Marketing and psychology go hand in hand. As a marketer, one of your goals is to persuade and/or influence customers to purchase your product. To do this, you need to understand how your customer thinks. What do they desire and how do they make purchasing decisions? These questions, and many others, can be answered with psychological research.
Psychological influence can occur consciously or subconsciously. For example, I may consciously buy a 12-pack of Coca-Cola because the 50% markdown persuaded me. I may subconsciously buy that same 12-pack of Coca-Cola because of where it was placed in the store. Bigger brands are aware of these phenomenons and spend billions of dollars doing research and taking action. Did you know that every square foot of a grocery store is meticulously designed? Whether you are aware of this or not, your purchasing decisions have been affected. Here are a few ways grocery stores subconsciously influence your purchasing decisions:
- Produce is usually at the front of the store because it is visually appealing and has the second highest profit margin.
- Meat is the highest profit item so it is placed at the back of the store, meaning you will pass it every time you go through an aisle.
- Everyday items like milk and bread are placed at the back of the store so you have to walk through the entire store every time you need them (and maybe make a few impulse buys).
This example relates more to retail layouts, but it speaks to a bigger concept. Businesses can manipulate consumer exposure to increase their bottom lines. Big brands are already on board, but small businesses and online companies can utilize similar psychology hacks to maximize results.
Reciprocity is one of the most popular psychological influence tactics used by businesses. This concept was initially introduced by Robert Cialdini, a renowned influence psychologist, and there have been many studies to support its effectiveness.
Reciprocity simply states:
People feel obligated to give back when they receive
For some, this is just common courtesy. For others, it’s a way of repaying debts and maintaining balance in a relationship.
Another interesting aspect of reciprocity is that the exchange does not need to be equal. So, you may give your friend a 15-minute ride to work and they may feel obligated to take on a 60-minute trip to the airport next week. You may buy a fast food meal for your friend and they cover your drinks at the bar at a later point. I’m sure we can all think of situations in which we either reciprocated a favor or were the recipient of reciprocation. But, does this really work for businesses? Do people actually feel indebted to companies? The short answer is, “yes.”
The more personal you can make the business-to-customer relationship, the better, but reciprocity works in a variety of scenarios. For example, let’s say you meet a CPA at the gym who gives you occasional tax advice throughout the year. Who are you going to go to when it’s time to give Uncle Sam his cut during tax season?
Businesses take advantage of reciprocity in many ways. They may provide free samples, coupons, and free information, or they may send out gifts to prospective clients. Imagine you are considering three legal consultants for your business. You meet with all three and one of them sends you a holiday gift basket. Assuming all of the consultants are equally qualified, which are you most likely to work with?
Reciprocity has become even more common in the world of digital marketing as many companies are trying to push customers into their funnels with free incentives. Often times these come in the form of website overlay popups and sitewide calls to action. Here are some examples:
- Before you go, get our free report on the top 10 social media tactics for 2017
- Sign up now to get 10% off of your first order
- Try our awesome, life-changing product free for 30 days
- Enter your email and website for a free SEO audit
Companies want to get email leads, therefore they give something in return. Not only are these pitches more effective, but they are mutually beneficial.
So, as you try to use reciprocity, focus on what you can give to your customer to start the relationship off right. This may be information, a free service, a sample of your product, a free trial, etc.
We are all influenced by others. Even if you are an anti-establishment maverick hipster who goes against the grain, you rely on others to make decisions. Here are some examples – you decide which you are more likely to trust.
In marketing pitches:
I could go on and on, but the point is simple. We rely on the opinions of others to influence our purchasing decisions. Here are a few ways you can apply this tactic:
- Use Testimonials/Reviews
- Include “social proof” numbers in your marketing
- Reference your credibility on third party sites like BBB, Yelp, TrustPilot, etc.
- Show case studies (i.e. before/after photos, client results, etc.)
- Utilize influencer marketing
- Encourage your customers to be vocal about your brand
- Use stories in your marketing messages
Our brains are wired to desire consistency. No one wants to come off as an inconsistent hypocrite. If we say we are going to do something, we feel obligated to follow through. If we are known for supporting a cause, we want to continue supporting that cause. So, how can a marketer benefit from this?
Marketers can use micro-commitments and the “foot-in-the-door” technique to lure customers in. A micro-commitment is used to get a customer/visitor to take a small, simple action. This plays a role in the “foot-in-the-door” technique that is used to get people to commit to a smaller request before prompting them with a larger request.
Here are a few examples:
By now, I’m sure most people are familiar with the “Bounce Exchange” style overlay popups that were popularized over the last couple of years. Many of the optins have started to use a two-step process where a customer is prompted to answer a question before entering their email. This first step represents a micro-commitment.
For example, let’s say you are about to leave a site and you receive a popup that says “Do you want to start eating healthier in 2017?” The customer clicks “Yes” as most people would and is then prompted for an email address where a 10-step nutrition guide will be sent. The customer has now shown commitment to becoming healthier and in order to appear consistent they may feel inclined to enter their email and follow through.
Free Trials and Freemium Models
Imagine you are considering three different SEO analysis tools, all priced between $200-$300/month. The company has a lot of convincing to do if they want you to hand over your hard-earned cash. This may be seen as somewhat of a bottleneck in the sales process. So, why not improve the customer flow by lowering the hurdle and allowing the customers to start with a 7-day trial for $7. The customer shows the commitment of pulling out a credit card BUT they only have to spend $7 vs. the much higher full price. Of course, more work has to be done to convert that customer into a monthly subscriber, but getting the customer in the door was much easier.
There is nothing more dreadful than staring down a form with tons of fields. Imagine you were buying a TV online and you saw that you had to fill out your name, email, credit card, shipping address, and billing address. It’s overwhelming. For this reason, many companies split the checkout into multiple steps. They collect the most important information first (your name and email) and then ease you into the other steps (billing and shipping info). Once you enter a few fields, you are likely to finish the rest.
This is similar to when you underestimate how far a destination is and consider turning back. Someone usually chimes in, “Well, we’ve already come this far…”
Pricing hacks are everywhere. Think about the items at the grocery store that are ALWAYS 50% off, the weekly sales retailers send out, and the number of product prices that end in “$.99” or “.97.”
Even though we are aware of these ubiquitous strategies, our brains still process them the same way. “$19.99” looks way better than “$20.00” and “$97” seems like a much better value than “$100.”
The list of pricing hacks could go on for ages, but here are a few to get you started:
Less is more. When possible, avoid extra decimals. “$57” looks way better than “$57.00”
Round down and use 7’s and 9’s. “$27” is a much better value than “$30. “$99” is a way better value than “$100.”
Add Decoy Options to Increase Perceived Value
Let’s assume I’m selling TV’s and push the following two products:
Obviously, I want people to buy the more-expensive 60-inch model, but how do I accomplish that? Add a third product. Right now, there is a $200 gap in the price range – close the gap with a less desirable third option. Here’s how that looks:
All of a sudden, the 60-inch TV seems like a much greater value. It’s only $50 more than the 55-inch model!
This technique can be applied to digital services as well. Dan Ariely did a study where he surveyed MIT students on which pricing option they would choose if subscribing to The Economist. The choices were as follows:
- Web Only: $59
- Print and Web: $125
Only 32% of participants chose the “Print and Web” version. The prices were then manipulated as follows:
- Web Only: $59
- Print Only: $125
- Print and Web: $125
Clearly, no one in their right mind would choose the “Print Only” option, but what happened to the sales of the “Print and Web” option. This time around, 84% of participants chose the “Print and Web” version, a 52% increase attributed to the simple addition of a third less-desirable option.
Value doesn’t exist; we create it. Sometimes we dictate value based on a product’s utility and how it benefits us and other times we compare it to other products. For example, you’d have a hard time selling cupcakes for $40 each because customers know they can get a way better deal elsewhere. That said, we don’t have this sixth sense for all products. How much should a supplement that improves your memory cost? You have no idea.
Price anchoring can be used to increase perceived value. We see this all of the time with MSRP’s. Have you ever actually bought a product at the MSRP? Companies can use the MSRP as an anchor and discount the product accordingly. The same technique can be applied to smaller businesses. So, you can either sell a memory supplement at $20 or price it at $40 and always sell it at a 50% discount.
Of course, you need to be careful because consumers aren’t stupid. Your price anchoring needs to be realistic and believable.
Price as a Reflection of Quality
Absent of other valuation criteria, people will use price to gauge the quality of a product. Think your immune because you’re a diligent shopper? You’re not. If you’ve ever gone shopping for a significant other, you may have faced this dilemma. I’ll admit that I know nothing about jewelry. That said, I’d feel more comfortable buying a $100 gift than a $20 one because I associate the price with quality, as do most people. So, how can marketers use this? Price your product higher!
For example, if I am creating an online business training course, I can price the product however I want. A course is a digital product with virtually zero variable costs. That said, it’s important to think about how the perception of price can affect the perceived quality of the course. If I price the course at $27, it may seem cheap. Whereas someone like Frank Kern will sell courses for $1,000+, you assume that there are some high-value secrets in the course.
Do you think it’s just a coincidence that most “buy” buttons are bright yellow or orange? It’s not.
Every color triggers a different emotion in people. There’s a reason why lawyer’s websites aren’t smothered in shades of pink and most popular social media sites incorporate shades of blue. Colors are used to set the mood and a customer’s mood is very important when you want them to do something.
Similar to how a picture is worth a thousand words, colors can be used to define your brand. For example, a hotel site that uses darker colors like black and gray may have a “luxury” vibe, whereas another hotel site may use white and blue to give off a “value” vibe.
One thing is very important; do NOT overthink color psychology. If you spend hours split testing the color of the headline on your site that gets 1000 visitors/month, you are wasting valuable time. While this may make sense for goliath corporations, it’s not as effective for small businesses. Instead, be conscious of the basics.
Make sure colors are a) inline with your brand b) consistent and visually appealing and c) set the right mood for the desired customer behavior.
Us vs. Them Tactic
The “us vs. them” technique is a valuable copywriting tactic that can be used in a variety of marketing materials. You see this a lot in ad copy and calls to action. Here are some examples:
- 10 Things the Fast Food Industry Doesn’t Want You to Know
- The One Product That’s Putting Dentists Out of Business
- Say Goodbye to Greedy Lawyers and Hello to Pain-Free Contract Creation
This technique is effective because it introduces a controversy or problem, positions your brand on the side of the consumer, and puts your brand in the position to provide a solution.
The trick is knowing when to use it. Your pitch should hit on an existing customer pain point or introduce a realistic controversy that will resonate with people. For example, “Cream cheese companies are greedy” doesn’t really resonate with anyone because buying cream cheese is generally a painless, thoughtless process. Contrarily, “Tired of car mechanics ripping you off?” may trigger emotions within people who have had relatable experiences.
Associations can be used to piggyback off the positive sentiment of another product/place/thing/etc. Essentially, this is a form of classical conditioning and you’ll see many big brands using this tactic.
For example, beer companies always use attractive women in their ads. Men like attractive women, they start associating a particular beer with attractive women, and two minutes later they’re almost at the grocery store. Of course, this association needs to make sense. Whereas beer and women may go well together, you probably don’t want your doctor to reel you in using that tactic.
This approach doesn’t need to rely solely on our primitive desires. You can make associations at an intellectual level as well. For example, someone like Neil Patel is well-known and well-respected in the digital marketing community. If a digital marketing software used Neil’s picture on their website (with permission), you would assume they had a quality service. Your impression of Neil Patel is automatically associated with the service they are pitching. The same company could have spent hours trying to convince you of how great their service is, but a simple association speaks volumes.
Scarcity (vs. the Illusion of Scarcity)
Scarcity is a popular marketing tactic used to put pressure on customers by either limiting the amount of products available or limiting the time they are available for.
To understand this concept, just think about a basic supply/demand chart. The lower the supply, the higher the demand. We can illustrate this concept with a real-life example. When a brand new apartment building is constructed in New York city, which apartments do you think sell the fastest? Is it the ones with the best value? The views? Closest to amenities? None of the above. The penthouses go fastest because they are exclusive and limited.
When using the “scarcity” technique, marketers should avoid getting carried away with the illusion of scarcity. If customers don’t believe that a product is scarce, the whole technique is futile. If your company is promoting a sale and says there are only “10 products left” for weeks, your audience will eventually stop believing you and, ultimately, become immune to your marketing tactics.
For certain products and services, the illusion of scarcity works. For example, if the airline says that there are only 10 seats left, you aren’t going to take any chances by assuming they are toying with you. Dissimilarly, if a digital product says they are only selling 100 copies, do you really believe that they care going to kill their revenues after releasing 100 copies? While the “illusion of scarcity” tactic may work in this case, I don’t believe it’s sustainable long-term.
It’s also important to think about whether the “scarcity” technique makes sense for your product. It’s generally most effective when people have an emotional tie to the product or some type of impulse. For example, if discounted ticket pricing is only available for two days, it may incentivize customers to order sooner. Contrarily, if potatoes are only on sale for two days, I can’t say I’ll be rushing to the store.
Fill the Gap Between Actual States and Desired States
I think it’s fair to assume that most of us aspire to be better than we currently are. This isn’t to pessimistically assume that everyone is discontent with their position in life. Instead, it optimistically assumes that we are all ambitious creatures who are always looking to improve. This condition creates a gap between our actual states and our desired states.
For example, if you are looking to lose 10 pounds, your actual state is your current weight and your desired state is 10 pounds less than your current weight. The space in between those states is a gap, and that gap needs to be closed if we want to align our actual state with our desired state. So, how do we fill it? Think of closing the gap as a process of getting from Point A to Point B. In the example above, we could close the gap by dieting and exercising to lose weight. You may be wondering why this is relevant to marketers.
Marketers should be conscious of the disparity between a customer’s actual state and desired state. This allows a marketer to:
- Craft marketing messages that appeal to a customer’s desired state (i.e. “Do you want to shed some extra pounds?”)
- Use imagery that reflects a customer’s desired state (i.e. a physically fit person)
- Push products that help people reach their desired state (i.e. meal plans, fitness routines, diet products, etc.)
Another powerful element of this gap between states is that it can be widened or narrowed by external influence. This can be done by introducing a new “want,” which moves the desired state higher. It can also be done by introducing a new “problem” which moves the actual state lower.
Let’s use cars as an example and assume I’m content with my current vehicle. A company may introduce a new “want” by promoting a car that has wi-fi, Apple CarPlay, and automatic parking features. This would increase the level of my desired state. The company could also introduce a problem that I didn’t know I had by mentioning that cars that are more than five years old get significantly lower gas mileage and may cost owners hundreds of dollars more in gas every year. This would decrease the level of my actual state by telling me that I’m worse off than I thought I was.
So, how can marketers actually apply these tactics?
The first step is understanding your customers at a psychological level. What do they desire most? What problems do they have? What problems do they have that they may not know about? What do they value? Try to understand your customers the same way you understand your friends and family. Then, remember these three rules
- Lower the actual state by introducing a problem
- Raise the desired state by introducing a want
- Fill the gap with your product or service
Let’s start with a less sexy example, a dentist:
- (Lower actual state) Educate people on the risks of not going to the dentist regularly (i.e. “you increase your chances of getting a cavity by X% for every X months you skip a dentist visit)
- (Raise desired state) Show customers the value of improving their teeth (i.e. “X% of women say they are more likely to go out with a man who has a glowing white smile”)
- (Close the Gap) Make the pitch for how a dentist visit can solve the problem and close the gap (i.e. “$50 teeth whitening services –whiter teeth after one visit” or “Check ups only $30 after co-pay – leave with a healthier mouth”)
We all have to go to the dentist, so the pitch is a little bit easier. Now, let’s look at an example of need generation. Let’s assume you are trying to sell a course that teaches people how to make money online.
- (Lower actual state) Show people that they are a slave to the man and making someone else rich with their work (i.e. “Tired of having to wake up every day at 7AM, listen to your boss whine, and still struggle to pay the rent?”)
- (Raise desired state) Increase people’s ambitions by motivating them with the opportunity for a way better lifestyle (i.e. “Wouldn’t it be nice to travel the world, stay at luxurious hotel suites, and sleep in as late as you want?”)
- (Close the Gap) Make a pitch for how working at home can give you more freedom and higher income potential (i.e. “Our $27 course will show you how you can fire your boss, set your own hours, and make $2,000+ from the comfort of your own home”)