What drives consumers decisions? How can you use psychology to influence purchasing? These are the key questions we have been tackling for our 3-part series on the principles of Psychology which you can apply to your marketing techniques. We’ve covered priming, reciprocity, exclusivity and utilising emotion (if you didn’t catch them, you can find part 1 here >> and part 2 here >>) and now we’re moving onwards with more interesting studies which will help to hone your marketing skills by increasing your knowledge of how the human mind works.
We’ve all been played by the decoy effect. Dan Airley, author of behavioural economics book ‘Predictably Irrational’ discussed how certain prices are put alongside others to convince you to choose the most expensive option as it is the best deal. Not following? Consider the example Airley found in The Economist for their subscription options:
1) Online subscription for $59
2) Print subscription for $125
3) Online and print subscription for $125
Using these price points, Airley asked 100 students which option they would choose, and the majority chose option 3 – the online and print subscription – because obviously, it feels as though the online subscription is free: it is the best deal! However, if you take out the seemingly pointless (and didn’t they know it!) option 2, most students chose the cheapest option: the online subscription for $59. Option 2 just made it seem as though option 3 was just such a good deal when in fact, if it was not there, people would have ended up spending a lot less.
So how can you use decoys effectively and ethically in your marketing? Just use this rule of three- instead of giving your customers two options for something give them three, be it for purchasing something or subscribing. This should, in effect, increase your conversion rates.
We hope you can see from this three-part series how much of a crossover there is between marketing and Psychology. At the end of the day, you want to change how potential customers are viewing what you offer, be it by highlighting your flaws to build consumer trust, introduce fear as a form of loss aversion to motivate people to buy your product in order to avoid negative outcomes, or by using any of the principles we have explained in depth over the course of this series. Ultimately, you must remain ethical in how you market – the aim is not to trick your consumers with false advertising, it is to help them view your products and services in the way that you want them to.