is where CBMs come in. 

A customer behavior model is a technical method for explaining how and why people make buying decisions. The primary function of CBMs is to outline a predictable path of customer decisions through conversion while helping you seamlessly navigate through every stage of their journey. 

CBMs may sound complicated, but they are far from it. They are simply a way to create a story centered around the customer’s behavior that guides you toward polishing and improving the customer experience. 

A customer behavior model refers to a person’s buying habits based on their demographics, education, personal beliefs, needs, desires, long or short-term goals, and more. 

Businesses must understand that every person’s attitude and thought process toward purchasing any product or service is unique. Should the business fail to address the unique nature of its target customer group, chances are that the success of the product or service they offer will start dropping significantly. 

Why Is Customer Behavior Modeling So Important?

In the world of today, customer data is the new gold. 

Customer data is liquid gold that can be shaped for different purposes. In the world of business, it can be extracted from email, social media, live chat, and mobile devices. And since CBMs are created mathematically, they have sharp accuracy, which makes them extremely valuable to any type of industry. 

CBM is crucially important for marketers, startup creators in search of the perfect target audience, or even companies that want to simply put an experimental product out into the world.  

Let us take a look at some of the biggest benefits of CBM below:

Segmenting Customers:

CBM can do what all marketers do before starting a new campaign: it segments people into smaller groups with different traits of a similar nature. This makes the creation of targeted campaigns much easier while increasing the potential for high conversion rates. 

Customer Life-Cycle Tracking

Customer life-cycle is a term used to describe the various stages of reach the customer goes through (acquisition, conversion, retention) and the customer’s level of loyalty to a certain business. At every stage of the process, customers reveal various decision-making traits, choices, and spending habits. CBM modeling helps monitor their journey for each segment of users. 

Consumption Pattern Prediction:

Marketers know that the retention of existing customers brings in more profits than the acquisition of new ones. Hence retention and churn are crucial for business success. Loyalty programs and marketing actions are the marketer’s top tools for ensuring maximal retention and churn prevention. 

Marketing Activity Scaling: 

Nowadays, automation is a vital ingredient for business success. It helps marketers design and executes intelligent campaigns that normally require lengthy manual labor.

For marketing automation to work properly, however, there needs to be a precise segmentation of users. CBM takes it to the next level by ensuring that such data is readily available, which opens up opportunities to drive campaigns at scale. 

Understanding The Buyer

To understand customer behavior, you need to know who your customers are and what they’re after. Sadly, you can’t have one on one meetings with every buyer to acquire this information. Instead, you will need to study and segment your average customers via direct feedback and thorough market research. After that, you’d have to create an accurate buyer model based on the information you have gathered – this is called a buyer persona. 

The buyer goes through the sales funnel at a steady pace and checks every qualified lead box. When you understand the wants and needs of your buyer persona, you will also be able to get an accurate diagnosis of the pain points for a massive part of your customer base. These precious insights will help you create effective, targeted content and high-end marketing materials. One of the key ways to understand your buyer persona and your customers at large is to examine why they might engage in predictable buyer behaviors. 

Types Of Customer Behavior

To understand customer behavior, first, you need to understand the connection between psychology and business, as people are influenced by different psychological factors, including quality of sleep and the last thing they read on the internet that made an impression on them. 

Some types of customer behavior should be paid special attention to. According to Henry Assael, customer behavior can be divided into four key types:

  • Complex buying behavior
  • Dissonance-reducing buying behavior 
  • Habitual buying behavior
  • Variety seeking behavior

Customer behavior is dependent on two main variables: the level of their involvement with the purchase and the number of differences between businesses or products/services. Familiarizing yourself with these variables will give you a better grasp of how leads interact with your product or service as they travel through each stage of the customer journey. 

How CBM Can Bring Revenue Sky-High?

As a broader concept, customer behavior modeling helps boost the value of the customer-business relationship. It gives us precious and easy-to-understand knowledge about people’s preferences, which can lead to exciting outcomes. 

Here’s a deeper look at how CBMs can help your business grow exponentially:

Elevate Customer Lifetime Value 

This is a crucial aspect of the success of any business. The customer lifetime value is the total financial investment of the customer during their lifetime relationship with a business. 

Extending the customer lifetime value as much as possible should be your ultimate goal, considering how difficult it is to keep existing customers and keeping acquisition costs to a minimum level. With customer behavior modeling, companies can simply look at customer segments that are ready for repeat purchases, cross-selling, and up-selling and make their decisions from there. 


Minimize Customer Churn 

No matter the industry, customers share the same set of common traits that strongly reveal the likelihood of churning. 

A bank, for example, can spot customers who have a high likelihood of churning by keeping track of the following factors: 

  • Clients are not accepting the financial plans offered by their financial advisers
  • A drop in the number of investments handled by the customer’s business
  • A non-existing or negative customer feedback response 

CBM helps dive deeper into the details of these traits while also providing marketers with a broad overview of precious data collected from email, social media, CRM, and other sources, making it highly reliable. With such valuable data at your disposal, you can act promptly to prevent customer churn, which will positively affect revenue.


A good half of customers worldwide say they are willing to become repeat buyers after receiving a personalized shopping experience with a business. However, people who do not receive a personalized experience are highly unlikely to become repeat buyers. People are much more likely to churn if they are simply treated as part of the crowd, and that is why it’s important to make them feel special (in some cases, even like VIPs).

Nowadays, every company worth it’s salt has developed a strong personalization approach. But this cannot be accomplished without data. 

With CBM, you can develop highly-targeted campaigns with each segment of customers in mind so that you can get higher conversions and ROI for every penny spent. 

The 10 Main Customer Behavior Models

Here are the 10 most widely-used CBMs:

1. Pavlovian Model

The Pavlovian Model refers to a learning method that mixes a conditioned response with a stimulus. A good example — the word ‘sale’ can act as a strong motivator for people to go shopping. 

2. Economic Model 

In the Economic Model, the main theme is the natural desire of people to spend little but gain a lot. It considers that, for example, when there is a price drop, people tend to buy more of the product in question. 

3. Input, Process, Output Model 

Here, the customer input is the business’s marketing effort (e.g., price, product, and so on), and the customer’s social environment (culture, family, etc.) influences the buying decisions the customer will ultimately make. 

4. Psychological Model 

According to Abraham Harold Maslow’s psychological customer behavior model, a customer is driven by their strongest need at a given time. The model also says that needs are prioritized, and people tend to first satisfy their basic needs before satisfying their secondary needs. 

5. Howarth Sheth Model

In this model, customer behavior depends on Stimuli inputs. Furthermore, the Howarth Sehth Model defines outputs, which are reactions to a certain stimulus and end with the buying decision. There are, however, variables that affect the learning process between inputs and outputs. 

6. Sociological Model 

The Sociological Model considers society’s impact on the customer’s decision-making process. For example, if a customer belongs to a special category that only wears a specific type of clothing, like-minded customers will conform to these choices and buy similar clothes. 

7. Family Decision-Making Model

In The Family Decision-Making Model, marketers analyze the customer’s family in buying decisions. This refers to the collective decisions made by the family, even if one person is buying the product. 

8. Engel-Blackwell-Kollat Model 

Here, the model combines four customer behavior components, which are:

  • Information processing – exposure, attention, etc.
  • Central control unit – personality and attitude of the consumer
  • Decision process – problem recognition, information retention, etc.
  • Environmental influences – income, social class, etc.

9. Industrial Buying Model

This customer behavior model takes influences from task-oriented objectives or organizational factors. These can include the lowest price and best product based on overall quality, as well as non-task objectives like personal treatment, promotions, job security, and more. 

10. Nicosia Model 

Here we have a model with a tight focus on the relationship between a business and its potential customer. In the Nicosia Model, a company’s ads influence the customer’s predisposition towards a product or service. In turn, this can lead to them wanting to find out more about the goods on offer. 

Creating A CBM

As already mentioned, with a customer behavior model, you can gain a deeper understanding of how and why people make their buying decisions. It’s a highly-effective tool that helps businesses analyze exactly how a buyer persona interacts with your business. The reason for creating a CBM model is to uncover the motivations of your personas, as well as their priorities, while they travel through each step of the buyer’s journey. 

To create a powerful CBM, follow these 4 key steps:

1. Segment Your Customers

Customer base segmentation is the first building block towards creating an effective CBM and buyer personas. There are approaches you can take to segment your customers while using characteristics, including demographics and engagement habits. 

Analyzing gender, age, demographics, social media behavior, and internet activity will help you to create various powerful behavior models for each buyer type. 

No matter your methods of choice, the end goal of customer segmentation is to create useful buyer personas to get a better grasp of how to market them and boost their customer lifetime value. 

2. Identify Trends

Now that you have segmented your customers, it’s time to look at the trends that have emerged from each buyer persona. What are the external factors that may have influenced a buying decision? What is the context for a customer’s needs?

3. Compare Data

With the collected customer data on trends and buyer segments in hand, you should start collecting quantitative data for comparison. An in-depth analysis will include primary, secondary, and tertiary data, which include social insights, subscription rates, email data from your business, customer reviews from competitors, and statistics from the industry as a whole. 

Compare all this data with the data collected from your segmented customer base and the identified trends and cross-reference each data set. What are the customer journey stages of progress for each buyer persona? Which persona spends money on which product? When was the purchase made, and from what outlet? Which purchasing method has been used? 

While comparing your data sets with the customer’s journey map, do another trend analysis. Note what obstacles and unique behaviors are occurring and see how your high-value customers stand out from the rest in terms of purchasing behaviors. 

4. Apply And Analyze

Use these precious insights to power up your next marketing campaign with fully optimized content and delivery methods. Understand the effectiveness of your efforts by examining your conversion rates and the customer lifetime value. New trends come up regularly, so it is of vital importance to constantly analyze and adapt to any customer behavior changes. — Your All-In-One Solution

When it comes to customer behavior segmentation, is a trusted and globally recognized leader in the iGaming/Casino/Sports Betting industry and beyond. 

Smartico Behavioral Segments: An Introduction

Recently, we introduced a segment based on the behavior of the user. 

It combines data from both the user profile state and their behavior. The segment is based on the historical behavior of the user, e.g., users that did total wagering of more than 100 EUR on Slot games in the last 30 days.

This type of segment is updated by a defined schedule. For example, once a day at 5 PM.

From all other perspectives, this type of segment can be used as any other in all possible contexts of the Smartico platform.

To set up the segment, you must fill in the following sections:

  • User activity and timing – which activity you would like to track and for what period? The maximum time for analysis is 90 days.
  • Event attributes – you can define related to the event (activity) attributes.
  • Total conditions – could be a count of activities, Total, MIN, or MAX conditions. E.g., to segment users who made a “Total” bet amount above 1000 EUR.
  • Update schedule – define a schedule for when the segment will be rebuilt.

To make your segment even more precise, you can also add a user state condition like brand, registration country, language, etc.

Behavioral segments, like other segments, can be exported and have a scheduled export if needed. 

This type of segment can be used in any context in CRM Automation or Gamification modules:

  • To limit Real-time and Scheduled campaigns
  • To limit Automation rules
  • To limit the visibility of Tournaments, Store items, and Mini-games

In addition, provides state-of-the-art Gamification and CRM automation software solutions. Its CRM tool combines player analytics data with machine-learning algorithms to help sports betting and iGaming businesses have a deeper understanding of players and their needs while also providing valuable data insights to ensure retention and loyalty, and much more.

As a leading Gamification & CRM Automation solution, Smartico offers:

  • Various intuitive challenges and gaming techniques.
  • High-value incentives that encourage long-term loyalty and retention, elevate player value, strengthen engagement, and boost user acquisition.
  • Multi-Currency/Language/Deep Brand Support.
  • Missions – Engage players with fun real-time solo or multiplayer tasks.
  • Points – Encourage players to keep coming back through point-based incentives and unlockables.
  • Badges – Stand out from the rest with sleek badges and earn free spins for each earned badge.
  • Levels – Players gain experience and special perks after each successful level or tournament completion.
  • Incentives – Motivate players to come back for more with unique rewards and bonuses. 
  • Marketplace – Players can actualize their points by cashing them in for free game spins or other awards, such as online shopping vouchers. 
  • Mini-Games – Players can reset their senses through short, award-earning games.
  • Tournaments – Set your own qualification rules and offer your customers a powerful endorphin rush with Smartico’s special tournament system.
  • Leaderboards – Set daily, weekly, and monthly prizes and watch your user engagement skyrocket.
  • Bonus Engine Integration – Cash bonuses, free spin bonuses, and more.

And that’s just a small sample of what’s on offer. Smartico can help your business grow exponentially by supplying the solutions needed to bring the motivation in your company to a whole new level. Book your free in-depth demo today at: 


Customer Behavior Models are the customer’s response toward a product. It can be one person or a group of people, or even society at large, who decide on the response. Even though the customers’ purchasing behavior doesn’t always depend on their needs, it is a vitally important aspect of marketing, and the models we covered in this article are clear evidence of that. 

We hope this article was helpful to you and you now have a better understanding of what a customer behavior model is, how it affects marketing decisions, and how to use it to your advantage.

The team wishes you the best of luck on your professional journey forward. 


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