In business, marketing and advertising are two of the biggest components that can help your business to strive. Word of mouth referrals through satisfied customers are of course one of the most reliable and perhaps the highest converting ways to gain and maintain new customers. However, without an effective marketing strategy, your business is unlikely to see a significant growth in its customer reach.

Effective marketing strategies however, can vary considerably from business to business. What works wonders in one industry may not have great results in another. And even more surprisingly, marketing techniques that work for one business in a specific industry may not have any great effects in another business in the same industry. Finding the right strategies for your business has everything to do with knowing your market. And to know your market is to know your customers. Do you know what makes them tick? What do they want to buy? What about your products would influence the customers to buy? And most importantly, how can you reach your target market who are most likely to buy from you?

Fortunately for business owners and marketers, customers think in more or less predictable ways. Most of us respond in similar ways to product information in the process of receiving the information to making the decision to buy. And knowing how this process occurs in the consumer mind can be a great advantage for you to utilise in your marketing techniques.

 

Psychology in Marketing

Marketing and advertising is about connecting with people who are exposed to your business and its products, and influencing their decision to buy. While there is a whole discipline in psychology called consumer psychology that studies consumer behaviour, decision-making processes in people have been studied in cognitive psychology extensively.

Below are some of the factors that have been found to influence the decision-making processes in people, drawn from the paper, “Decision Making: Factors that Influence Decision Making, Heuristics Used, and Decision Outcomes” by Cindy Dietrich (2010). We will use this information to suggest how these factors can be used in your marketing techniques to influence customer motivation to buy. Keep in mind that the study of psychology in marketing comes with a great responsibility to use the knowledge ethically as a business owner. And if your industry has a governing body, there most likely would be a Code of Ethics which may include marketing and advertising behaviour.

 

Past Experience

Past experiences can affect future decision-making behaviour depending on whether the experience was positive or negative. People make similar decisions following a positive experience, but tend to avoid repeating mistakes following a negative experience.

How it can be relevant to your business:

People who have had a direct or indirect negative experience with your business or a business of a similar type to yours may be unlikely to make the decision to try buying again. On the other hand, people who had a positive experience with your business are likely to buy again.

How you can use this information:

If buying your products is equivalent to a mistake in the customer’s mind, try marketing techniques that can make your business and its products look like an improvement to their past experience. This means changing your marketing initiatives and product quality based on customer feedback.

 

Cognitive Biases

Cognitive biases are “thinking patterns based on observations and generalisations that may lead to memory errors, inaccurate judgments, and faulty logic.” This also includes people’s tendency to omit risky information and to only observe what they expect.

How it can be relevant to your business:

People who hold generalised (negative) views about your business or industry may be unlikely to try your products. And if they did try, they may be looking for a way to confirm their generalisations; “See, I told you it wouldn’t be suitable for me!”

How you can use this information:

Try marketing techniques and content that realign people’s expectations of your industry and product. For example, if you’re in a business selling traditionally male-oriented products, try marketing techniques that connect with the female population.

 

Escalation of Commitment

People’s decision-making processes can be influenced by the feelings of responsibility and commitment, which can also lead to making risky decisions – e.g. the decision to keep gambling due to money already spent. “[T]hat is, individuals invest larger amounts of time, money, and effort into a decision to which they feel committed”.

How it can be relevant to your business:

This could be relevant to customers’ decision to continue buying your products, if your business includes tiered products or a system that keeps customers depend on your products (e.g. online business plans, online diary schedule, photo storage, etc.). If they feel they’ve already committed too much time, energy and money into using your products, they’re likely to continue using out of necessity or in anticipation of a positive outcome.

How you can use this information:

If your business only sells one-off products, consider putting in ongoing payments and service systems that customers can rely on. If you already have such products, make your customers’ decision to continue buying and using your products a positive experience and not a forced decision stemming from dread or an effort to avoid having lost money and time.

 

Individual Difference

Age and cognitive abilities can influence decision-making. Older people experience a decline in their decision-making performance as their cognitive functions decline, and can often be overconfident in their ability to make decisions. Older people also tend to prefer fewer choices than younger adults.

How it can be relevant to your business:

It can be relevant to your potential customers based on your target market. Depending on the age groups you target, their decision-making processes could be different (e.g. young vs old) and they can respond differently to your products and advertising.

How you can use this information:

Once you identify the target market and their age groups, try marketing techniques that can help with their decision-making. For example, if you largely market to the older population, reduce the number of options available in your products and advertise simple solutions. On the other hand, when marketing to younger generations, make your products widely available with several options to choose from.

 

Belief in Personal Relevance

People are more likely to make a decision when they believe their decision matters such as in voting.

How it can be relevant to your business:

People who are exposed to your products are unlikely to notice or make a decision to either buy or not, if they don’t believe your business is relevant to them.

How you can use this information:

Make your products relevant to the customer so that making the decision to buy your product becomes a meaningful decision to make in their life. Keep this focused to your target market as your products can’t be relevant to everyone, and employing marketing strategies to connect with everyone can risk making your business seem all over the place.

 

Satisfaction and Regret

People like to make their own decisions for themselves and experience satisfaction doing so. Also, satisfaction can be experienced when people are pleased with the outcome of their decision. People also would rather have a decision made for them, than have to choose from only undesirable options. Regret is experienced retrospectively when people feel they could have made a better decision, or if they revisit the other available options and consider their potential positive outcomes.

How it can be relevant to your business:

Customers are more likely to be happy in their experience with your business if they feel like they made their own choice to choose your product out of all other options that were available to them.

How you can use this information:

Try advertising techniques that are not too “in your face” or obviously persuasive. For example, subtle changes in the words used could make a difference – e.g. “Try now” instead of “Buy now”. There also needs to be immediate and ongoing/long-term rewards in order to cater to people’s need for satisfaction. An immediate reward for buying your product could be a congratulatory statement on your website or over the phone, or an email sent to the customer to confirm that they made a good decision. Ongoing rewards will stem from your actual product and the customers’ improved quality of life due to your product. Regular but not too frequent reminders of their great decision (e.g. via email newsletters) could be a useful marketing strategy.

#Marketing is all about #psychology! Learn how you can use psychological theories to improve your marketing strategy. #business #businesstips #onlinebusiness