In his 2004 book “The Paradox of Choice,” American psychologist Barry Schwartz challenges the long-held notion that the more choices we have, the better. On the contrary, the abundance of choice can lead to indecision and heightened levels of anxiety and stress. This doesn’t mean having no choice at all is the optimal scenario either. Instead, there is what he calls a sweet spot, where just the right amount of choices can positively impact our well-being.
What does it mean for marketing? Oftentimes less is more.
It’s easy to assume that presenting customers with limitless options can bring them more satisfaction. However, going by Schwartz’s ideas, being confronted with overwhelming possibilities can leave customers paralyzed with indecision, thereby impacting your sales.
The above example underscores the importance of mastering consumer behaviour in order to make the appropriate business decisions, actions, and adjustments, especially in the digital world. Too often entrepreneurs fall into the trap of intuition. They rely solely on their own understanding that they fail to take into consideration the consumer psychology at work. That’s why it is important to be aware of the factors that can impact how customers go from “I’ll think about it” to “Count me in!” in a matter of seconds.
Customers are more empowered
With information readily available at their fingertips, consumers are becoming more empowered when making buying decisions. Data from Google shows more than half of shoppers say they always do research before they buy to make sure they are making the best possible choice.
Prior to making a purchase, customers are already exposed to different brands through social media and online ads. But when they encounter specific problems or needs, they turn to their own research on which products or services are most relevant to them.
For example, people who are keen on finding solutions might even stumble upon your blog post during their search. Offering them valuable insights can turn you from just another brand who wants to sell them products to a solution provider that can help make their lives better.
Today, customers get their information from multiple sources, mostly online. That’s why it is important to be aware of your online presence and make sure that customers can access the right information about your brand. Highlighting reviews can also help customers make decisions about your product or service. In the same way, information about how and when to use your products can also contribute to the overall knowledge they have about your brand.
Knowing how to interact with your customers in the digital space is crucial if you want to succeed in today’s business landscape. Moreover, applying knowledge about consumer psychology can help you reach and eventually win over your customers.
Looking for social proof before taking action
One psychology-based concept you may want to keep in mind is social proof. According to The Decision Lab, social proof is a psychological and social phenomenon wherein people tend to look to those around them to conform to a behaviour that fits the situation. This is especially true in ambiguous circumstances when people copy others for the “right” way to behave. Social proof is also the reason why word of mouth marketing works so well.
You can apply this concept to your own marketing strategies, as well. For instance, when creating social media ads, use testimonials from people who have a similar profile with that of your target audience. This would make your ad more relevant and relatable to the people you’re trying to reach. In addition, don’t just post photos of your product, rather use images of people using it so that your audience, in turn, can visualise themselves doing so as well.
People love consistency in their actions
According to Dr. Robert Cialdini, professor and author of the 1984 book “Influence: The Psychology of Persuasion,” people need “shortcuts or rules of thumb to guide our decision-making.” His research has identified six of these shortcuts that guide human behaviour. This is especially relevant since people online want to make quick and efficient decisions.
One of these shortcuts is consistency—or the idea that people like to be consistent in what they have previously said or done. This involves asking or looking for small commitments made at the start. This means that when you get people to commit to an action, no matter how small, they are more likely to be willing to go for a much bigger, yet still consistent, change.
How can you apply this technique? Take a customer who has previously bought an item from your store and follow up with a coupon allowing them to upgrade to a higher value product or service. Chances are they will consider the second purchase since they’ve already made the initial action.
Or try actively informing your customers of their status in your loyalty programme. This may increase the likelihood that they will purchase more regularly because they know they are part of that elite group.
Mastering customer behaviour
Mastering customer behaviour will help you run a business that resonates with consumers and increase your chances of getting a “yes.” Understanding how the mind works will allow you to think of creative ways to bring in customers in an ethical way. In today’s digital world, consumers interact with brands on multiple touch points. And it is important to recognise these opportunities to engage with them on a deeper level.
So the next time you’re launching a new campaign, take a moment to see whether there are psychology-based techniques you can utilise to create better sales and marketing strategies. After all, the digital world is uncovering more ways to understand the customer. Brands need to be keen on recognising these opportunities because with deeper insights come smarter strategies.
Delve into the science behind consumer behaviour in digital technology with SMU Academy’s MarTech and Consumer Insights in the Digital Age programme. It’s time to rethink marketing strategies for the modern consumer. Learn more today.
