In A Saturated Market, Psychology Is Key

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Tomas Oscar Andrén is a founding partner and Chief Visionary Officer of UPRISE Management, a 360˚ marketing, branding and creative agency.

We live in an era of unprecedented consumer choice. Nearly any product one could dream of is accessible, either in person or via online shopping. For consumers, this is mostly great—it is easier than ever to purchase just the right skin care product, kitchen appliance or pair of sneakers. However, it can be extremely overwhelming for both consumers and brands. The sheer number of options makes it difficult for any one brand to stand out and distinguish itself from others offering something similar.

This is where marketing psychology comes in. Marketing psychologists study how consumers make decisions, investigating why some people prefer one brand of soda to another or whether a website’s color palette can impact its performance. By understanding the principles that guide consumer behavior, businesses can employ more efficient, data-driven engagement tactics and ultimately see higher conversion.

Reciprocity

The principle of reciprocity refers to our innate desire to offer something in return for what we are given. In daily life, our tendency to reciprocate kind gestures enables us to foster trusting, supportive relationships with those around us. The same can be true in a consumer setting. A well-researched demonstration of this principle can be found in a common restaurant scenario: When a waiter offers diners a free mint with their bill, their tip tends to increase. This points to the power of reciprocity to generate positive consumer responses.

In marketing, businesses can leverage the principle of reciprocity to create and strengthen bonds with their clients. Such strategic applications of reciprocity can take several forms. Eliciting reciprocity can involve offering a complimentary product with an existing order, sharing e-books or other publications, or providing a discount or coupon code to new customers. These gifts not only attract new clients but also incentivize potential clients to convert to your brand.

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Commitment And Consistency

By appealing to our innate tendency to reciprocate, a business can inspire us to make our first purchase. Then what? How can we cultivate and sustain a loyal consumer base? Surprisingly, the principle of commitment and consistency reveals that first-time customers can easily be enticed to make further purchases; all it takes to generate such loyalty is a little care and consideration.

Commitment and consistency govern how people make decisions. To tackle the countless decision-making opportunities we face each day, we tend to base our decisions on past behaviors and experiences. In other words, once we’ve made a commitment, we are likely to remain consistent in it.

In terms of consumer behavior, it is crucial to keep this principle in mind when considering how people first interact with a brand. To begin building relationships with customers, a brand should ensure that the first commitment a consumer makes is relatively easy and low stakes.

It is also important that this commitment returns value to the consumer, as a positive first impression opens the door to future, larger commitments. The phenomenon of the “free trial” is a good example of this. Though signing up for a free trial is simple, it is unexpectedly difficult to cancel such a commitment—especially when the product provides recognizable value.

Social Proof

When people are ready to commit to a purchase, the principle of social proof describes how consumers decide exactly what to buy. In social settings, social proof describes how people navigate ambiguous social situations; if we are unsure of ourselves, we tend to assume the people around us know better than we do and follow their lead. In a consumer setting, this principle explains why we look for markers of popular choice when making a novel purchase.

This principle is one of the easiest to adapt to most business models. Drawing on the principle of social proof can look like highlighting positive reviews, labeling popular items as “best sellers” or displaying views, saves or favorites.

With such a saturated market, it is more important than ever that marketing strategies account for consumer biases and decision-making patterns. Understanding and applying the principles of reciprocity, commitment and consistency, and social proof can fundamentally transform customer perceptions. It is not enough for a brand to be seen; it must be persuasive enough to turn passive engagement into meaningful interaction into commitment.


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