Ultimately, being successful at sales comes down to understanding people.
Principles of psychology provide critical insights into this area. As a business, taking principles of psychology and applying them to marketing and sales can be highly advantageous in delivering results.
These principles provide insight into how people think, how they interpret information and why they make certain decisions.
Putting this into practice for your business, whether it is in how you go about launching a product on Amazon or in your strategy for converting more site visitors into purchases, will support your current efforts exponentially in attracting more customers and driving more sales.
In this article, we look at some of the most useful marketing psychology techniques and how you can use them to boost sales for your business. If you are running an ecommerce store, combine these techniques with optimised product listings and a strong digital marketing strategy for incredible business success.
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Principles of Marketing Psychology
Foot-In-The Door Technique
The foot-in-door concept is a principle of psychology which shows that people are more likely to take an action if they have first made a smaller commitment. This has been known by psychologists for many decades: in 1966, a famous study was conducted by Freedman and Fraser based on an awareness campaign for safe driving in California. In the study, the researchers asked some residents of a neighbourhood to sign a petition on safe driving practices (a small request), while other residents in the same neighbourhood, the control group, were not contacted.
The researchers then visited all houses at a later date and asked them to put a large, ugly sign on their lawn to promote safe driving in California (a large request). They found the houses which had already been approached about signing the petition were four times more likely to agree to the sign compared to the control group. Those in another group, who had been asked to sign a petition on an entirely different issue, were still three times more likely to agree to the put up the sign compared to the control group.
This demonstrates that once people have made one commitment, they are much more likely to make a subsequent, much larger commitment. In marketing, you can apply this concept by asking customers to take a small, easy action such as signing up for a newsletter or requesting a quote before hitting them with the hard sell.
Of course, these requests do not have to follow the pattern of one small and one large request: they could be a series of multiple, gradually increasing requests. For example, you may start with asking your customer to request a quote, then later suggest they sign up for a free trial, then sell them a lower price bracket product or service, and eventually move them to a premium service. These steps could be spread out over weeks or years, eventually leading to more and more sales.
Behavioural Psychology Example
This can be seen on just about every site these days with the sales funnel windows which pop up as soon as you visit the site, or once you click through for a proposal, for more information or to sign up for a newsletter.
There are countless versions of this, such as the example below which asks visitors for more information about their business in order to send them a tailored proposal:
In-group Favouritism and Social Proof
Many of the most basic principles of behavioural psychology relate back to the fact that humans are herd animals. As social creatures, we ultimately want to be part of a group and to be accepted. Additionally, we look at others in the group as a model for our behaviours.
The principle of in-group favouritism relates to these innate needs. In-group favouritism refers to the tendency for people to view others who are most similar to them as most acceptable. Because of this, people will seek to act in the same way as others in order to be accepted.
A related concept is “social proof” – the idea that people will adopt a practice because others have approved it, and therefore it comes recommended. This could be in the form of recommendations from a friend, a post on social media or a celebrity endorsement.
Both these concepts are used in marketing when a business promotes something by virtue that many other people have also done it: such as “10,000 models sold” on advertising, counters on websites showing numbers of customers, site visitors or similar and blog or social media posts which display the number of shares. McDonald’s “over 1 million served” billboards are a very famous example of this technique in action.
Behavioural Psychology Example
A 2008 Study into environmental conservation and hotel guests demonstrated customers’ tendencies towards following the group. In the study, hotel guests were encouraged to reuse their towels in an effort to reduce water use. Different approaches were tested: asking the guests to do so in the name of environmental conservation, and telling the guests that a majority of their peers were already doing so (“75% of guests in this hotel reuse their towels”).
The study found that guests were 10-15% more likely to reuse their towels when told that others were doing so, clearly showing the effect of in-group favouritism.
Frame Gains In Relative Terms
Another principle of psychology which is highly relevant to marketing is the concept of relative versus absolute terms. People tend to think of gains and losses in relative terms – that is as a percentage or other comparison to another figure.
For marketing, this all comes down to framing. People are more likely to view a deal as favourable if it is expressed in relative terms (25% off, 50% off and so on) rather than absolute terms ($25 off). So as part of your sales and marketing, it is best to express savings and other gains for the consumer as a percentage rather than the amount.
Furthermore, this also means that people will respond better to 50% off a smaller figure for example, rather than 30% off a larger figure, even if the dollar value is the same.
Priming describes how exposure to one stimulus affects a person’s response to another stimulus. In simple terms, this is essentially like word association. When people hear one word, they will associate certain words with it.
In psychology, this is also known as the Stroop Effect. In the Stroop experiment, subjects were asked to read out the colours in the following excerpts of text:
The study found that it took participants longer to read the colours written in different coloured text. This is a very basic example of how congruent information is easier for people to process. If the information is conflicting or doesn’t match pre-existing understanding it will take longer for a person to understand it.
This is important for marketing because by presenting congruent information – that is information which makes sense with the consumer’s previous understanding – customers are more likely to understand and therefore remember details about your business. You may only have a short window of time to communicate with your customer, so the quicker they understand what you are trying to say, the quicker they will be able to form a positive opinion of your brand and ultimately make a decision to purchase your product.
Anchoring refers to the principle that people will make a decision based on the first piece of information they receive. This is related to priming: by providing someone with one piece of information this will influence the way they interpret subsequent information.
If a person does not have particular pre-existing knowledge on your product, they will look for an “anchor” as a starting point to base future decisions. For example, by providing a recommended retail price or stating a “regular” price this provides an anchor to your customer as to what a good price would be. Therefore, when you state your regular price and then a special sale price, the customer uses the first price as a guide to whether you are offering a good deal.
You can use this to boost sales when running a sale or discounts, by ensuring to always include the original price in your listings and advertising. You can also incorporate relative gains by including the percentage of the discount. Some businesses may even state “regular” prices which are higher than the rates they ever intend to sell their products and offering discounts off these prices.
People Remember Visual Information
A 2008 study showed that people have the capacity to take note of images down to a high level of detail, even when they see the image only for a short amount of time. In the study, participants had images of objects flashed at them for a short amount of time. They were then asked to select the image they had seen compared to another, similar image.
Researchers found that in over 90% of cases participants were able to select the correct image, showing that they had recalled the details which separate the similar images.
For marketing, this has obvious applications: given that consumers are so adept in taking in visual information, advertising will be more successful when it uses many images and graphics. You can use this visual information to convey information and details you want your customers to remember. It is then likely that they will recall this information later when they come to make a purchasing decision.
Behavioural Psychology Example
This technique has been used in TV advertising for years. TV ads successfully use text and graphics to convey information such as prices, discounts, time frames and phone numbers. Some advertising may seem to be crammed with more information than consumers can possibly take in. However, as the research mentioned previously shows people are able to absorb and recall a large amount of visual information.
The Baader-Meinhof Phenomenon, also known as the Frequency Illusion, is a psychological phenomenon often discussed in marketing and advertising. It refers to the effect which occurs when a consumer notices a new product or brand, and then suddenly starts to see it mentioned everywhere.
This phenomenon comes back to the idea that once you have taken note of a new word, thing or idea you will unconsciously be looking for it. In terms of marketing, this means that once a consumer becomes aware of a new product or brand they will notice other references which they come across and may not have picked up on otherwise. This then combines to make the consumer feel like this is the latest trend or the newest hot product.
This is highly useful for marketing as it means that the most difficult challenge is bringing your product or brand to the consumer’s attention in the first place. From there, they will be looking out for it, so you must have to ensure you have your strategy of marketing and advertising in place to support re-engagement, such as email lists, retargeting ads and media mentions.
Behavioural Psychology Example: Amazon Alexa
New and innovative technologies are particularly good examples of the Baader-Meinhof Phenomenon. Consider for example when Amazon first released its personal assistant device the Alexa. A consumer may have first heard of the product when a friend started talking about this innovative new concept. Then suddenly they see the product mentioned in a blog article, promoted in a post on Instagram and endorsed by a celebrity.
Through a combination of the Baader-Meinhof Phenomenon and a comprehensive, wide-ranging marketing strategy, the Alexa is now seen as the latest hot product that everyone is talking about.
Conclusion: The Psychology Of Marketing
Many principles of psychology are very useful in understanding how consumers think and why they make a decision to purchase a product, or otherwise. These principles have been applied by brands for years to improve their marketing techniques and approach to sales.
Understanding marketing psychology techniques can yield great results for any business, whether an ecommerce store, an SME or a major brand. In understanding how human psychology works, you can apply techniques which will grab consumers’ attention, make sure they remember your business and information about you, and most importantly, in the end, finalise the sale!
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