The British Psychological Society defines psychology as: “the scientific study of the mind and how it dictates and influences our behaviour...”. So, let’s apply that to marketing.
Marketing is essentially the art of being able to change someone’s mind, in a way that is going to benefit you, your brand, or your business. Understanding the psychological drivers rooted in our decision-making is paramount in being able to develop, tempting, irresistible, eye-catching ads and content that’s going to turn those leads into conversions.
Before we dive deeper into the world of psychology, let’s cover the basics.
The 4 Ps of marketing
You’ve probably heard of these before, but we’ll go over it anyway. The ‘4 P’s of marketing’ (introduced into education in the 1960s by E. Jerome McCarthy) are the bones of marketing strategy. Imagine the Ps as pillars that stop the roof from falling in. If one is weak, there’s much more pressure on the others to take the strain. Or even worse, the roof might fall in all together.
So, what are the 4 Ps?
- Product – This is what you are selling, your product. This doesn’t have to be a physical item, like a car for instance. It could also be a (but not limited to) service, agency, or consultancy.
- Price – How much are you going to charge people for the product you are offering? It’s important to make sure that the price aligns with the product because if you have the right product but an unaffordable price, it’s going to be much harder to sell.
- Place – Where are you going to sell your product? Where does your target audience frequent? You need to make sure that it is easy to find what you have to sell.
- Promotion – This is where psychology comes into play. How are you going to advertise your product? What strategies will you utilise to make it a success?
Now, do your 4 Ps synergise? Do you have the right product, at the right price, in the right place, with the right promotion?
The extended marketing mix - 3 more Ps
(for those of you that can’t get enough)
In the 1980’s it was decided that the 4 Ps should be updated to 7 by the iconic duo – Booms and Binter. This formed the extended marketing mix.
- People – The people that you employ. The people on your team are incredibly important, a good team behind a product or service you are offering is just as important as the product itself.
- Processes – This is the process in which the product is delivered to the customer.
- Physical evidence – This is the physical aspect of the product or service. People like to see what they are buying, even if your product or service isn’t inherently physical itself. If not a physical product, think PDFs or content created. Anything that you can provide to your client as evidence of the job you are doing.
Isn’t it handy that the key principles of marketing all start with P?
Now that’s all covered, let’s dive into the psychology.
Anchoring is a cognitive bias that influences what we think of a product when compared to something else. It can be done in a number of ways. One prolific method I can guarantee you will have seen everywhere is when discounted prices. Showing the initial price crossed out, providing the new price next to it. It uses the higher price point as the anchor, then shows you the new, shiny, lower price to show you how much of a good deal you are getting. Irresistible, right?
Exclusivity scarcity and urgency scarcity
Exclusive, limited-run products appeal to customers. If you indicate that something is rare, people jump to the conclusion that this means it holds more value. Showing the products as exclusive implies that they will not be running forever, and you need to buy quickly before it’s gone. This sense of urgency generated will encourage the customer to convert.
Urgency scarcity is like exclusivity scarcity. You stimulate the thought that someone could get the product before you, or state that there is only X number left at this price.
A way of explaining this psychologically, is that the lack of choice, or fewer chances to buy, is a threat to our freedom. In order to mitigate this threat, you buy. You get the item before someone else does, meaning that you have retained control.
Social proof is the reasoning behind why we do a lot of the things that we do. It’s because other people are doing it. Similar to the bandwagon effect. When someone sees something going down well with other people, they will want in on the action. You can demonstrate social proof using reviews, showing bestsellers, as well as using influencer marketing.
No, not that Halo.
The halo effect is something positive that a brand does influences perceptions in other areas. Let’s use TOMS as an example. Not only do they donate a third of profits to grassroots community organisations, but they also donate a pair of shoes to a child in need for every pair that’s bought. Isn’t that nice? Knowing this improves your perception of the brand, therefore means you might be more susceptible to buying from them next time you need a pair of shoes.
Imagine you’re a gardener. The other week, someone gave you a really helpful tool which means you can water your plants 10x faster, which in turn made your life 10x easier. The person that gave you the magic watering tool now wants to take it back, but they say you can keep it for £5 a month. It’s brought you so much value it wouldn’t make sense to have to give it back, so you pay £5. This is loss aversion.
The psychological pain of losing something is greater than the joy of receiving something. This is why companies offer a month's free trial. You have the product for a month and they are banking on you not wanting to give up, so you pay the monthly fee to keep it in your life.
These are only a few examples of the myriad of ways that marketers tap into the complexities of our cognitive makeup in order to sell us products. Now you’ve seen them, we bet you’ll see them everywhere. But now, you’ll be able to utilise them in your own campaigns too.