How To Use Psychology in Marketing – A Guide

What is marketing psychology?

Marketing Psychology is the psychology of how people think and process information. This knowledge might reveal opportunities to trigger positive emotional reactions for your potential customers.

This post will provide an overview of marketing psychology and how to apply it to yourself. We give you a look at the 7 most common marketing principles and how to use them to reach potential customers and achieve an effective marketing strategy.

How to use psychology to your advantage?

In marketing, it is important to understand consumer behavior. Understanding how people use information will help distinguish good marketing from great marketing.

If you want to learn more, here’s a dedicated article on consumer behavior.

One of the most important things you should understand about your customers is that they are just like you. They have worries, goals, and feelings. The key to using psychology to your advantage in marketing is to know how people are thinking and what they are feeling.

Many successful marketers use psychological principles to attract people. Smart, competent marketers, use consumer psychology legally, ethically, and respectfully to draw and attract customers and generate revenue.

The trick is to get your target consumers to consider you differently. Sometimes a good brand story is necessary to produce. Sometimes it means getting people to be more compliant and make little commitments before you share your plan.

To help you attract, persuade, and convert more of your marketing prospects, here are some lessons you can learn from psychology.

Marketing Psychology Effect #1 – Social Proof

Social proof is one of the principles of influence as described by Robert Cialdini in his groundbreaking book. It is sometimes called social influence. It works on the principle that an undecided individual makes the same decision as to the majority of the group.

Social proof of rightness works particularly strongly when the people we observe have authority, are well-known, respected, or are perceived as people who cannot be wrong.

Positive reviews, high numbers of active users on Facebook and UGC help boost the likelihood that potential customers will buy from your brand.

Also, referrals from influencers, numerical data such as the number of fans, logos of famous brands with which the audience identifies, and expert opinion have a huge impact on increasing the value of the product or service.

Lush is a cosmetic manufacturer that used Twitter to attract customers to share photos of their products using. It helped engage consumers to respond to a follow-up post which increased Lush’s social media reach through social proof.

To discover how social proof can improve your marketing strategy check out our article.

Marketing Psychology Effect #2 – Reciprocity

In marketing psychology, the reciprocity norm means that consumers tend to feel less indebted to a company because the company offers them for free. If providing free content is available as an e-book, a business can get contact details from prospective clients.

If you sign in for adspresso’s newsletters, advertisers receive an e-book on request for free. In the first advertisement, you see the customer should focus on the quality of service. Ask a friend’s contact information after making an offer.

When we advertise, the offer’s attention is directed toward the e-book and the value of the product. Sign-up info isn’t requested before the user clicks on it.

When the potential customer is offered a free product with high value, it can make them feel as if they are obligated. Reciprocity helps to build a relationship between consumer and producer because psychological needs are considered.

This principle is used in many ways to promote content, such as your newsletter or blog post. In marketing, reciprocity is one of the most powerful and sometimes positive principles. A product offered for free can lead to more business later.

Marketing Psychology Effect #3 – Loss Aversion

The loss aversion principle means that the person prefers to avoid the loss over the gain of the same amount. To say there is more frustration about the loss of $20 than the excitement of finding $20. To invoke loss aversion, you tell consumers that they risk losing something they already have.

This kind of marketing messages, when offering trial-free offers, remind your consumer of what they will lose with their free trial or offer free shipping after a customer’s order exceeds a certain price.

The impact of loss aversion in marketing terms was demonstrated in a study of consumer reactions to insurance policy price changes. The study found that price increases had twice the effect on driving customers away than price reductions had on attracting them.

Target combines the same tactic with online shopping. If shoppers are not meeting the minimum 35-cent mark-up amount the company is offering, they lose their offer.

Marketing Psychology Effect #4 – Anchoring Bias

The anchoring effect was discovered by Kahneman and Tversky. It is an eminently simple yet extremely effective way to manipulate a person’s judgment. It involves anchoring a person on a piece of information and their adapting the judgment process to that information. In this case, customers assess prices and products by receiving a first data set.

As part of a new strategy commissioned by JC Penney last year, the company has switched from temporary prices to “everyday low pricing.” Take advantage of this psychological principle for your own business displaying original prices alongside reduced rates during sales.

This has a great impact on the decision-making process. The initial cost becomes a reference point (an anchor) for the client makes the sale appear to be a better deal than if the low price alone was shown. The department store saw a dramatic drop in sales after the switch. When they reverted to a sales plan, sales increased once again.

A similar effect is attribute substitution. It is a psychological process in which one or more attributes influence a person’s judgment of a person or event. It occurs when a person has to judge a target attribute that is hard to comprehend and instead substitutes it with a heuristic attribute that is easier to comprehend.

Marketing Psychology Effect #5 – Scarcity

The psychological principle of scarcity says that people will put a high value on items if they perceive an acute shortage. One study showed that people rated identical chocolate chip cookies higher when fewer cookies exist.

Scarcity creates urgency, which stimulates impulse buying. The ‘limited-time offer’ theory suggests that when consumers know an item will not be available for long, they tend to act more quickly.

In your campaigns, you can include language such as “while supplies last” or “only one further day” to tell consumers they will miss out if they do not make a purchase soon.

Williams Sonoma’s marketing campaign urges customers to purchase until free shipping is still on time for Mother’s Day in order to get on-time shipping for the holiday. 

However, if you make something seem scarce that isn’t true, it can be taken as deceptive. Another twist on the scarcity principle is to create artificial difficulty in obtaining your product. For example, Apple saves a limited supply of its iPhones for customers who pre-order them online.

If you want to know more about what is scarcity marketing, you can check out this article.

Marketing Psychology Effect #6 – Engagement & Consistency

The Jet notification tells its users to be consistent with their purchases. It utilizes the Principles of Commitment & Consistency that illustrates that people feel obliged to act consistently in their commitments.

You can send emails to customers reminding them about their order history or encourage them to opt-in for email alerts, marketing campaigns, or offers. And respectfully to draw and attract customers and generate revenue.

Princeton’s study shows consistency in both visuals and experience is very important in positioning yourself among competitors. Consistent brand matters because customers need that trustworthy experience that they’ll know, see and feel the same way.

TreeHouse is a good example of consistent visuals across every platform for the company.

Your customers will immediately lose interest without variety! It works with a selection of colors, themes, or ideas all fit the needs of a brand. By being consistent, your customers will know that you post to their site very effectively and will feel like they can process you faster, which leads to less friction.

Marketing Psychology Effect #7 – Priming

Priming effect in marketing is when you use subconscious associations to make people want your product. Usually, people are not consciously aware of it, so they rarely notice it.

Without knowing, the first thing we see affects how we respond to the second. Using subtle priming techniques, your users would remember important information about your brand.

A study conducted by Naomi Mandel and Eric J. Johnson studied background designs of websites to see if they affected consumers’ products’ selections. So when you’re using priming in marketing, you’ll focus on the minor details.

They can be very effective between you selling your highest level product to people who buy on your site. It has had a few tests on it before. In the survey, participants were asked to determine one or more vehicles in a given area and compare them with two other options in the market.

A similar effect that affects consumers’ decisions is the decoy effect. It’s a psychological phenomenon in which consumers are said to have a distinct change in preference between two alternatives when simultaneously presented with a third option that is asymmetrically dominated.

The takeaway

It is always advisable to start with realizing who the customer is and analyze consumer behavior. The user would be able to make these improvements, thereby increasing brand awareness for the target potential customers. By having a good understanding of your customers’ habits and preferences, you can effectively communicate with them.

The most performant business campaigns benefit from continuous improvement and optimization. Check out more blog posts here or visit our website for more information on marketing and business psychology.