8 Psychological Principles to Boost Your Marketing Efforts
Marketing without considering your customer's psychology is like steering a ship without a compass. You may move, but you won't know if you're heading in the right direction.
In this article, we'll explore how you can leverage psychology to boost your marketing efforts. From social proof to the scarcity effect, we'll provide actionable tips and real-world examples to help you develop more effective marketing campaigns.
What Does Psychology Have to Do with Marketing?
But first, why does psychology matter in marketing? It's simple: people buy from people, not from businesses. And people are driven by emotions, biases, desires, and fears. So to be successful in marketing, you have to tap into those emotions to connect with your target audience.
Think about the last time you made a purchase. Did you make a totally rational decision, or did your emotions come into play? Maybe you felt called to a brand because of its values. Perhaps you were convinced by a persuasive landing page or sales pitch. Either way, whether you knew it or not at the time, you were likely influenced by psychological factors and principles.
8 Must-Know Psychological Principles (and How to Employ Them)
Thankfully, you don't have to be a psychologist to utilize psychological principles in marketing. You just have to know what they are and how to employ them.
1. The Scarcity Effect
The scarcity effect is one of the most common psychology principles used in marketing and sales. It's a cognitive bias that makes people put a higher value on something scarce versus something abundantly available.
In other words, people want something more if there's less of it. Some examples of scarcity marketing include:
- Displaying low stock availability ("Only 5 left!")
- Offering deals inside a limited timeframe ("Only available for 3 more hours!")
- Giving one-time only deals ("One-time discount")
- Offering exclusive access ("Only 6 VIP spots!")
To use the scarcity effect in your marketing initiatives, try limiting quantities and timelines, or add exclusivity to your offers.
2. The Paradox of Choice
You might feel compelled to offer your customers plenty of choices. However, according to psychologist Barry Schwartz, that might be one of the worst things you can do. The paradox of choice says that people who are given too many choices suffer from a bit of option paralysis.
In other words, with too many options, people find it harder to make decisions and feel good about the decision after they've made it. As a result, sometimes it's better to market fewer options to keep things simple.
3. Social Proof
Social proof is the idea that we're more likely to purchase a product if others do. That's because when you see a product or service with tons of positive reviews, you're more likely to trust that it's a good choice. It's why influencers and user-generated content (UGC) are often used in advertising.
Social proof often gives you that little nudge you need to buy. In fact, social proof is such a powerful psychological tool that recent research shows:
- Websites with testimonials get 45% more traffic than websites without.
- Displaying reviews can increase conversions by 380%.
- 92% of consumers look at reviews before purchasing.
The short and fast here is that social proof is super important. You can check out our guide to getting social proof for your business here.
4. Anchoring Bias
As humans, we tend to prefer whatever information we hear first and use it to inform our decision-making. This is called an anchoring bias.
For example, let's say your favorite clothing store offers a sale on sweaters. Generally, the sweaters cost $100, but they're on sale for $75. You're ecstatic, but your friend, who usually purchases her sweaters from another store, is unimpressed. She usually purchases her sweaters at $50 full price. In this case, your friend probably thinks you're getting ripped off, and you probably think your friend buys low-quality clothes. However, you're both basing this information on the information you've anchored yourself to. This is the anchoring bias in a nutshell.
As a marketer and business owner, you can use this bias to your advantage in several ways. One of the easiest ways is to show your potential customers your products or services at a higher price point first, so they're anchored to that value, and then present them with the same or similar product at a lower price point. They'll feel like they're getting a great deal because they perceive the value as the initial price point they saw.
5. Color Psychology
There's an entire branch of science dedicated to color. From color theory to color psychology, colors greatly affect our perception and feelings. As a result, you can use colors to help your audiences better understand your brand or products.
Here are some popular colors and their psychological effects:
- Red: Excitement, passion, urgency, and appetite stimulation
- Blue: Trustworthiness, reliability, calmness, and productivity
- Green: Health, growth, peacefulness, and wealth
- Yellow: Cheerfulness, optimism, playfulness, and attention-grabbing
- Orange: Enthusiasm, creativity, warmth, and urgency
- Purple: Royalty, luxury, spirituality, and creativity
- Black: Sophistication, elegance, power, and formality
- White: Purity, simplicity, cleanliness, and safety
- Gray: Neutrality, practicality, and timelessness
- Pink: Femininity, romance, and nurturing
Of course, each of these associations can mean different things depending on cultural and personal aspects. So, keep that in mind as you use colors in your own marketing initiatives. (If you want to take a deeper dive into color psychology, Color Psychology is a terrific resource).
6. The Principle of Reciprocity
The principle of reciprocity is a basic social rule whereby people feel obligated to give back whatever they receive. In other words, if someone scratches your back, you feel compelled to scratch theirs.
When it comes to marketing, you can use this principle to your advantage. Offering something valuable upfront can motivate your prospects to give you something back. For example:
- A free eBook or downloadable in exchange for an email
- A coupon in exchange for a purchase
- A discount in exchange for a like on social media
Get creative in finding ways to give your prospects something first, and they'll feel inclined to give you something of equal value back.
7. Loss Aversion
We really hate losing things. Loss aversion is a cognitive bias where people find the pain of losing something twice as strong as the pleasure of gaining something new. It's part of the reason we stay in bad relationships or stick it out at terrible jobs. We're afraid of losing the things we've worked for – even if it means that there might be something better on the other side.
There are two ways to use this bias to form your marketing initiatives:
- You can play into the FOMO by making prospects feel like they're losing something by not acting now – i.e., limited-time offers, limited availability, one-time-only, etc.
- Or, you can comfort the fear of loss with things like money-back guarantees or free trials.
In either scenario, you're using a powerful bias to persuade your prospects to take the action you want them to take.
8. The Decoy Effect
Have you noticed that when you go to software websites and look at their pricing options, there are usually three different choices? There's a reason for that. The decoy bias shows that when we are choosing from two options, the addition of a third, less attractive option (aka, the decoy) can alter our perception of the initial two options.
For example, let's say you were going to purchase a drink at the movies. The options are small, medium, and large. You're thirsty, so you think you'll probably get a medium. However, when you get up to the counter, you see that the small costs $2, the medium costs $3.75, and the large costs $4. You don't really want a large drink, but you buy it anyway because it's a better deal than a medium drink. In this example, the medium drink is the decoy.
You can use this effect in a couple of ways:
- Introduce a decoy option that's less appealing but priced similarly to the main product you want to sell (like the drink analogy above).
- Introduce a higher-priced option that seems overpriced, so your mid-range option can appear like a better value. In this option, you aren't steering prospects toward a higher price point but instead guiding them to your middle-tiered price point.
You don't want to make the decoy product or service too unappealing, though, because that may deter customers altogether. So, use it thoughtfully to nudge your leads where you want them to go.
Start Using Psychology to Increase Your Conversions
You don't have to be an expert in psychology to use psychological principles to your advantage. Knowing how top marketers use psychological effects in their campaigns is a terrific way to start understanding how to use them in your own campaigns.
Ultimately, marketing aims to persuade people to take a desired action, and the easiest way to do that is to connect with and leverage peoples' emotions and biases. While it might seem a little unorthodox, the best marketers at the biggest companies are already doing it – so you should be, too!