You guessed it, yes Psychology is very important in marketing, and it is absolutely necessary. When a company does not understand their target market and how to appeal to them, how are they supposed to connect to the right people? Some people tend to disregard the whole science of psychology because they feel as if it has nothing to do with business and how to market their products and services. To those who know and believe in using psychology in their, here are four ways in which you can impact your business.
Using Reciprocity to your Advantage
When most people are offered something for free, they feel as if they owe the giver of this free gift something in return. We can define this psychological action as reciprocity. In simpler terms, as Armin Falk & Urs Fischbache from the University of Zurich said, “people reward kind actions and they punish unkind ones.”
For example, in Spain it is not customary to leave tips for most services, and maybe that explains the quality of service we get from Spaniards – the same old question: what came first, “the bad service or the low tips?” In a independent case study and blog post by an Rippleout Admin, there is a perfect example of reciprocity in action.
On the flip side, in places such as America, it is almost required to tip at least 15-20%. Most of the time everyone gives a tip, but when a customer receives poor service they tend to not tip because they do not feel the need to reciprocate any type of gratitude for the poor work the server did. While it is not physically mandatory most of the time, if you leave a small tip or no tip at all, you are looked at very poorly and as a bad person, even if you just did not have the extra money on hand.
Being able to use the theory of reciprocity is important for business, especially businesses that utilize aspects of customer service. A business that has people dedicated to answer comments and questions, on platforms such as SocialSignIn, can separate themselves from the competition by shortening their response time and the quality of the help that they provide. This is important because if you, as a business, can offer a discount or promo code to someone for signing up for the email list or liking your page, then they will be more inclined to participate.
So what is the point? No matter what industry you are in, if you are able to find a way to help and do good to others then you will have a higher chances of these people reciprocating the same kind of action. This will also provide a great sense of purpose and happiness to all, because it is always nice to help somebody out.
“Start With Why”
Simon Sinek is the author of “Start with Why,” and one of the key concepts of his book is that people believe in other people and companies when they lead with their “why.” What is meant by this is that these people and companies focus on presenting why they do what they do instead of just what they do.
In a Ted Talk, Simon Sinek spoke about Apple’s why and the reason they are so successful in today’s market. As Simon explained, the message from apple was that “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user-friendly. We just happen to make great computers. Wanna buy one?” This is so much more powerful than “We make great computers. They’re beautifully designed, simple to use and user-friendly. Wanna buy one?”
In more successful processes, a salesperson does not speak the entire time about their product/service, they ask thought provoking questions so that it sells itself to their prospect. Why does this work? It works because a smart salesperson will lead their prospect on a thought track that logically and systematically presents how their product/service solves the “pain points” that the prospect has with their current vendor.
The way we market and present a product or service cannot be about all of the cool features and gadgets it has, it has to have a compelling message that draws people in. Everyone seems to have a new product today, but the companies who have a convincing “why,” that correlates to normal everyday people, will be the ones to have masses of people believing in the idea of that company.
Who do you Trust?
If you had two people, one a complete stranger and the other someone who is influential in your life, who would you trust first?
For most people, we trust those that are close to us and those that their opinions are trusted by others. This is the same for the brands we like as well. We trust certain brands to the same extent that we trust those close to us.
There was a study done by the Institute for Experimental Business Psychology at Leuphana University of Lüneburg, Germany, to see how well influencer marketing works for companies and brands. Some of the finding explained that
“about 67% of a company’s value was constituted by the brand” whereas “mere products and services are perceived as indifferent.” What this means is that people like to buy the brands that they believe they can trust based off of association.
This is part of what we know as the ‘me too’ effect. Psychologically, this often makes us want to use the same things that our peers do.
So if you, as a company, can gain an influential person in your industry to speak on your behalf, there is a good chance you will see your brand reputation start to gain more credibility.
Everyone Wants to be Special
Most people want to be able to buy something that, in their mind, sets them apart from the crowd. A lot of the time people want things that they cannot have or simply something that there is a limited quantity of.
Take the brand Supreme for example. Supreme products are extremely expensive and only a select few actually own these products, which is a large reason why so many people want to purchase the merchandise.
In a article posted on Vice, a psychologist by the name of Dr. Dimitrios Tsivrikos, explained that “We need, psychologically, to distinguish ourselves. In the past, tribes would decorate themselves with feathers or precious stones to set them apart from other tribe members and attract potential mates.”
Rare products bring more value, just as gold and diamonds do.
We can also look at Apple in the same way. It seems like everyone has either an Apple computer or Iphone, but why do so many people want these products? They want them not only to stand out, but to also be apart of a group of people so they have some sense of belonging.
Essentially, if a company can create a FOMO (Fear Of Missing Out) effect, they will be able to find more success just as companies such as Supreme and Apple have.
The key points from this reflection are that a business must be able to find a way to help others and offer them rewards; it must present its “why”; it should have fans to speak for it; and make its product or service valuable to a large demographic.