How to use Consumer Intent to Assess Demand

When entrepreneurs want to start a business or launch new products/services, they are faced with a couple of unique challenges: they have limited resources and they aren't certain there will be demand for their new products/services. One way to overcome these challenges is to measure consumer intent.

What is consumer intent?

Morwitz defines intention as "the degree to which a person resolves to act in a certain way". Intention includes the degree to which someone plans and anticipates acting a certain way. In consumer behaviour, consumer intent refers to a person's resolve to buy a product, use a service or perform a particular activity. Consumer intent is viewed as the precedent of consumer behaviour. Demand is someone's willingness and ability to purchase a product/service at a given price. Based on these two definitions it is clear to see how consumer intent could help you assess consumer demand for your product/service.

What influences consumer intent?

Research suggests the following 5 factors influence consumer intent:

• Attitudes: Attitudes are evaluative judgments. Consumers' attitudes toward a brand's products/services indirectly influence their intentions. Attitudes dictate whether a consumer likes or dislikes a company's product/service. For instance, a vegan has a 'negative' attitude toward meat-based products therefore he/she is less likely to want to buy products within that category.

• Beliefs: Beliefs are the deeply held thoughts and perspectives a person has about something. Research reveals that people may have positive attitudes towards a product/service if they believe the product/service is of high quality. Beliefs are subjective. For instance, people's beliefs about fast fashion have caused an increase in consumers' intentions to buy more sustainable fashion.

• Goals: Goals are the desired end states people want to attain. Is your product/service aligned with your target market's goals? Then consumer intent is likely to be high. For example, if an athlete believes a new pair of innovative shoes will help him/her come first place or break a world record, he/she would be willing to purchase a pair.

• Past behaviours: Past behaviours and experiences affect consumer intention. If a consumer has a positive experience or achieves a goal because of a product or service, consumer intent will increase. The opposite would be true.

• Affect: Refers to people's feelings and emotions associated with something. For instance, compelling, dynamic marketing strategies will likely influence consumers' intent to purchase a product.

How to benefit from consumer intent

Consumer intent is a powerful way to measure and predict key consumer metrics. Consumer intent helps entrepreneurs diagnose consumer satisfaction, service quality and demand. Entrepreneurs need to do the following

• Set clear objectives: Before measuring consumer intent, entrepreneurs need to have clear objectives. To do so, entrepreneurs must answer the following questions: why am I measuring consumer intent (product launch/repurchase intention/new business idea)? Which customers am I interested in getting insights from (loyal customers/new market segment/recent customers/non-consumers)? What is the ideal level of consumer intent? and what will I do after measuring consumer intent?

• Decide how you will measure consumer intent: There are three main ways to measure consumer intent. The simplest way would be a dichotomous question such as "Are you planning on buying X within the next Y days/weeks/months? Yes/ No". Secondly, entrepreneurs could measure the likelihood of a behaviour by using a 5-point Likert scale, ranging from 1=totally unlikely to 5=extremely likely, asking "How likely are you to do X?". Thirdly entrepreneurs could use probability Likert scales such as "what do you think the chances are that you will do Y?".

• Decide when to measure consumer intent: This will depend on the entrepreneurs' objectives. Nonetheless, when using consumer intent to forecast demand, a rule of thumb is not to ask consumers to predict their behaviour more than three months ahead. I believe entrepreneurs should measure consumer intent at least monthly or immediately after consumers buy their products/services.

How can we help you?

Market Insyte offers personalised market research services tailored to entrepreneurs' needs. If you would like to find out how we can add value to your entrepreneurial journey, check out our website or schedule a complimentary discovery call.