How to use psychology in marketing

Have you ever wanted to get into your customers’ minds and figure out how they think? While mind-reading isn’t possible, understanding key principles of psychology can give you a better idea of how your customers’ minds work. You can also use psychology to take your marketing from good to amazing by building engaging campaigns that actually entice your customers.

This guide will show you how to use psychology in marketing in the following ways:

• Reciprocity principle
• Anchoring
• Social proof
• Scarcity marketing
• Information gap theory

When thinking about how to use psychology in your marketing, you might want to consider leveraging one of these commonly used methods.

The reciprocity principle refers to the idea that to receive sales as a brand or business, you must first give to the customer. That’s because humans are more likely to return a favour or cooperate with someone that has done something for them first. 

In marketing, you can implement this principle by offering added value (on top of your product or service) to your customers. For example, you could offer a free trial when opening an account or provide insightful content on your blog. The key is to give them something of value and that inspires them to buy more from you. 

In addition, if your customers feel well looked after, they’re more likely to return the favour by spreading the word about your business to people they know. 

People tend to ‘anchor’ their opinions based on the first piece of information they receive. Anchoring is the practice of altering something to make it better than that first piece of information.

Anytime you shop online, you’ll likely come across anchoring in several places. Let’s say you want to buy a new desk chair for your office and you’ve seen a great one that costs £120. But when you visit the site again, the price has been reduced to £80, which feels like a bargain compared to the previous price.

Anchoring is an important tactic to know, especially if you ever want to run a sale. The best way to use anchoring is to display the original price next to the new reduced one. This will anchor the more expensive price in customers’ minds. You can even add the percentage customers will save with the sale to further increase the odds of a purchase. 

If you’re not familiar with the term, social proof is the principle that people tend to adopt the beliefs or actions of those they like and trust. That’s why brands collaborate with celebrities and influencers to boost their sales. 

One great way to leverage social proof to bring in new business is to include testimonials from past or present customers on your website. When people see rave reviews from other people about your product or service, they’re more likely to buy from you.

When figuring out how to use psychology in marketing, you might want to consider scarcity marketing. Scarcity marketing refers to humans placing value on things that are harder to get. In other words, if consumers fear that they will miss out on what’s on offer, they are more likely to make a purchase while they still can.

Common examples of scarcity marketing include;

• Black Friday sales: what started out as a sale that took place the day after American Thanksgiving has become a global trend that attracts bargain hunters worldwide. 
• Limited product offering: by offering a product or reduced price for a limited time or items sold, you encourage customers to pay up now to avoid missing out on the deal. 
• Exclusive access: having access to something that isn’t available to others makes customers feel special, and some are happy to pay extra for it.

As the name suggests, the information gap theory refers to someone having a gap in their knowledge on a topic they care about and taking action to find out what they want to know.

In marketing, the information gap theory often manifests itself in the form of blog articles or adverts with headlines like “How to do ABC”, “What everyone should know about…”, or “The secret to XYZ is…”. These titles pique our interest and make us want to learn more about the topic. 

Although, if you take this method too far, you might create so-called clickbait. This is where the headline is designed to get people to click on it but the content fails to deliver on its promise. You avoid this by ensuring that the product, page, blog post etc. includes the information that you promise in your headline.

When starting a business, you might be tempted to try all these psychology methods at once. The more hooks you cast, the more likely you are to catch something, right? Unfortunately, marketing doesn’t work that way. 

Instead, you’ll have much better luck by focusing your efforts on methods that your customers are likely to respond to. The best way to pick your methods is to consider how your business and industry work and look at the data you have about your customers. After all, people want different things from different brands. For example, a clothing brand will likely benefit more from anchoring or scarcity marketing than a nursery business might. 

By leveraging psychology effectively in your marketing, you can get your brand noticed by more people and define the most effective ways to communicate with customers. 

As a business owner, creating a budget for your marketing will help you determine which efforts you can afford to invest in. That’s where a system like Countingup can come in handy. 

Countingup is packed full of features designed to make managing your business finances easy and efficient. This unique two-in-one business current account and accounting software empowers you to manage all your financial data in one simple app. 

You get easy access to crucial insights about your spending, income, cash flow, and taxes with just a few taps on your phone. That way, you can determine exactly how much you can allocate to your marketing campaigns and track your business’ overall performance.

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