Marketing Psychology and the Art of Persuasion

Every marketer and advertiser needs to know what makes their target audience tick. Why do they prefer some goods over others, and how do you persuade them to buy from you instead of someone else? Marketing psychology holds the answers.

The smartest (and most successful) marketers acknowledge that researching how basic psychological phenomena influence how people choose and buy products can provide them with valuable insights. They will be better prepared to drive sales if they understand why these people make purchases. To assist you in making the most of this information, I've researched about this fascinating subject and summarized six top marketing psychology strategies.

I'll illustrate how each of these concepts affects customer behavior and how you can use these strategies as part of a comprehensive marketing plan.

Marketing Psychology Principle #1 – Social Proof

People make decisions based on the actions of others, according to the social evidence theory. What does this have to do with marketing?

When people see other people using and loving a company's product, they are more likely to buy from that company. Positive user-generated content (UGC), high numbers of active users, and positive feedback all increase the probability that a potential customer will purchase from your company.

Using social evidence as a brand is particularly effective for attracting new customers. They don't have any personal contact with the product yet, so they ask current or previous customers for feedback. Consumers, on the other hand, consider what other consumers say about brands rather than what brands say about themselves, according to data.

Marketing Psychology Principle #2 – Scarcity

Unique items are priceless. Take into account precious gems like emeralds or rubies: their rarity boosts their value. This is how the scarcity theory works.

This psychological theory states that when there is a perceived scarcity, people put a higher value on commodities. And it's not just the precious stones. People rated similar chocolate chip cookies higher when there were fewer cookies available, according to one survey.

When it comes to marketing, the scarcity theory states that if buyers believe a product is in short supply, they are more likely to purchase it or pay more for it.

This idea plays on people's fear of missing out (FoMo).

Consumers don't want to lose out on a commodity or an opportunity that might be gone in the near future. Scarcity inculcates a sense of urgency, which leads to impulse purchases.

Marketing Psychology Principle #3 – Reciprocity

Do you feel obligated to return the favor (or at the very least feel bad if you don't) whenever someone gives you a present? This is known as the norm of reciprocity in psychology.

Consumers also feel indebted to a company if it offers them a free product, according to the reciprocity norm in marketing psychology.

Consider a gardening supplies business that gives business customers surveys and a free packet of seeds. Customers will feel obligated to complete and return the survey because the brand has given them a gift. Use this concept to collect contact information from potential customers by providing free content, such as ebooks or blogs. The first advertisement a consumer sees should highlight the benefits they will get. After they've clicked on the deal, ask for their contact details.

Marketing Psychology Principle #4 – Loss Aversion

The loss aversion principle, as its name implies, refers to people's preference for eliminating a loss over receiving an equal percentage or an amount.

We are more upset about missing $20 than we are about finding $20. Why do we behave in such a manner? Perhaps because strong anxiety and fear are associated with loss, and negative emotions have been shown to have a stronger and longer-lasting effect on people than positive emotions.

While the loss aversion and scarcity concepts seem to be identical, their emphasis differs.With scarcity, you highlight that an item seems to have a small quantity, while with loss aversion, supply is inconsequential. To induce loss aversion, you must inform the customers that they will lose something they already possess.

Conceptualize the latest ads around losses to apply this marketing psychology theory. If you give free trials, make sure to remind customers what they'll be missing when the trial period ends. For example, suppose you offer free shipping after a customer's order reaches a certain value. If they proceed to checkout without hitting the limit, show them the difference between the amount they need to add to their cart and the amount they will lose due to shipping costs.

Marketing Psychology Principle #5 – Anchoring Bias

Our decision-making is highly influenced by the first piece of information we receive that is relevant to the decision, according to the anchoring bias theorem in Marketing Psychology.

Customers judge prices and goods based on the first information they obtain, which is known as the anchoring bias in marketing.

Let's say a customer goes to one store and finds $100 jeans, but the same jeans are $50 at another. Even if the individual does not usually pay $50 for jeans, the $50 jeans seem to be a great deal. Use this psychological concept to your purpose in your own company by showing original prices alongside discounted rates during sales. The original price serves as the basis of a reference (an anchor) for the buyer, making the sale look more impressive than it would be if the low prices were shown alone.

Marketing Psychology Principle #6 – The Decoy Effect

Regardless of the fact that most of these concepts have ramifications outside of marketing, the decoy effect is almost strongly aligned with marketing psychology.

It's a cognitive bias in which adding a third, less appealing option makes a more costly product seem to be a better deal than when only two choices are available.

When customers have only two choices, they compare the price and quality of the goods directly. The third choice alters the customer's mental picture of the available products, improving the probability of them selecting the more expensive option. Assume a company provides a software package deal in which you can purchase word processing software for $100, a kit in which you can get word processing and spreadsheet software for $200, or spreadsheet software for $175. The introduction of the least appealing option—the "decoy" offer of spreadsheet software alone—increases the odds that a consumer will opt for the set.

In your ads, use the decoy effect by grouping items into sets of three instead of two, with one choice functioning as the decoy. Compare the prices of the individual elements to the total cost of the package. When advertising subscription options, National Geographic, for example, employs the decoy effect.

Influence your Customer Behavior with Marketing Psychology

You will persuade customers to think positively about your products and business by implementing psychology into your marketing.

Apply the six psychological principles in this guide to your campaigns, including social proof, reciprocity, and more, and you'll most likely influence shoppers' buying decisions and increase sales. Have you used marketing psychology concepts in your advertising? What was your experience with it? Let me know what you think in the comments!

Research and point of source for this information: Dr. Robert Cialdini's Influence: The Psychology of Persuasion and Google.