A profound understanding of customer behaviour lies at the core of every successful marketing campaign. Imagine being able to peek behind the curtain and understand not just what your consumers do, but why they do it. It’s like having a secret map that guides you through the intricate pathways of consumer choices and inclinations. Armed with these insights, a marketer can build strategies that are not just effective, but also remarkably precise.
A deeper understanding of behavioural psychology is hence the key to attracting, influencing, and nurturing lasting relationships with a variety of audiences. Let’s dive into a set of fundamental psychological concepts that marketers can harness.
Social Proof
There is a reason why 75 per cent of consumers regularly check online reviews before buying local services. Social proof revolves around the idea that people tend to imitate the actions and beliefs of others, especially when uncertain. After all, it’s human nature to seek validation from peers — which marketers leverage by positioning it as trust in their products.
Customer testimonials, social media endorsements, and share-supported features all harness social proof by highlighting satisfied customers and offering relatable experiences that enhance conversion rates. Getting endorsements or comments from prominent brands can also build trust. Peloton, for instance, leverages endorsements from Good Housekeeping, Forbes, and Best Health to enhance its brand credibility and social proof. Closer home Swiggy and Uber have consistently leveraged this tactic to great success.
Halo Effect
The 'halo effect' is another powerful cognitive bias where a positive perception of one aspect influences overall impressions. This bias, seen in various studies, demonstrates that people struggle to separate holistic impressions from individual characteristics.
Marketers can use this to create a favourable brand image, loyalty and equity. For example, new businesses can strategically position themselves near established premium brands to boost perceived value. If a new luxury retail brand were to open next to an iconic, established brand like Gucci on New Bond Street or Prada on Fifth Avenue, it’d immediately benefit from the association and proximity.
Another way to leverage the halo effect is to align with positive images or associations. A prime example is Nike's famed partnership with Michael Jordan, which significantly enhanced Nike's brand image and similar association with popular figures or high-status entities has frequently been shown to elevate one's own reputation and appeal.
Anchoring Effect
Anchoring is a clever pricing strategy that involves listing the most expensive item first. If you spot a pair worth $350 when shopping for sunglasses, followed by $150 and $70 options, the $300 pair seems too expensive and the $70 pair might seem inadequate. Your choice may then gravitate towards the $150 par which in contrast appears just right. Known as the Centrestage Effect, the tactic highlights potential savings and makes mid-range options more appealing. It’s especially effective for subscription services and limited-time offers like festive or Black Friday deals.
Labour Illusion
Steve Jobs often emphasised the intensive effort behind Apple's products, enhancing their perceived worth. In one instance, he started with, “Take a look at the number of cars in the Apple parking lot during weekends.”
Such a ‘labour illusion’ suggests that consumers value products and services way more when they see reasons to believe that significant effort may have gone into creating any product. Marketers may leverage this by highlighting the time, skill, and dedication that went into producing the item, showcasing the hard work of expert craftsmen, or the extensive development process that highlights the value of the product. It also helps businesses connect with customers on a deeper psychological level, increasing interest and willingness to pay. This approach not only boosts perceived value, it also drives revenue growth by creating excitement and demand around the effort invested in the product.
Avoiding Loss
‘Loss aversion’ is a powerful psychological principle that’s based on the sentiment that losing feels worse compared to the feel-good factor that comes with winning. Marketers use it to prompt consumer action by emphasising what people might miss out on, rather than what they could gain. Ecommerce sites often feature time-sensitive offers to tap into this behaviour, encouraging quick purchases to avoid missing out.
Brands like Tata Group's Croma and low-cost airlines like Air Arabia, Air Asia et al, effectively utilise this strategy through early bird sales to attract more customers and drive immediate actions by highlighting the risk of missing great deals.
Psychology Of Partial Ownership
Partial ownership is rooted in theories of ownership and attachment, creating an initial bond between consumers and a product or service, creating a habit through experience and value that makes it harder to disengage.
Brands can nurture this bond through trial periods, flexible return policies, or by involving customers in the development process. Free trials by companies like Spotify and Amazon Prime exemplify this principle, effectively encouraging long-term commitment by removing initial barriers to entry. By making consumers feel invested from the start, brands also build stronger, lasting relationships, while giving customers a taste of ownership before any financial commitment.
Using persuasive techniques based on psychological theories is supremely helpful in developing new campaigns and marketing ideas, customising marketing strategies to suit a variety of audience types and needs, and improving the overall user experience.
A word of caution, though - businesses only thrive when persuasion is employed responsibly. It mustn’t be about manipulating or coercing the audience. Instead, use it to personalise/customise your narrative, and direct it to construct authentic connections, value, and solutions that genuinely benefit your consumers.
