“The art of persuasion.” That’s our favorite definition of advertising. Ads are about persuasion, and it is considerably easier to convince someone to do something when you already know what motivates them. Predicting behavior and then capitalizing on it is what marketing and advertising are tasked with doing. It’s not an exact science and neither is psychology, which is at the foundation of our industry.
This limited-edition Bentley Bacalar costs about $2 million.
Brand new, this 2021 Chevrolet Spark was $14,395.
Both vehicles can do the same basic job, getting you from point A to point B. The Bentley appeal has more complexity. It makes sure you are noticed when you arrive at point B. It inspires envy. It imparts prestige. That beautiful Bentley is a significant status symbol. Buying a Spark on the other hand, is either a parsimonious or prudent purchase. There is an underlying psychology in nearly everything we do. If you are trying to sell a Bentley, you appeal to ego. If you are selling a Spark, you appeal to thrift. Psychology is the map, marketing and advertising are the drivers.
Reciprocity
One of the most common psychological principles, reciprocity, is a common marketing and advertising technique. If someone does something for you, you will naturally want to do something for them. That’s reciprocity. According to the book, Influence: The Psychology of Persuasion, by Dr. Robert Cialdini, when a waiter brings you your check with a mint, the tip goes up an average of 3%. With two mints it climbs to 20%. This is one of the reasons department stores offer a “gift with purchase.” It’s a reason why, when you buy perfume or cologne, you get samples.
Magic in the Middle
Here’s a common marketing practice known as the Decoy Effect. It provides a consumer with a frame of reference.
Here is the offer-
Online Subscription: $60
Print Subscription: $120
Online & Print $120
Why offer the online and print subscription for the same price as the print only? Because it works. When all 3 options are there, the combo gets picked. Take out the print subscription alone and consumers pick the cheaper option. The middle option made the third one look better.
Deadlines Drive Dollars
“Only 3 left at this price!”
Back in 1975, a study was conducted to see how scarcity affects people’s perception. People were asked to rate chocolate chip cookies. Researchers put 10 cookies in one jar and two of the same cookies in a separate jar. Despite being identical cookies, the cookies from the 2-cookie jar were rated twice as good. This is a psychological adaptation to supply and demand. It’s called scarcity, the concept that less is worth more. Rare is valuable.
Diamonds are dazzling and depending on carat, clarity, color and cut, they can be very valuable. But they are not rare. They are, in fact, the most common precious stone. In the 19th century, De Beers maintained a monopoly on diamond mines, limited supply, drove up demand, and made a lot of dollars. We certainly don’t support this kind of ploy; we only mention it to show that scarcity works.
Anchoring
If you have $50 in your wallet and you spend $50, you say you have spent all your money. If you have $50 in your wallet and you spend $50 on an item that normally costs $100, you say you have saved $50. Psychologically it’s a way we justify a purchase. It’s called anchoring. The anchor is the original price, and that’s the key. From a marketing perspective, it’s important to display the sale price but it’s just as important to show the original. The percentage discount — 30% OFF — is a similar technique.
Psychology is the study of the mind and behavior. The more you learn about human behavior, the more effective your marketing strategies will be, and the more compelling your ad campaigns will become. On the other hand, we have 25 years of experience, so just put your campaign needs on our couch. (Consumers pay more attention to authority figures in a particular industry. It’s actually called authority and it’s kind of what we just did there, but that’s a whole other blog).