To execute their work correctly, marketers must first understand who their customers are, what they want, and what motivates them to buy. If it sounds a little like psychology, these methods are founded on psychological theories and are referred to as marketing psychology.
While marketers are not psychologists, they regularly use various psychological insights about human behaviour to interact effectively with potential customers and enhance conversions.
We shall explore the definition of marketing psychology, five key concepts, and practical applications of these concepts in this article.
Marketing psychology has been roughly defined as “incorporating a variety of psychological elements into your content, marketing, and sales approach.” Further, you can consider marketing psychology as a means to seek patterns in individuals and assess how this relates to their purchasing decisions.
Five commonly used marketing psychology principles
1. Reciprocity Principle: This approach is based on the idea that if a brand does something nice for you, you are more likely to reciprocate and cooperate with them in the future.
The Reciprocity Principle holds that to receive sales as a brand or business, you must first give to the client because psychologists feel that if someone (or in this case, a brand) has done something for them first, humans are more likely to return the favour or improve their cooperation levels.
You establish a new relationship with your followers or new customers by providing more value.
How to implement this theory in your marketing strategy:
In a world where many firms are already investing in digital marketing in some form, you are already employing components of the reciprocity principle. Whether giving free material on your blog, inspiring quotes on Instagram, or keeping in touch with your consumers once a month through a helpful and curated newsletter, these services add value to your core product or service offering.
2. Information-Gap Theory: According to this notion, When someone discovers a knowledge gap in a topic of interest, they will take action to learn what they need to know.
George Loewenstein, a behavioural economist, asserts that curiosity arises when we sense a knowledge deficit. So to “remove the feeling of deprivation,” we look for the missing knowledge.
How you can use the Information-Gap Principle:
Marketers frequently use the Information-Gap Theory in content and social media marketing. The theory is evident in the way publishers construct inquiries in their headlines. For example, you’ve probably seen headlines that begin with “How To…”, “The Secret Trick To…”, or even “The One Hack..” These headlines grab our interest and make us want to click on the content to learn more.
3. The Scarcity Theory: According to this theory, people place a higher value on items they perceive to be rare and a lesser value on those that are simple to obtain.
Psychologists contend that people value goods that are more difficult to get. Because it “orients the mind instinctively and powerfully toward unfulfilled desires,” says Shahram Heshmat, a behavioural scientist, we might think positively about scarcity. However, when businesses use scarcity marketing, customers worry they’ll miss out on the deals and lose their freedom of choice.
How to use the Scarcity theory:
Black Friday: Black Friday was first used to refer to deals that happened the day after Thanksgiving. However, it’s quickly gaining traction as a global trend that draws shoppers worldwide. Particularly during the holiday shopping season, businesses have for years successfully created a sense of scarcity around heavily discounted, popular products, resulting in bare shelves.
4. Social Proof Theory: This notion is based on the reality that people trust products more when they know individuals who can authenticate their worth.
According to Robert Cialdini, a psychology and marketing professor and the author of Influence: The Psychology of Persuasion, when people are unsure of what to do, they seek advice from those around them.
Social proof marketing goes beyond basic word of mouth. Instead, it uses the persuasive skills of experts, celebrities, and user reviews to boost our trust in the product or service. And the digital era has increased the potential of Social Proof Marketing to new heights.
Several ways to use the social proof theory:
- Make use of professionals. Experts have devoted countless hours to developing their craft and being recognised as authorities in their industries. Consequently, whenever they advertise or are seen.
- Regarding a product, followers with that precise need are more inclined to listen to their recommendations. Two examples of expert social proofing are hosting a live Q&A on your Facebook page or having the expert publish a guest post on your blog.
- Obtain the endorsement of a celebrity for your goods. Celebrities and social media influencers significantly impact the popularity of your product or service among their sizable fan bases. Many businesses use endorsements, such as getting A-list celebrities to participate in a campaign or just showing your product to an influencer who has sway over the audience you want to attract and hopes they would post about it on social media.
5. Loss Aversion Marketing: According to this notion, most people would rather avoid losses than obtain benefits.
During their study on Prospect Theory, Nobel Laureates Daniel Kahneman and Amos Tversky found Loss Aversion. In brief, Daniel and Amos discovered that people seemed to place a higher value on avoiding a loss than on gaining an equivalent gain.
Think about how many “last opportunity to buy” emails you have gotten in your inbox to see how frequently marketers employ loss aversion marketing.
Although this can be a successful technique, the internet has made it so that many consumers are inundated with this type of marketing; therefore, if done improperly, it can be harmful.
Some Loss Aversion Marketing strategies include:
- You are creating a limited resource. Informing clients that your product is limited-edition is one technique to persuade them to buy. Brands frequently produce a set quantity of stock and alert customers if there are only a few left when doing business online.
- You are giving a gift with a purchase. Losing a gift can frequently be a powerful reason for swaying your consumers to make a purchase they weren’t planning to make, whether it’s free delivery, a discount voucher, upon reaching a particular level of investment, or a gift wrapping.