One of the things to do when developing a marketing plan is to evaluate the psychology and behavior of the customer. Each customer has different personalities, needs and methods of consumption. By properly assessing their needs, marketing executives can choose specific strategies that apply to different groups of customers at different times. From there, businesses can attract potential customers, driving their buying process.
What factors create/affect customer psychology that we need to pay attention to in the process of developing our business? How do you influence customer psychology? In the following article will help you discover more useful information that you need. Let’s keep an eye on it!
I. What is customer psychology?
Customer psychology or consumer psychology is translated into Consumer Psychology. This is an area that goes into studying the thoughts, beliefs, feelings or perspectives and trends of the customer when deciding to buy your product/service. Specifically, the study of customer psychology will include activities such as: researching individuals/ groups / organizations to create conditions for traders, marketers, and salesmen to understand the needs and psychology of customers for products and services.
In sales marketing, who understands customer psychology better, that person wins because when you understand customer psychology, you will choose the most suitable products to attract their attention. Often, to learn about customer psychology, experts in the field of customer psychology will often dig up aspects and problems such as:
- How consumers choose businesses, products and services.
- The thought and emotional process behind the customer’s decision.
- Environmental factors such as friends, family, media and culture influence how you decide to buy.
- What motivates people to choose one product over another.
- What marketers can do to effectively reach their target customers.
Therefore, traders need to have different strategies, principles and goals for their target customers to capture customer psychology in the most accurate way.
2. Why do you need to understand customer psychology?
- Capturing customer psychology is important because it will help you attract, attract customers, make customers trust customers to buy and come back to you. Understanding customer psychology will help:
- Businesses understand customers: understand what makes customers stick, who the target customer of the product (including gender, age, economic status) is, thereby researching what kind of product and marketing message are attractive to these types of customers
- Developing a marketing message: researching pervasive beliefs and attitudes across teams to help organizations know how to get the message out and encourage word-of-mouth marketing.
- Researching customer attitudes and behaviors (including testing, telephone surveys, focus groups, face-to-face observations, and questionnaires): allows researchers to find patterns of consumers.
II. How do you influence customer psychology?
1. Bird of prey effect
In business, the development of a price strategy to ensure revenue efficiency plays a very important role. Strategies under the “decoy” effect can help businesses double their revenue. The decoy effect is one of the sales tactics based on human “cognitive prejudices.” This effect is expressed in three aspects:
– Provide more purchasing options: This is a method that is applied a lot in famous brands. You can easily see how this strategy is used by making two choices that help customers compare.
For example, when you buy a 12-can coca cola for $4, but if you buy 18 cans of Coca Cola, it will cost $5. According to customer sentiment, they will definitely choose to buy 18 cans. By offering a higher price of 12 cans, they sold at more.
Rule 100: This is a law that applies a lot in retail. When applying the discount program, the discount policy will be listed as a percentage for products of small value (usually less than $5). With great value, it will list the discount in the form of money to impress more. This rule is put in place because we are often more impressed by the numbers. This is also how brands hit the customer psyche when it’s hard to calculate exactly how hard they’re going to pay.
For example, when you buy a book for $4, customers will be impressed to hear a discount of up to 30% when in fact it is only equivalent to $1. If you buy a phone for $500 and get a discount of $50, the percentage is actually reduced by only 12%.
Add a less attractive third choice: This is easily noticeable especially when you’re buying food and drinks. For example, when you choose to buy popcorn in the cinema, you will often be given a choice between 3 sizes, small sizes of $2.5, medium sizes of $3.5 and large sizes of $5. At this price, customers will be more inclined to choose small or large sizes instead of medium sizes. This will help the business make a bigger profit.
The “decoy” effect is known to be an extremely effective trick to help businesses take money from customers in a subtle way. With this method, the company will make unexpected profits during its business periods.
2. Psychological framing effect
The psychological framing effect or framing effect is a tendency of perception in which the brain will make decisions about information based on how the information is presented.
The psychological framing effect is often used for the purpose of increasing business productivity. It is often used so that everyone can receive the same information but gives a variety of answers based on the specific choice that can give a positive frame or frame.
In the business sense, you can use the frame effect to make your product or service seem more appealing. For example, imagine launching a new product that has gone through multiple stages of customer testing and evaluation.
Framing as “7 in 10 people say they love our product” instead of “3 in 10 say they won’t use our products anymore” is guaranteed to have a more positive impact on sales.
3. Exposure theory
The “exposure theory” is simply a psychological phenomenon where according to which people develop a preference for something simply because they are familiar with it. In the marketing sense, people often refer to this as “subconscious marketing.” This theory strongly supports the effectiveness of retarget campaigns on social advertising platforms and other paid media channels.
Paid advertising, whether online or offline, is actually one of the best examples of “Exposure Theory” in practice. Brands that invest in ad campaigns across multiple marketing channels are more likely to succeed than brands that use ad campaigns on one channel.
This is simply because, if they do relevant advertising campaigns on radio, TV, direct mail, social media, billboards, etc., instead of just on TV, their audience will be exposed to their brand much more often, Thus developing a subconscious preference for them.
4. The illusion of scarcity
For some reason, we humans find something much more desirable if it’s only available in limited quantities. Have you ever wondered why e-commerce sites often put call-to-action that encourages time on their site, such as “There are only 2 left in stock. Buy now or you’ll miss it”? Because they know how much people hate to miss something that should be theirs.
Capturing and understanding customer psychology will help salespeople/businesses recognize the real needs of customers to successfully close sales and bring high revenue to the company or business. Hopefully, the information shared from the above article will help you have the most general view of customer psychology and how to apply tips to understand them.
Wishing you a successful business!
Ola City Global