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5 Ways to Use Psychology for Customer Conversion

Bright-Idea-PhotoWhy do people buy one thing over another of similar quality? Why do customers prefer to shop at certain stores or eat at certain restaurants over other cheaper options?

These questions can be answered by learning how human behavior and psychology works. How can you apply psychology to grow your business? Here are five psychology concepts that you can use in marketing that can expand and elevate your business.

1. Surprise Your Customers

A single act of going “above and beyond” in order to WOW your customers can build a tremendous amount of goodwill without breaking the bank. When a service is just so passionate that it makes you say ‘Wow!” just from hearing about it, then you are doing something right.

Making it memorable for your customers can be achieved with simple acts such as by sending a hand-written note or through random acts of kindness. This is what Zappos, an online shoe and clothing shop, does with remarkable results.

While its regular shipping guidelines state that items take 3-4 days to reach their destinations, Zappos upgrades all of its customers automatically to priority shipping without mentioning it to them. Imagine the surprise they get when their item arrives a day or two in advance? This first impression usually has a lasting effect which results in customers being ‘WOWed” which spawns incredible strong goodwill and reciprocity.

Zappos takes a loss offering this surprise, but customer reciprocity more than pays for it. An act of kindness leaves a big impact when unexpected.

2. Find A Common Ground

Drunk Tank PinkIn his book, Drunk Tank Pink, Adam Alter describes different unexpected forces that shape how we think, feel, and behave. One of the concepts covered in the book is called implicit egotism which says that people gravitate toward people, places, and things that resemble the self. In other words, people like something they have a connection with. Sometimes, this ‘liking’ is completely unconscious. For example, customers will gravitate towards a business or website they feel they share something common with.

This is well illustrated by a customer service representative at JackThreads, a men’s online shopping destination, who managed to win over a customer when dealing with a defective product. The service rep named Jill created a common ground with the customer who needed to return a shirt that had holes in it. The customer had lost weight as he was training for a marathon. Jill explained that he had also once tried for a marathon and congratulated the customer for losing weight and getting in shape for the marathon. He also said he would be cheering for him.

What was the customer’s response? Here is what he said:

“Thanks. I really love shopping with you all. :). Have a great day. You just made mine a little brighter. :)”

By using the language of the customer, Jill was able to establish a common ground and create a wonderful experience for the customer.

3. Use Color to Convert

color-wheel-combination-paletteDid you know that color affects purchases? Customers place visual appearance and color above any other fact such as sound, smell, and texture. In the same book, Adam Alter discusses how certain colors like red make people throw off physical judgment.

In one study, it was found that people tend to write more erratically in red light than in green light. People also tended to be far more accurate under green than red light when estimating the length and weight of objects.

Other psychology marketing studies have shown that color increases brand recognition by 80%, which is directly linked to consumer confidence. Thus when designing a website or landing page, take note of the colors you use.

Here is a breakdown of the different colors based on how they are perceived by consumers:

    – Yellow is often associated with optimism and youthfulness and is used to grab the attention of window shoppers.
    – Red increases urgency.
    – Blue creates the sensation of trust and security.
    – Green is the easiest color to process and used in stores to relax. It is often associated with wealth.
    – Orange is aggressive and creates a call-to-action, subscribe, buy or sell.
    – Pink is feminine and romantic and often used to market products to women.
    – Black is powerful and sleek and used to market luxury products.
    – Purple is calming and soothing. It is often see in beauty products.

4. Personalize Your Services

justForYou-headerCustomers love personalized services so much that they’re even willing to pay more for them. This is the same concept that makes things we own seem more valuable to use despite the fact that others also own the same things.

One way to do this is to create customer profiles that segment your customers on who they are, their needs, pain points, and other factors. Another way to get personal is to invest in creating authentic testimonials. This is especially true if they are used as the first encounter to your business. Highlight aspects that your target customer is likely looking for such as simplicity and speed from such testimonials.

“Follow up” post-purchases have also been shown to make customers happy. A study involving waiters was shown to increase tips by 23 percent without changing the service. Rather than give mints along with the check, they were instructed to bring out the check first with a few mints and shortly afterward, come back with another set of mints, and let the customers know they wanted to bring them more mints, in case anyone wanted another.

This personalization aspect created surprise and the perception of willingness on the part of the customers prompting them to offer a bigger tip.

The idea here is to leave the customer on a high note, which confirms their purchase from you as the right decision. Offer a free post-purchase, or something of value when customers pay for a full service you are offering to create this feeling of personalization.

5. Utilize the Psychology of Loss Aversion

scale-imageThe possibility of loss hurts and this affects how we make buying decisions. We overvalue the things we have and we hate loss. This is all explained in the endowment and familiarity effects. People are willing to take more risk to avoid risk.

In fact research studies have shown that a loss is valued up to 2.5 times more than a gain of similar value.

Offering guarantees for something customers are slightly unsure of is one way to play on this psychology principle. This agrees with the Prospect theory which shows that unlikely events are over weighted by a factor of four while risks of an almost certain event were given a weighting of 87.1 percent chance of winning.

In one study, subscriptions to “The Economist’ appeared like this:

    – Website-only subscription: $59.00 per year.
    – Print-only subscription: $125.00 per year.
    – Print & Web: $125.00 per year.

The result was that the website-only option received 16 subscriptions, print-only got zero, and print & web option received 84. When the print-only option was taken out, website-only subscriptions got 68 while print & web got only 32 subscriptions.

The lesson?

Money decisions are usually relative. Offering expensive options next to regular ones allows people to compare and anchor one price with another which prompts a purchase of what is perceived as a better bargain.

Conclusion

Learning how people make purchase decisions can go a long way in helping you craft engaging presentations that sell. Human behavior and psychology can help you determine what ticks with people which can in turn help you grow your business.

So, are you going to use any of these tips? Please share your thoughts in the comments below.

Author

Guest Blogger David Gitonga
Guest Blogger David Gitonga
David Gitonga is a full-time Web content creator and strategist working with various companies in developing and executing online marketing campaigns on social networks and search engines. He mostly works with small and medium-sized businesses looking to leverage the Internet to drive sales, innovation, and engagement online. Connect with David on Twitter and Google+ or through his website.