In our last two blogs, we’ve looked at what nudge psychology and nudge marketing is and how its applied by companies and corporations. This blog looks further into this and details ways businesses and entrepreneurs can use these psychological marketing tactics to influence consumer behaviour and attract new customers.
These 6 psychological marketing tactics are as follows:
1 - Anchoring and Framing
These two psychological nudges are two of the oldest in the book. Anchoring is where you use a small piece of information to center an individuals decision making around this detail. If you’ve ever haggled with somebody over a price then you know what anchoring is. In the property market, valuing your home at €500,000 sets peoples minds at this value. Potential bidders will anchor on that price and adjust bids accordingly. This gives you negotiation room.
Framing is a similar method of cognitive structuring. Dental companies frame whitening of teeth as a way to improve your attractiveness to the oppositive sex rather than focusing solely on functional benefits of preventing gum disease. Sex sells. Lynx has a similar framing strategy for anti-perspirant deodorant in their marketing. Wear lynx and get more girls. In restaurants, a high priced menu item can serve as a decoy to lead most customers to more affordable and popular items. It also creates the illusion that the restaurant is high quality.
2 - Social Proofing
Humans are social animals. The opinions and behaviours or other “human beings” influence us. We subconsciously feel the need to “fit in”. Social proofing involves suggesting to people that a product/service or behaviour is also popular with other people. This creates social validation.
When shopping online and looking at a product page, you may see a feature on the page with the title “People who bought this product also bought…” – this is social proofing. Facebook and Twitter use social proof by giving users the option to “like” or “favourite” content shared.
The government commonly uses these techniques to nudge people into paying taxes, quitting smoking, and generally cooperating with laws and legislation. Break the law and you’re labeled a criminal and face social ostracisation.
3 - The Goldilocks Effect
This nudge marketing technique is another method of framing. The name derives from the fable of Goldilocks who is presented with 3 options for porridge - 1 too cold, 1 too hot and one that is just right. Retailers often use this psychological marketing technique presenting consumers with 3 different types of products. Two of these options serve primarily as distractions to anchor a person on the other option.
The first option is expensive, fully featured and positioned at a niche market. Another option is cheap with simple packaging and minimal features and functionality. The other option is the one in the middle which appeals to the mass market with the necessary features and ideal price.
4 - Default Options
We can deny it all we want but our brains are lazy. They do not seek to be overworked and need strong direction, focus and purpose to get going. Our brains face a deluge of information in our day to day knowledge-centered economy. This cognitive overload forces us to take shortcuts wherever we can meaning we often choose the easy option especially when shopping.
Therefore, when we’re presented with options we’re most likely to choose the default option. In effect this allows companies make the choice for us. They recommend and architect choices for us. Many organizations take advantage of this by using automatic opt-ins to emails lists, added features at an extra cost or extras you do not need. Insurance companies are notorious for this.
A recent study in Norway found that if they had automatic kidney donations where people had to opt out of kidney donations, then kidney donations increased dramatically.
5 - Authority Principle
People are more likely to trust another person or website if they believe them to be an authority or credible source of information. In the consumer world, earning that trust can be the most difficult. Once the person is already buying from you then they are more likely to do so again. In business they say, the hardest customer to get is your first and the second hardest is your second customer.
In the online world, trust can be won through a variety of ways. Naturally, testimonials can illicit trust especially if they come from well-known figures or organizations. The layout, typography, colour, and overall presentation of the companies online presence can also carry weight. Conditions or awards also carry significant weight and prestige. For e-commerce websites having trusted security symbols and payment methods also add to the perception of a reputable and authority business.
6 - Incentivisation
Rewards and incentives can be used to persuade people to take an action. Companies can use free e-books, free guides, and other freebies to get your email address and build a relationship. This ultimately could lead you to become a customer down the road. In retail, incentives like free competition entries, 20% extra free, free spoons with cereals, free pint glasses with 8 packs of beer etc exist. They all serve to enhance the customer relationship, create engagement or convince potential customers to buy to get the freebie.
Increasingly governments are looking at how to use psychological nudges to get corporations to behave more ethically. Initiatives like carbon taxes for large-scale polluters serve as a reward/punishing system to encourage more environmentally friendly behaviour. Competitions where companies get named as the most ” Green” also help.
In the workplace, Employer of the year competitions serves to reward companies for being a great place to work and carry prestige for companies as well a way to attract the best talent.
Conclusion
Put yourself in the shoes of your customers and learn to look objectively at your own business and brand. This is often the hardest part. Then use these psychological marketing tactics to both attract new customers and engage old ones.