The “sneaky” psychology of digital marketing

We all know that a deep understanding of psychology will make us better marketers, but determining exactly where to start if we want to learn more about the psychology of marketing can feel daunting. After all, psychology is an enormous field, with many sub areas to drill down into and countless case studies, books, online articles and magazines to wrap your head around.

I’ve been grappling with this since I decided to focus on improving my own understanding of the psychology of marketing. I’ve scoured the web and found some excellent information about the subject and tried to briefly highlight some of the gems I found here:

Why understanding consumer behaviour is important

Digital marketing and consumer behaviour are intrinsically connected. Without grasping a level of understanding of what drives consumers, marketers would have a pretty difficult time identifying the right market segments and creating compelling content for a digital marketing campaign that will attract attention. 

Businesses that don't understand the how, why and where of consumers, and gain insight to why they make the choices they do, are going to have a much harder time making a connection and reaching those coveted conversions. Don’t know much about the relationship between psychology and marketing? This article (Soskey, 2013) is a great place to start. It provides an introduction to psychological principles that are highly relevant to digital marketing and explains how to apply them to your marketing campaigns.

Reciprocity – to receive you need to give

We’ve all heard the old adage, “you’ve got to give to get.” No matter if you call it karma, paying-it-forward, reaping what you sow, doing unto others as you’d have them do unto you, or the golden rule. The point is, when you give first, you will get back in return. As a digital marketing strategy, it has huge advantages. People do business with those they know, like, and trust. When you give first, without expecting anything in return, it goes a long way in helping to build the like and trust factor.

What is your business giving away? What product, service, bit of knowledge, or piece of information could you charge for, but should probably give away instead? When you give away valuable information to potential customers for free, your business has greatly increased its credibility and likelihood of picking up new customers through this strategy. Think of it as a loss leader.

When someone does you a solid, you feel compelled to return the favor. The same goes for your customers. No good deed goes unpunished. But remember, this isn’t just a marketing tactic. It’s an underlying strategy that needs to permeate the very core of your business. If you’re not sincere, customers can tell, and it will backfire.

In 2002, a team of researchers found that tips for waiters go up 3.3% when an after-dinner mint is provided with the receipt, and they increase a full 20% with a look in the eye and a second mint from the server. That’s known as reciprocity, and, if you’re like me, it probably got you thinking about how to apply this to, say, email marketing or growth strategies. "The 20 Best Lessons from Social Psychology" (Hamed, 2013) provides some fascinating examples.

Some of the side benefits of giving first include:

•    Improved SEO ranking
•    Increased brand recognition
•    Customer loyalty

Start using articles as tools to stimulate reciprocity: on your web site, in social networking, blogs, etc. If you do so, your response will increase dramatically. The benefits far outweigh the risks. If used consistently, this strategy WILL BE your competitive advantage, and your customers will love you for it!

Build trust using social proof

Unless you’ve been living under a rock, you’ve probably been told countless times that social proof is a key ingredient to successful online marketing. When you make a claim about what you're offering, be very aware that your prospect is probably going to take it with a "grain of salt". In other words, they may not believe you. So what can you do about this?

Tell them and SHOW them what your other happy, satisfied customers have to say about the point you are making. Make it a habit to always back up your claims with "SOCIAL PROOF". There are many ways to provide social proof successfully, as outlined in this article (Crestodina, 2013). 

Persuasive Marketing – Not rocket science…but neuroscience!

If marketers want their messages to be heard in today’s overly saturated world of communications, we need to get people to tune us in, not tune us out. One way we can do that is by empathizing with them, not just trying to persuade them to buy whatever product or service we are offering.  We need to be more patient as marketers, and instead of going after quick and irregular sales/decisions, let the relationship drive the decision.  We all know relationships require a lot of empathetic nurturing, which takes effort, but in the long run good relationships are worth it.

Interestingly, a team at Princeton University explored how the patterns in our brains are affected when we tell, and listen to, a story. The results of the study (Nahai, 2014) proves that as marketers, it should be our goal to provide messages that are convincing enough to attract people to our business and ultimately convert the interest into sales.

How to convert more prospects into paying customers using psychology

The tipping point between a visitor and a customer lies in matching desire with relevance. Common psychological motivators are the use of urgency (limited time) and scarcity (limited supply). They’re simple concepts that can be applied in a number of ways.

Urgency 
“Buy now”. “Don’t miss out”. We’re used to hearing these phrases. Statements of urgency are used to coerce us into making a purchase decision right away. Amazon and Ticketmaster use this technique very effectively:

Amazon is known to use a number of triggers to entice an action, one being the “order before date” concept. This relies on using a finite period of time remaining to encourage an immediate purchase decision.

Ticketmaster has also found a way to increase the urgency of buying tickets. Once you’ve selected your seats, you only have a few minutes to complete your transaction before your opportunity expires, and someone else gets your tickets.

Scarcity

To use the concept of scarcity, you need to convince someone they need to buy right now, before supplies run out. This increases the fear of missing out on the desired opportunity.

Airline ticket purchasing is very sensitive to the concept of scarcity, because the number of seats rapidly diminishes as the flight time nears. To leverage the decreasing seat availability, Expedia uses transparency as a psychological trigger, encouraging customers to get their credit card out and book right away. Expedia communicates scarcity by highlighting the number of seats available when the flight is nearly full.

Urgency and scarcity really work, and they work quite well. People tend to act quickly when an issue is important enough. People tend to buy when something is scarce enough. These two techniques change the consumer’s behavior toward supply and demand — two fundamental economic building blocks.

Buyers do what their instincts tell them to do — to act immediately on what is important (urgency), and to acquire what is limited (scarcity).

Final thoughts
 
How does your audience decide what it wants to click, share, favorite, and purchase? Understanding a bit of social and behavioural psychology can go a long way toward a better understanding of your audience and why they do the things they do on social media and on your website.

Reading is the supreme “life hack” — distilled knowledge that often took years to assemble can be consumed in just a few hours. There’s a ton on the Web for marketers to discover, and the more you know about social psychology and human behavior can lead to some quick wins in the way you compose your social media updates and communicate online. I can’t think of a single better way to empower your brain (and yourself) than that.

Social Media Marketing - "Fad" or "Rad"?

To some, social media marketing is a temporary but powerful fad that must be taken advantage of while it's still in the limelight. To others, it's a catchphrase with no practical advantages and a steep learning curve.

Because it appeared quickly, social media has gained a reputation for some of being a passing fancy, and therefore, not a lucrative one. However, statistics draw a very different picture...

According to Hubspot (Kusinitz, 2014), 92% of marketers in 2014 claimed social media marketing was important for their business, with 80% indicating their efforts increased traffic to their websites. According to Social Media Examiner (Stelzner, 2014), 97% of marketers are currently participating in social media - but 85% of participants aren't sure what social media tools are the best to use.

Let's look at how social media marketing can improve your business:

• Improved brand recognition: Social media networks are new channels for your brand's voice and content. This is important because it not only makes you easier and more accessible for new customers, but also makes you more familiar and recognizable for existing customers.
• Increased brand loyalty: A report published by Texas Tech University (Bell, 2013) shows brands who engage on social media channels enjoy higher loyalty from their customers. Another study (Baer, 2012) found 53% of Americans who follow brands in social media are more loyal to those brands.
• More opportunities to convert: Every post you make on a social media platform is an opportunity for customers to convert. When you build a following, not only will you have access to new customers, recent customers, and old customers, you'll be able to interact with all of them.
• Higher conversion rates: Studies have shown (Hubspot, 2012) social media has a 100% higher lead-to-close rate than outbound marketing, and a higher number of social media followers tends to improve trust and credibility in your brand, representing social proof. So, simply building your audience in social media can improve conversion rates on your existing traffic.
• Higher brand authority: Interacting with your customers regularly is a show of good faith for other customers. When people want to compliment or brag about a product or service, they turn to social media. The more people talking about you on social media, the more valuable and respected your brand will seem to users.
• Lower marketing costs: According to Hubspot (Kusinitz, 2014), 84% of marketers found as little as six hours of effort per week was enough to generate increased traffic. Six hours is not a significant investment for a channel as large as social media. Start small and you'll never have to worry about going over budget - once you get a better feel for what to expect, you can increase your budget and increase your conversions in kind.
• Richer customer experiences: Social media, at its core, is a communication channel like email or a phone call. Every customer contact you have on social media is an opportunity to publicly demonstrate your customer service level and enhance your relationship with your customers. It's a personal experience that lets customers know you care about them.

These are the benefits of a long-term social media campaign, but if you're still apprehensive about getting started, consider these points:

• Your competitors are already involved. Don't let your competitors reap all the benefits while you twiddle your thumbs. If somehow your competition isn't involved on social media, there's even more of a reason to jump in - the field is open!
• The sooner you start, the sooner you reap the benefits. Social media is all about relationship building, and it tends to grow exponentially. Your followers tell two friends, and their friends tell two friends, and so on...
• Potential losses are minimal. Realistically, you don't have anything to lose by getting involved in social media. The amount of time and money it takes to create your profiles and start posting is insignificant, compared to other marketing channels.

The longer you wait, the more you have to lose. Social media marketing, when done right, can lead to more customers, traffic and conversions, and it's here to stay. So, why not make the most of it? 

How technology has changed marketing...Forever

Nearly fifty years ago, Philip Kotler published his Principles of Marketing, which has defined the practice for marketers ever since. What made Kotler different than what came before is he took insights from other areas, such as economics, social science and analytics and applied them to marketing. Although that seems basic now, it was groundbreaking at the time.

Promotion dominated the field of marketing in the 20th century. Although evaluating opportunities was important, advertising, especially on TV, was what drove budgets and strategic thinking. Today, however, digital technology has enabled us to re-target consumers when they respond to a message and that has changed marketing forever. In effect, we must make the shift from grabbing attention to holding attention.

Due to this brands will have to learn to be more like publishers and develop content skills. It also means marketers will have to create a genuine value exchange rather than just coming up with catchy ad slogans and price promotions.

In the past, we focused on rational benefits to entice consumers to support our brands. Show that your brand is better in a clear, rational way and you could build a loyal following. While some energy went into tactics further down the line, the thinking was that awareness was a tide that lifted all boats. Most knew that the notion wasn’t 100% accurate, but it was true enough that it worked and played a crucial role in building our most beloved brands.

That model is now broken because 60% of television viewers are surfing the Internet while they watch (Chmielewski, 2013), so the action that a TV ad is most likely to elicit is not a trip to the store, but an Internet search. That’s a very fundamental change and it means we need to do things differently.

Once a consumer begins to research a category purchase online, their data trail will alert your competitors, who will re-target those same consumers with new offers based on their surfing behaviour. In effect, by building brand awareness you are also building category awareness and allowing your rivals to line their coffers.

Marketing strategy has always been numbers driven. We survey a small selection of the population and then scale up those samples to make decisions. Unfortunately, our numbers are always wrong. They are backward looking, fraught with error and based on confidence intervals that virtual guarantee that they’ll be wildly off one time in twenty.

However, big data (Arthur, 2013) is enabling an entirely different approach. Rather than wait for the results of controlled studies and then analyze them to glean insights, we can collect massive amounts of data in real time. Instead of fooling ourselves into thinking we have it right, we can become less wrong over time.

Adobe polled 1,000 marketers in the U.S. and found that most strongly doubt their skills, effectiveness, and ability to measure the impact of their campaigns. The study, Digital Distress: What Keeps Marketers Up at Night? (Adobe, 2013), exposes new insights into the industry’s attitudes toward e-marketing.

So, while Kotler reconciled marketing with the standards of business, over the next decade we will have to reconcile marketing with the standards of technology. Quite a challenge to take on. 

A word to the wise: Either adapt to change, or get left behind. 

Let's start at the beginning...

My career literally began on the eve of technology in the average workplace. My first full-time job was as the secretary for the sales department of a small, family-owned television station.  In order to sell commercial time to local businesses, the folks I worked with ventured out with a list of “cold calls” every day. That’s right, knocking on doors and asking for sales. This was my first look at “old school” marketing.

My first look at technology was the day the owner of the station purchased the company’s first PC. They locked it in a spare office. If someone wanted to use it, they had to ask the Manager for the key to the office and lock it up and return the key when they were done.  One night, someone forgot to lock the office.  The next morning we were all called into a meeting and admonished for being so irresponsible!

Those were the days before fax machines, email and cell phones. It really wasn't that long ago…it’s just that technology has changed all of our lives so much, so quickly since then. Our children grow up with more technology in society in their lifetime, than any generation before.

So, I am sure you understand better now why I find the prospect of e-Marketing so exciting. To be able to use technology to market a product or service to people all over the world in a matter of seconds, is a long way from those days of “cold calls” from the not-so-distant past!

Please check back frequently to discover how digital marketing can be a more targeted and less expensive medium than marketing through traditional media. I am looking forward to our journey together.