How you can influence your customers to buy by using marketing psychology.
As a business owner, we all want to know what makes our customers tick. Why do they choose some products over others? How can you influence them to purchase from you instead of someone else? The answers lie in marketing psychology.
Knowledge of how basic psychology affects the way customers choose and buy products can give you really valuable insights. By finding out why people make purchases, you are better prepared to create marketing campaigns that convert and increase sales. There are 6 key marketing psychology principles that apply:
1 – Social Proof
The principle of social proof is that people make decisions based on the behaviour of others. But how does this relate to marketing?
People are more likely to buy from a company when they see other people using and enjoying products from that company. Things like positive reviews, lots of active users, and positive customer generated content all make it more likely that a potential customer will buy from you.
Using social proof for your brand or product is particularly helpful for attracting new customers.
This is because in most cases your new or potential customers have no personal experience with your product yet. Instead, they turn to the thoughts and reviews of existing customers to find out about their experiences. Research has repeatedly shown that consumers believe what other consumers say about products more than they believe what you say about your own business.
One of the easiest ways to leverage social proof is super simple – just ask people to leave you a review!
This can be on Facebook, Google, Trust Pilot or any of the other review sites. You could also then share that review on your social media pages. Trust signals such as memberships, accreditations and awards featured on your website and other collateral also help to influence customers to buy.
A referral programme is another great way to encourage current customers to spread the word about your product or service. If someone is recommended to you by a friend or family member, whose judgement they value then they will be much more inclined to come to you first.
2 – Scarcity
Rare items are valuable. Think about precious gems, or limited editions—their scarcity makes them worth more and this is the scarcity principle in action.
This psychological principle states that if there is a perceived shortage then people will place a higher value on it. And it goes beyond precious stones. One study even found that people rated identical chocolate chip cookies more highly when there were fewer cookies available!
If you apply this to your marketing then this principle means that consumers are more likely to buy something or pay more for it if they think that it is in short supply.
This also taps into the fear off missing out (FoMo).
We’ve all been there at some stage worried that we will miss out on a product or something that may be gone soon. Scarcity creates a sense of urgency and this encourages impulse purchasing.
How to create a sense of scarcity? If you launch any offers then make sure to have an end date or run temporary offers, or have limited numbers available. In your marketing, include words like “while supplies last” or “only one more day” or “for one week only” to let customers know they will miss out if they do not make a purchase soon. If you don’t use an end date, then there is no impetus to buy now.
3 – Reciprocity or mutual benefit/giving back
If someone gives you a gift, nine times out of ten you feel compelled to give them something in return; or you feel guilty if you haven’t given them anything. In psychology, this is called reciprocity.
In marketing, reciprocity means consumers often feel somewhat indebted to a company if the business gives them something for free.
Say, for example, a company asks you to complete a survey, and they include with the survey a free gift. Because the company has given you a gift, you will likely feel obliged to fill out and return the survey.
4 – Loss Aversion
As its name suggests, people would much rather avoid a loss than they would gain something of equivalent value.
For example, we are more upset over losing £50 than we are happy about finding £50. Why is this? One reason is that emotions associated with loss such as anxiety and fear are negative emotions. Negative emotions are proven to have a more lasting impact on people than positive emotions.
To use this loss aversion principle, you need to make your customers think that they may lose something they already have.
For example, if you offer free trials, remind the consumer of what they will be losing as the free trial comes to an end. Or if you offer free delivery above a certain price, if the customer gets to the checkout without reaching the required total for free delivery, show them the amount they will lose to delivery costs compared with the amount they need to add to their shopping basket for free delivery.
5 – Anchoring Bias
Anchoring bias is a principle that tells us that our decision-making is heavily influenced by the first piece of information we get that’s related to that decision.
In terms of marketing, this means that customers evaluate products or services based on the first information they receive.
Let’s say a consumer goes to one shop and sees a pair of shoes priced at £200, but the same shoes are £100 in another shop. The £100 shoes now look like a good deal, even if the person might not normally pay £100 for shoes.
You can take advantage of this in your own marketing by displaying original prices alongside reduced prices during sales. The original price becomes a reference point (an anchor) for the customer, making the sale price seem like a better deal than if the low price were shown by itself.
6 – The Decoy Effect
The decoy effect is almost exclusive to marketing psychology.
This principle recognises the systematic ways in which the context and framing of information influences people’s judgment and decision-making.
So for example, if you have a range of packages available when you introduce a third, less attractive option the more expensive package seems like a better deal than when there are only two products to choose from.
When there are only two options, consumers directly compare the price and quality of the products. The third option changes the customer’s mental picture of the available products and makes it more likely that they will choose the more expensive option.
An American professor of psychology and behavioural economics tested this phenomenon with his students where he asked them to choose a subscription. The results were:
- Web Subscription – $59 (16 students)
- Print Subscription – $125 (0 students)
- Web and Print Subscription – $125 (84 students)
Total revenue: $11,444
The majority of students selected the third option (dominating) and none of them selected the second option (the decoy). Knowing this, he then performed a second test and removed the decoy product. The results were:
- Web Subscription – $59 (68 students)
- Web and Print Subscription – $125 (32 students)
Total revenue: $8,012
You can use the decoy effect in your marketing by grouping items into sets of three instead of two, with one option serving as the decoy.
Influence your Customers to Buy From You with Marketing Psychology
By incorporating psychology into your marketing, you can influence your customers to positively view your products and your company. By using the principles of social proof, reciprocity, and more you will be more likely to influence your consumers’ purchasing decisions and encourage more sales.
For advice on tactics and strategies you can use to make your marketing more effective let’s have a chat. Book a Call here.