The Science Behind How We Make Decisions
There's no two ways about it: The advertising and marketing world is viewed through a skeptical lens by consumers. Not only are people tired of being bombarded by ads, they're also weary of the techniques advertisers use to persuade them to buy certain products. Simply put, with no sugar added, the purpose of marketing and advertising is to influence behavior and people are hyper aware of that. However, for companies, there can be huge benefits to understanding the psychology behind how people make decisions.
The decisions we make are heavily influenced by many factors including genetics, hormones, past experiences, our current environment, and even human evolution. So how do advertisers and marketers persuade us to buy certain products and services? There are some science backed psychological phenomenons that are instinctive in every human. Here are 11 ways you can use psychology to impact marketing:
Paradox of Choice
Have you ever cycled through cable or Netflix searching for something to watch? You come across a few things that sound interesting, but still continue to search. By the time you've made a decision, an hour has gone by and you're left wondering if you even want to watch TV. Although people like the idea of being able to choose from multiple options, when it comes down to it, we become less satisfied with our choice when we have more to choose from. Why? We become paralyzed and anxious that we're making the wrong choice. We're left with a nagging feeling that our choice could have been better.
What does this mean for your business? Keep it simple. Sometimes offering several products or services isn't ideal for your business. Make certain decisions for the customer by simplifying their choices.
Additionally, growing brand loyalty is always advised. People don’t like making choices between multiple brands, so giving them a trusted brand can help ease their decision.
Have you ever played the game where one person says a word, and the other immediately responds with the first thing that comes to mind? That is kind of how priming works. Using subtle priming techniques, brands can create websites that help their consumer remember key pieces of information and possibly influence buying behavior.
A study revealed that changing the background of a homepage on a site dictated what users spent more time looking at. Participants were told to choose between two options (Lexus and Toyota) and those who had been primed with a green background with pennies on it spent longer looking at the prices of the two cars. Those who had been primed with safety looked longer at the safety of each car.
It is important to carefully think about what you want to show on your homepage as it could affect what people look at on your website. Clearly define what makes your company different or why people should purchase from you and it will help lead to more conversions.
Have you ever been in the awkward situation of getting a gift in less value than given? Specifically in western culture, we feel the need to give back to those who give to us. Reciprocity has been at the core of persuasion techniques for a long time and for good reason. This technique doesn’t require gobs of money -- just something that gives value to your customer. It could be anything from a branded hat to your expertise on a difficult subject matter, to a handwritten thank-you note.
Over this past holiday break I was with my grandma at Sam's. I had gone back to the clothing section while she perused the store. We originally had gone there to fix my tires so we weren’t planning on buying anything. However, as you probably know, leaving Sam's or Costco without buying anything is practically impossible. Anyway, as I was looking at jackets, my grandma met me with her cart and not one but TWO blankets. I laughed and said, “Don’t you have enough blankets at home already?” She replied, “I liked the way they looked and there were a lot of people picking them up. I thought they might run out so I picked up two. I might put them back but I have them just in case.” My grandma had fallen victim to a scarcity. As we walked around the store, three people came up to us and asked us where we got our fluffy blankets. Of course, this just enhanced how much my grandma wanted those blankets.
Scarcity can have an enormous impact on what people buy and when they buy it. You've probably noticed on sites like Amazon, some products will say “only 3 left” or “low stock." This might prompt you to buy the product before they run out. Scarcity should be used specifically when a product is low in stock because of high demand. People are more likely to buy a product because of demand rather than just because there only a few left.
If you're aware of it, you will find scarcity used by many brands. Whether brands provide an exclusive membership available to the first 100 people or simply put “low stock” on their website, scarcity works. And yes, my grandmother and I did end up leaving Sam’s with two fluffy blankets.
Humans have an aversion to loss inextricably woven into their innate behaviors. Ever wonder why companies offer free trials and samples? They're not just letting you try the product, but rather, they're relying on this loss aversion. Once you have that Netflix membership, it is just too hard to give up knowing that you would lose access to hundreds of movies and shows. People don't like losing what they have -– which is why this marketer trick is one of the most effective in the book.
Loss aversion also tells companies that they should frame their discounts as “savings” rather than “gains." Generally, people will be more receptive to the word “savings” as it implies avoiding loss.
People tend to remember the past in a positive light even more than it actually was. The phenomenon is called “rosy remembering." Marketers and advertisers play on this sense of nostalgia all the time because it's a powerful way to associate brands with positive emotions. Whether it be an old commercial or packaging style companies can use many different techniques to evoke “rosy remembering”. Recently, Geico has been airing some of their old ads. Not only will they have no production fees, but they are playing on ever-so-powerful nostalgia.
Mere Exposure Effect
Mere Exposure is the psychological phenomenon in which people tend to develop a preference for things simply because they are familiar with them. Robert Zajonc is probably best known for developing the effect, however, it has been replicated in many studies. Zajonc tested items such as drawings, nonsense words, and ideographs and found that the more a person was exposed to them the more preference they had for that item. This is significant to marketing and advertising because it implies that the more a consumer is exposed to a brand or product, the more likely they are to have a positive association with it. Additionally, studies have shown that this effect is more pervasive if the brand is new to the consumer. If the consumer is already aware of the brand, inundating them with ads may have the opposite effect.
Also known as “the frequency illusion” or the “recency bias,” the Baader-Meinhof Phenomenon is when something you have recently learned about suddenly seems to appear everywhere. There are two reasons for this phenomenon. First, selective attention, which means your brain is subconsciously seeking more information on the subject. Second, confirmation bias which means every time you see something related to the subject matter, your brain tells you it’s proof the subject has gained popularity.
This is incredibly important for marketers to understand. As marketers, we have to nurture consumers into a purchase. Targeted social media ads, emails and digital ads can help consumers start seeing it “everywhere” and increase the chance of them converting.
This one doesn’t need as much explanation. Humans are a social species, and there is safety in numbers. Therefore, people are much more likely to buy something if others have “proven” that it is a good product. Social proof and conformity is so powerful that it can lead people to completely ignore obvious truths.
In 1951, Solomon Asch conducted a conformity experiment. College students were shown the lines below and were asked which of the lines (A,B or C) were the same line as in Exhibit 1. Each participant had to say their answer out loud. Clearly line A is the same length, however, Acsh set up the experiment to have confederates (people who are in on the experiment and pretend to be a participant) to intentionally say the wrong answer. Asch found that a large majority of participants followed the confederates’ wrong answers despite knowing it was not right.
If people see that others are liking and interacting with your brand, they will be more inclined to hop on the bandwagon. This is one of the reasons why it is so important to increase followers on social media and to include testimonials on your website.
If you’ve heard of Pavlov’s dogs, then you’ve heard about classical conditioning. Essentially, classical conditioning is when two stimuli are repeatedly paired to the point where the association is natural and we don’t think twice about it.
Advertisers have become increasingly effective at pairing brands with positive emotions. One of the most famous examples is Coke. In the mid-1990’s Coke positioned themselves as the “all American drink” and today they are advertising around more abstract concepts like togetherness and diversity. This is currently on the front page of their website:
Coke is using classical conditioning so that every time you think about togetherness or diversity, it triggers “Coke” in your brain. Advertisers use of classical conditioning is what can make brands and products exciting and bring more human emotion into a simple soda.
What does this mean for marketers? Weave your brand into a story that elicits strong emotions and people will listen.
The power of a good story
This is piggybacking off classical conditioning. However, telling a good story shouldn’t just be the positioning of your brand, it should also include stories woven throughout your blog posts, social media, and any other advertisements. People’s brains are seduced by stories -- the more vivid they are the more likely they are to persuade people to act.
We are bombarded day in and day out with an extraordinary amount of sensory information without the ability to process it all. Our brains are forced to put things into categories and order to be able to comprehend all of the information. Human brains love stories because we are hard-wired to process information as a sequence of events (just like a narrative).
In this blog, you have learned about many different psychological phenomenon. So how can you start to implement them into your business?
Take a step back and ask yourself, “am I weaving a story into my brand?”, “am I giving value to my customers?”, “am I keeping my product/service choices simple?”
By analytically looking at your business and the phenomenon, you may find small ways to change that lead to a better brand image and more conversions. Bolster the background on how people make decisions with these tips on how to make better decisions.