Marketing psychology is an essential field for any marketer or entrepreneur who wishes to understand and influence human behaviour. In this article, we will examine 5 of the 10 key principles that govern how we make purchasing decisions. We will discover how to harness loss aversion to increase sales of your products and recommend three books for further study of marketing psychology.
Discover the principles of marketing psychology that influence human behaviour
- The first principle of marketing psychology is reciprocity. That is based on the fact that people tend to return a favour received.
- The second principle is commitment and consistency, according to which people tend to keep their commitments.
- The third principle is social proof, which implies that people tend to follow the behaviour of others.
- The fourth principle is the decoy effect, whereby people choose the option that seems better than the others proposed.
- The fifth principle is scarcity, which attributes greater value to a rare or scarce product.
How to exploit loss aversion to increase sales of your products
Loss aversion is a fundamental principle in marketing psychology that can be exploited to increase product sales. People have a greater fear of losing something than of gaining something of the same value. To exploit this reasoning, marketers adopt various methodologies.
- Offer a free or low-cost version of a product. That creates the illusion that you have something to lose if you decide not to buy the premium version.
- Using phrases such as ‘limited time’ or ‘exclusive offer’, creating a sense of urgency that drives the consumer to act in order to avoid missing the opportunity.
- Similarly, highlighting the benefits or disadvantages that would occur without the product can convince people to make a purchase to avoid the feeling of loss.
Loss aversion is altogether a powerful tool that you can use ethically to motivate consumers to take action and buy your products.
Three recommended books on the psychology of marketing
Three recommended books to delve into the psychology of marketing are:
- ‘Slow and Fast Thinking’ by Daniel Kahneman,
- ‘Psycho-Cybernetics’ by Maxwell Maltz and Matt Furey,
- ‘Influence: The Psychology of Persuasion’ by Robert Cialdini.
These books offer an in-depth overview of the theories and principles governing human behaviour in the context of marketing.
‘Slow and Fast Thinking’ by Daniel Kahneman is a book that analyses the two cognitive systems that drive our decisions: system 1, which is fast and emotional, and system 2, which is slow and rational. This book offers an in-depth insight into how human decision-making processes work and how they can be influenced by marketing.
‘Psycho-Cybernetics’ by Maxwell Maltz and Matt Furey combines psychology and cybernetics to offer a new way of looking at our thoughts and actions. Exploring the human brain’s tendency to consume as little energy as possible, the book provides practical and scientific suggestions for steering our ‘brain machine’ in the desired direction.
Robert Cialdini’s ‘Influence: The Psychology of Persuasion’ is another seminal collection on the psychology of marketing. Cialdini examines the factors that influence the decision-making process of individuals and presents six universal principles of persuasion that can be successfully applied in the field of marketing.
These three books are valuable resources for anyone who wants to learn more about marketing psychology and improve their strategies of persuasion.