The Psychology of Marketing: What Drives Consumer Choices?

In the dynamic world of commerce, where transactions and decisions can be made in the blink of an eye, understanding the science behind consumer behaviour is paramount for SME’s. As an educator, the science of human behaviour and cognitive processes has always interested me, nowadays, this is focused not on student behaviour but consumer behaviour. It's not just about guesswork or intuition—it's about tapping into the proven principles of psychology that drive our purchasing decisions, whether we realise it or not.

This is such a vast area and something big businesses invest heavily in understanding, so I do hope this brief introduction will help any small business. 

At the core of consumer behaviour lies the intricate interplay between our emotions, cognitive biases, and environmental cues. Decades of research in psychology and behavioural economics have shed light on the underlying mechanisms that influence our choices, revealing patterns and tendencies that are both fascinating and predictable. Did you know that shops place their ‘must-see’ items to the right? Something referred to as the invariant right; strategic product placement as people tend to look, if not gravitate towards the right when entering a shop. (I told you this was a vast subject). 

But let’s start with a focus on emotions. As human beings, we like to think of ourselves as rational, capable of weighing the pros and cons of a decision and arriving at the most logical choice. But the truth is, our emotions often play a far more significant role than we'd care to admit. Studies have shown that emotions can influence everything from brand preference to product perception, shaping our decisions in ways we may not even be aware of. In an age where competition is fierce and attention spans are short, as a small business owner you need to constantly seek new ways to cut through the noise and connect with consumers on a deeper level. And more often than not, that means appealing to their emotions.

Take the classic example of the Christmas ads (picture from John Lewis Ad 2023). Year after year, these heartwarming commercials tug at our heartstrings and evoke feelings of warmth, nostalgia, and togetherness. But what many people don't realise is that these emotions aren't just a byproduct of clever marketing—they're a deliberate strategy designed to create a bond between the brand and the consumer. These ads cost millions and are not advertising or selling any products! By tapping into our emotions, companies create a connection that transcends the products, fostering loyalty and trust that can last a lifetime. But emotional marketing isn't just about warm and fuzzy feelings; it can also be used to provoke other emotions, such as anger, sadness, or even disgust. Think about the provocative ads used by companies like Benetton or PETA, which aim to shock and stir controversy in order to raise awareness and provoke action. While these tactics may not be to everyone's taste, there's no denying their effectiveness in capturing attention and sparking conversation across social media.

The other emotion, of course, is fear. We have all experienced the FOMO tactics at one time I assume? In marketing, fear is often used as a persuasive tool to motivate action, whether it's fear of missing out on a limited-time offer or fear of the consequences of not using a particular product or service. This is used by small and big businesses alike, by tapping into our fears and anxieties, marketers can create a sense of urgency and compel us to act.

Then there are cognitive biases—quirks and shortcuts in our thinking that lead us astray without us even realising it. One such bias is the anchoring effect, which describes our tendency to rely too heavily on the first piece of information we receive when making decisions. For example, when presented with a high-priced item followed by a lower-priced item, we're more likely to perceive the second item as a good deal, even if it's still relatively expensive.

Another common bias is the bandwagon effect, which refers to our tendency to follow the crowd and conform to social norms. Think about the last time you read online reviews before making a purchase. Chances are, you were influenced by the opinions of others, whether consciously or unconsciously. When we see that a product or service is popular or endorsed by others, we're more likely to view it favourably and consider it a wise choice. This is where social media plays a massive part in business advertising and the rise of businesses using influencers to promote their products and services.

So what does all this mean for businesses looking to understand and influence consumer behaviour? In short, without the large corporate budgets, it means small businesses need to recognise the power of emotions and cognitive biases in shaping our decisions, and leveraging that knowledge and using business solutions such as MyBizSolution to create more effective marketing strategies. It means understanding that we're not always as rational as we like to think we are, and that our emotions often hold sway over our choices; or more importantly, those of your customers. 

This, as with many of my business blogs, brings me again back to the significance of understanding your target market and ideal customer*. It is this that will help you recognise the humanity behind the transaction—the fact that behind every purchase is a person with hopes, fears, and dreams. If businesses can tap into those emotions and connect with consumers on a deeper level, they'll not only win their loyalty and trust but also create lasting value that extends far beyond the bottom line.

Of course, understanding consumer behaviour is only half the battle. Small businesses also need to know how to apply this knowledge effectively in their marketing efforts; so here are a few strategies to consider.

KEY TAKEAWAYS:

• Know Your Audience: Take the time to understand your target audience—their needs, desires, and pain points. Use market research, surveys, and customer feedback to gain insights into what motivates them and how you can meet their needs effectively.

• Craft Compelling Messages: Use the insights from consumer psychology to craft marketing messages that resonate with your audience on an emotional level. Highlight the benefits of your products or services in a way that appeals to their desires and addresses their pain points rather than simply selling a product or service.

• Create a Sense of Urgency: Use tactics like limited-time offers, countdown timers, and scarcity messaging to create a sense of urgency and encourage customers to take action. By tapping into their fear of missing out, you can motivate them to make a purchase sooner rather than later.

• Build Trust and Credibility: Trust is essential in any customer relationship, so be sure to build trust and credibility with your audience. Use social proof, customer testimonials, and guarantees to reassure customers and alleviate any concerns they may have. Converse with your customers, don’t hide behind a website or social media platform. People buy people, customers are far more likely to purchase from you with the element of ‘know, like and trust’.

• Optimise the Customer Experience: Pay attention to every touchpoint in the customer journey, from the initial interaction to the final purchase. Make sure the experience is seamless, intuitive, and enjoyable, and look for ways to delight your customers at every opportunity. This is where MyBizSolution is priceless, a CRM and marketing system that deals with every aspect of the customer journey, keeping all your data and analytics in one place for maximum efficiency. 

• Adopt the Right Marketing Strategy: Whether it's email marketing, TikTok videos, webinars or big budget events, understanding your business and your audience is key. 

• Get your Timing Right: This again comes back to knowing your market, knowing what to do and when can have a significant impact on the growth of your business.

By applying the principles of consumer psychology to your marketing efforts, small businesses can create more effective campaigns that resonate with their target audience and drive results. Whether it's tapping into the emotional needs of your customers, leveraging cognitive biases to influence their decision-making, or crafting compelling messages that drive action, understanding the science behind consumer behaviour and using the MyBizSolution platform to implement this can be a game-changer for small businesses looking to succeed in today's competitive marketplace.

* Many small businesses fail to do the background work on truly understanding their business, their WHY, and their ideal customer, but by doing this will save you time and money. For step by step support, workbooks and training check out MyBizSolution’s 50 Minute Funnel Builder Challenge (available at time of writing).