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Table of contents
1.
Introduction
2.
Psychology and Marketing: Important Principles that should be used
2.1.
Reciprocity Principle
2.2.
Social Proof
2.3.
Decoy Effect
2.4.
Scarcity
2.5.
Colour Psychology
2.6.
Anchoring
2.7.
Clustering
2.8.
Fitt's Law
2.9.
Baader-Meinhof Phenomenon
3.
Frequently Asked Questions
3.1.
Why is it important for the creators to understand how and why people think and act in a certain way?
3.2.
Which principle can the marketer use to increase the conversion rate of the options that they ultimately want people to opt for?
3.3.
How to implement clustering while creating content?
4.
Conclusion
Last Updated: Mar 27, 2024
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Marketing Psychology

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Speaker
Ashwin Goyal
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Introduction

In marketing, it is very important to understand how and why people think and act in a certain way. It is difficult for the creators to create compelling content for the market if they don't know how and why it would be compelling to the audience. Circumstances and societal changes impact the decision-making process and what people spend their money on. How a business presents itself and how well consumers respond to promotional efforts is what Psychology in marking is. Since marketing psychology digs into why people act and do things they do, it helps the creator understand what makes their audience tick, as it's easier to talk to the audience in the language they understand. It also helps in increasing sales and reaching new customer groups.

Marketing Psychology

Psychology and Marketing: Important Principles that should be used

By understanding the key principles of psychology, creators can take their marketing to the next level by identifying and reaching out to the right audience.

Reciprocity Principle

The main idea behind reciprocity in social psychology is that if a person does something positive for another person, no matter how big or small the thing may be, the other person then feels more cooperative and inclined to do something for that person too. 

This can be used in marketing in various ways. The producer or creator doesn't need to be rolling the dough in order to give something away, it can be anything from a sweatshirt to a gift coupon. Even things like a simple hand-written note can go a long way in establishing reciprocity. The producer just needs to be sure that they are giving away the free thing before they start asking for anything in return.

Social Proof

It is a psychological occurrence in which people copy or get influenced by others to participate in certain behaviour, which is assumed to be correct. From a marketing aspect, we want the customers to participate in behaviours that either increase sales or generate leads. There are multiple ways in which this can be implemented, like adding real testimonials on the sales page from happy customers or adding social sharing and follow buttons that help display the number of followers or shares a piece of content has. 

Decoy Effect

This is widely used in pricing models where one price point has been put intentionally to entice the customer to choose the most expensive option.

It helps the customer get a frame of reference for how "good" the combo or the expensive option is and entices them to opt for that. Therefore if a producer is looking to increase conversion on a landing page with just two options that, they might want to add a third that helps to increase the conversion rate of the options that the producer ultimately wants people to opt for.

Scarcity

It is a well-known fact that people opt for rare content and product rather than ones that are easily available. If we take two jars, place ten cookies in one jar and two cookies of the same type as earlier in the second jar, then it can be found out that when people are made to choose any cookie from either jar, the cookies from the two-cookie jar will be opt at least two times more than the jar with ten cookies. 

But while applying this principle, the producer needs to be careful about how they word it. For example, if a producer approaches this concept as if a product was available in abundance, like in tons, but due to high demand, only a few are left, then people will be very receptive. If a producer approaches it from another angle that only a few products are being manufactured in total, so get it now, then this principle won't be as effective.

Colour Psychology

Colours play a vital role and have a massive impact on human behaviour and, therefore, should never be underestimated, especially in the context of marketing. A study was conducted, and it was concluded by Satyendra Singh that people make up their minds about a particular product within the first 90 seconds, and the majority of their decision is based on colour alone. Colours can be used not just to set the product apart from the others but also to influence mood and feelings.

Though colours are a very powerful tool for marketers, there is no clear way or right combination that works best in every situation. A specific colour combination might outperform another solely because it integrates or contrasts more with the rest of the elements. 

Anchoring

It plays a very important role in wooing customers. It is because people base their decision on the first piece of information that they receive. For example, if a store retails a particular sneaker for 5k, and if that is found on sale for 3.5k, then a customer is likelier to purchase it as he/she would think that the purchase benefits them. At the same time, this might not be the case for someone who purchases sneakers for 2k. Therefore, anchoring is important, especially when running a sale. The producer or retailer needs to clearly state the product's initial price (this is "setting" the anchor) and then display the reduced/sale price. 

Clustering

It has been found that people have a very limited amount of space in their short-term memory, which allows them to remember up to only seven pieces of information at a particular time. In order to cope, most people try to cluster similar pieces of information together. For example, suppose a person has an entire list of stationery items. In that case, the person is most likely to group the items into categories like pens, erasers, highlighters, etc., to better remember what is on the list.

example of clustering

Therefore when creating content, the concept of clustering should be kept in mind. One way to implement it is by grouping similar topics together under numbered bullet points or using different header sizes.

Fitt's Law

It is a model that is based on human movement, and in online marketing terms, it means UX and mouse movement. Since page load speed affects the conversion rates, so does the time that it takes to complete an action. This law has two main components to prescribe how long it takes to move a mouse to the desired area:

  • Distance to the target
  • Size of the target


If the creator wants to increase conversion for sales or signups, then this can be easily done either by decreasing the distance between elements or by making the button larger.

Baader-Meinhof Phenomenon

Have you ever wondered how you heard about a product for the first time and then started seeing it everywhere? This happens when we encounter something for the first time, and then we start noticing it cropping up in our day-to-day life. As per PS Mag, this phenomenon, also known as the frequency illusion, is caused mainly by two processes. First is selective attention, which kicks in whenever we are struck by either a new word, thing, or idea, and after that, we unconsciously start to keep an eye out for it. Second is the confirmation bias that reassures us that each sighting is proof that the thing has gained overnight omnipresence.

This is why marketers need to nurture things. Once someone starts noticing a certain brand or a thing, then you'll (the creator) want to help them start seeing it everywhere. This can be achieved by sending the customers nurturing emails and retargeting ads based on the audience's behaviour.

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Frequently Asked Questions

Why is it important for the creators to understand how and why people think and act in a certain way?

The creators need to understand how and why people think and act in a certain way, as it is difficult for the creators to create compelling content for the market if they don't know how and why it would be compelling to the audience.

Which principle can the marketer use to increase the conversion rate of the options that they ultimately want people to opt for?

The marketer can use the Decoy effect to increase the conversion rate of the options that they ultimately want people to opt for.

How to implement clustering while creating content?

When creating content, the concept of clustering can be implemented either by grouping similar topics together under numbered bullet points or using different header sizes.

Conclusion

In this article, we have extensively discussed about Marketing Psychology.

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