If you’re a business owner, you probably already know that marketing is essential to running a successful business. However, most people don’t realise that the art of marketing, and what the best marketing companies do, is apply the study of human behaviour – psychology.
Understanding how people operate, which is what the field of psychology attempts to do, makes it easier for you to communicate effectively with customers and help influence their buying decisions. Businesses can apply these psychological theories to create marketing messages that drive customers to make new or repeat purchases.
Here, our Marketing Consultant, Mark Roberts, looks at five of his favourite psychological theories and how they can be used in your marketing:
1. Reciprocity Theory
Reciprocity theory is based on the idea that you are more likely to return the favour if a brand does something good for you. For your company, that could be buying a product or service or simply talking about you favourably to people they know. And the more you do for them, the more loyal they will remain.
Using the reciprocity theory can be as simple as offering free content – a blog, inspirational quotes or keeping in touch regularly. These simple things can provide your customers a value above and beyond your primary service or product. There are many ways to take advantage of reciprocity; some can cost nothing. Actual “personal” touches like a handwritten note can go a long way and will only cost you a few minutes. But it’s important to remember to give away the free thing before asking for something in return!
2. Social Proof Theory
Social proof theory centres on the fact that we all trust products more when we know people have validated their worth. There are several ways that companies can do this, and what’s best for you will depend on the product or service that you are offering.
- Certification: Official accreditation with recognised bodies, health rating, Trustpilot rating, or the famous blue tick on Instagram. These things will give new customers the confidence to take the plunge and purchase.
- Using an expert: Someone who has spent time becoming an expert in their field will be seen by consumers as an authority. Their opinion and trust in your product or service will carry weight. Promoting or being associated with your product can see their followers listen to their recommendations.
- Celebrity endorsement: In today’s world of social media, stars, celebrities, and social media bloggers hold a considerable influence with their large followers. Using celebrities for a campaign or simply gifting your product to an influencer in your target market and hoping they feature it on their social media profiles.
- Good old word of mouth: Often, the best marketing is word of mouth. Whether it’s a Google review or a five-star rating on the App Store, the truth is that many soon-to-be customers use these recommendations as a guide for the actual performance of your business. Research shows that 91% of people regularly or occasionally read online reviews, and 84% trust online reviews as much as a personal recommendation.
3 Loss Aversion Theory:
Loss Aversion theory is credited to Nobel Prize-winning psychologists Daniel Kahneman and Amos Tversky. They found that once someone has something, they don’t like losing it. People seemed to value avoiding a loss more than accessing an equivalent gain. There are lots of simple ways to create this:
- Freemium products: Allowing “free” customers access to premium services for a limited period. At the end of the trial, period access is removed unless they upgrade to become a paying customer.
- Trial periods: Allowing customers to temporarily own your product allows them to feel the loss of not owning the item when the trial ends.
- Free gift with purchase: This can be a tangible item, free shipping or gift wrapping, or a discount when they spend a certain amount. The idea of losing something “free” can be a strong incentive for customers to purchase. Or convince them to buy when they were initially unsure.
4. The Scarcity Theory
Scarcity theory suggests that we place more value on what we believe is rare and more difficult to obtain. And a lower value on things that can quickly be gained. Think FOMO (fear of missing out) – applying this theory creates anxiety in a consumer’s mind that they will miss out on what’s on offer—making them commit to purchase earlier than they may have without the item’s scarcity.
- Black Friday sales: This was the name given to sales that took place the day after Thanksgiving. Similarly, in the UK, we had Boxing Day sales. Retailers use these sale events to create a sense of scarcity around highly discounted, popular products.
- Limited product offering: Simply letting customers know the remaining quantity of an item – usually at a specific price. This can be advertising only a certain amount of remaining stock or on ticketing and events websites, showing only a few seats remaining at a discount price. As a consumer, you’re likely to make a quicker decision with your purchase, knowing there is limited availability.
- Exclusive access: Think member’s early entry to sales events, VIP access to a particular service or being given extra features in a product. Brands can make their products feel premium and exclusive by doing things like this. Allowing people to feel they have access to something that isn’t readily available to others lets them feel like they have something scarce.
5. Information Gap Theory
Information Gap theory suggests that when someone has a gap in their knowledge in something they are interested in, they will do something to find out more. This theory is often used in content and social media marketing. We have all seen those “Learn how to do…”, “The secret to…”, “What you need to know about…”, all designed to excite our curiosity. And hopefully ‘click’ to learn more!
The key to using and applying this theory lies in writing in a way that sparks the reader’s curiosity. Sentences that set a goal: “how to get more people to read your blog”, and provide the solution, “using the information gap theory”, but leave a gap between the goal and the solution. It’s this spark of curiosity that will hopefully mean they continue reading, click more, and go on to do what the message was designed to create. This could be to share your content, sign up for regular information or even complete a purchase.
By learning and applying these fundamental principles of human behaviour, you can start fine-tuning your marketing messaging to help you attract, convince, and convert more people with your chosen form of marketing.
If you don’t have the time or inclination to do this yourself, outsourcing your marketing to experts like us will make real business sense! We know how to put the theories into practice, whatever your business and customer type. Please get in touch if you want more information on what we can do to help you.