How Consumer Psychology Can Grow Your Business?

Success is at the heart of every business. That is what drives marketers around the globe to devise strategies, splurge into data, and actively create new marketing plans. However, most of the time, they miss out on an essential aspect of bringing success and longevity to their business; consumer psychology.

In today’s world, where everyone has gone digital, and the number of digital users has grown to 2.77 billion, the consumer now has a million choices literally. And so, it is not enough to only know your ideal consumer. It is time that you also dig in their motivations and aspirations to understand what attracts your consumer to buy a product or service. Once you know that, you can use their psychology to grow your business.

What Is Consumer Psychology?

Consumer Psychology is using basic human psychology and cognitive behaviors to attract more consumers and convert them into buyers. This behavior is based on two types of consumption. One is based on the wants and the other on the need to buy something. These behaviors are directly linked to the social and cultural aspects of the consumer. That is why studying your customer’s persona in depth is necessary.

However, since the past few decades, consumer behavior is highly influenced by the advertising and marketing strategies to display the product in a manner that convinces the consumer why they should buy a product or service.  And this is the ultimate weapon that even Amazon and Ikea have used for their success.

Understanding Consumer Psychology

The four primary factors that play an essential part in understanding consumer psychology are:

  • The Gestalt Principle: It studies the cultural implications of consumer preferences.
  • The Iceberg Principle: It defines the need and want factors that influence a purchase.
  • The Dynamic Principle: This principle helps the business owner understand how psychological motivations work about the change in economic status.
  • Image and Symbolism: It helps you identify how the association of memories and emotions can lead to a purchase.

As a business owner, you can deploy these principles to create strategies that would optimize sales. If

Importance of Consumer Psychology

Before launching a product, business managers and marketers should keep a close watch on consumer behaviors regarding similar products as well as the cultural and economic conditions which play a vital role in determining how the buyers will receive a product. Understanding consumer psychology helps the business managers and marketers to:

  • Design products according to the consumer’s needs
  • Deciding a location for the availability of particular products and services
  • Setting the price, keeping in mind the economic factors of the buyer community
  • Salesperson or marketing strategy influence on the buyer
  • Optimizing sales and market strategies according to the appeal of the product or service

Keeping in mind the aforementioned critical points about understanding consumer psychology, let’s take a look at Amazon and Ikea’s use of consumer psychology for the success of their business.

Amazon’s Use Of Consumer Psychology In Their Sales

Amazon did not become the online shopping services giant overnight. Their online page shows a deep understanding of consumer behavior involved in ensuring their success. Amazon uses several techniques to persuade its customers. One of these effective techniques is creating a price perception in the consumer’s mind regarding the displayed products.

Although it looks like Amazon offers lower rates than its competitors, what it does is show the most sought after products (based on the search results) with lower prices in comparison to its competitors.

Another way Amazon plays with consumer psychology is through the principle of reciprocation. They offer free trial services. It makes the consumers feel indebted and sign up for paid subscriptions after the free trial.

amazon consumer psychology
Source: Boomerang Commerce

Ikea’s Brand Strategy To Target The Consumer’s Psychology

Ikea’s success is based on the critical factor of affordability, sturdiness, and quality of the furniture. But Ikea isn’t a furniture brand anymore. They offer all sorts of lifestyle products, from furniture to frames to food. Their stores offer an entirely different level of customer satisfaction and retail therapy due to its layout.

You walk into an Ikea store, and you can imagine all those products laid out in your home. This kind of connectivity leads the customers to spend more as they can see the collective usage of the products.

Ways to Implement Consumer Psychology

If you wish to take your business to the heights of success, too, like Amazon and Ikea, here are a few essential things you can do.

1. Establish A Culture Presence

For your consumer to truly be convinced into buying your product, you have to welcome them in social culture. Make them feel included as a part of your brand’s entity.

Companies like Apple invest millions of dollars in advertising their products, which helps build the impression that these products are essential to buy. Therefore, people get the fear of missing out on such a remarkable phenomenon. It creates a space in the prevalent culture of the essence of these products, so customers make sure they don’t fall back than their peers and buy apple products as a status symbol. This is a crucial case of using cultural presence as a way of boosting your sales.

2. Social Proof

We live in a world where everything is online and digitalized. Nowadays, buyers seek assurance of their potential investment to be worth it. That is why they are more likely to go through the buyer reviews of the products they are interested in purchasing. Buyer reviews make it more relatable for the potential customer to be convinced of the validity of their choice.

Amazon has a highly effective system of presenting customer reviews with star ratings, which allow potential buyers to analyze which products to invest in and whether a product is worth investing in or not.

Source: Amazon

3. The Dilemma of Choices

The fear of missing out is real for the generation of Millennials and Gen-Z. Since social media has taken over everyone’s life, everyone wants to feel included in all the significant happenings.

You can use this fear of missing out by offering limited-time sales and services. It urges consumers to take action immediately. These limited time or a limited number of items in a stock offer mean the consumer will automatically try to attain that offer before anyone else does, to not miss out on any opportunity to avail the discount offers.

Another way of presenting scarce choices is through price anchoring. It is a brilliant technique based on psychology that humans work from the first price offered when making a buying decision. If you take Amazon’s example, you will notice how they display the products in the sequence of lower to higher price ranges, which results in the buyers mostly prefer to choose the average price offered.

Source: Amazon

4. Build Up Curiosity

When there is a gap between what we know and what we want to know, an information gap is created, which triggers curiosity. You can use this element of interest in marketing your products by giving subtle hints on what you are about to offer.

Another way of building up curiosity is through your blog section. You can use a similar approach of blogging as Neil Patel, where he posts content in clusters. In simpler terms, provide essential information to your target audience by linking different blogs together. Not only it makes your site map stronger, but it also helps in establishing your brand’s authority. Remember, if your consumer trusts you, they are more likely to purchase from you.

5. Remain Consistent and Committed

Attain your customer’s loyalty by remaining consistent in your efforts. Offer them small subscriptions and keep them updated through regular newsletters. When a business asks for a subscription to its newsletter, it means they are asking you to engage with them, and your newsletter keeps them reminded of your business.

Also, make use of feedback forms to make the consumer feel included. Remember, if you provide a platform to let the customer provide feedback, they are more likely to believe that you value their opinion. It helps you build brand trust, which is crucial for the longevity of any business.

Conclusion

If you really want to grow your business, don’t oversell the product. Instead, focus on the customer ‘s motivations to buy the product. Help them see the benefits of the product by tapping into consumer psychology. Most importantly, use consumer psychology to build a relationship with them by giving them an incentive to take up on your deals and offers that they cannot find elsewhere.

Remember – your business’ success relies on your customer retention, and consumer psychology is one of the most powerful tools to ensure that the customer stays loyal to the brand.

Leave a Comment