If you are seeking to grow your business, one of the most effective strategies is to develop a solid understanding of both your target audience and the psychological triggers impacting customer purchase decisions. Increasingly, companies are considering the psychology of customer purchase decisions when planning their marketing strategies as they seek to more effectively define buyer personas and improve the shopping experience.
Customers are heavily influenced by their peers when making purchasing decisions. They feel reassured when they know that others have already bought from a company or purchased a particular product. Shoppers are reluctant to purchase from an untouched display and are more likely to buy a product where the shelf looks emptier because they know others have already chosen to purchase and it makes them feel more confident about their decision.
Social proof comes in several varieties. A review by an expert in a relevant field tends to be trusted and relied upon by consumers. Consumers also tend to trust celebrities who recommend or are seen using a product, whether unpaid — as in the multitude of celebrities spotted with their Starbucks cups — or paid, such as Samuel L. Jackson’s endorsement of the iPhone.
User social proof can come in the form of user reviews, user ratings, or testimonials. One study showed that 85% of consumers read at least ten user reviews before making a purchasing decision. Product reviews are 12 times more trusted than manufacturer or vendor product descriptions. Testimonials provide the company with the most control over the process since the company can post only the most positive testimonials.
Amazon and iTunes are among online retailers who make use of the “wisdom of the crowds” type of social proof. When a customer makes a purchase or places an item in their online cart, these retailers offer other product suggestions: “Others who purchased this item also purchased this item.”
One of the most often cited examples of social proof is the “Billions and Billions Served” found on most McDonald’s signs. Other companies use a similar tactic, citing the number of projects in which they’ve assisted customers or listing the percentage of customers who have said they would buy a particular product again. Online “share” counters that show how many people have shared a particular piece of content are another form of social proof. When people see a high number of “shares,” they are more likely to share it themselves. Surveys and polls can also be used as a form of social proof to support such claims as “89% of customers were satisfied or extremely satisfied with our service.”
A sense of scarcity can be a powerful motivator. Brands can capitalize on the fear of shortage to drive consumer behavior. Amazon, for example, may include in its listing that only two or three of a particular item are left in stock. Companies sometimes create artificial scarcity by limiting the availability of a certain product. EBay bidding creates a sense of scarcity as people watch desired items and follow them as they are being bid on, but because listings are unique, items seem scarce because there is only one item on a listing, and not an entire store with additional stock if the desired item is “won” by another bidder. However, companies must take care to strike a delicate balance between leveraging scarcity and maintaining trust with consumers.
Sense of Urgency
Creating a sense of urgency by offering an item for a limited time can speed up the purchase process. Consumers may purchase without taking the time for further consideration or price comparisons. Use of countdowns showing the number of hours or minutes left to take advantage of an offer or a ticker showing the quantity remaining in stock can be effective in triggering a purchase. Similar urgency triggers can be observed in online auctions, like eBay, where consumers will often compete during the last few minutes of an auction, driving up the price as a result. EBay shows features like a countdown timer and a clickable link to view the amount of bids on the item to create urgency when a consumer is viewing the item. The consumer also has the option to ‘watch’ the item, where eBay will update them as the bidding is close to ending, so they wait to place last-minute bids as they watch the timer countdown on the item they desire.
A sense of trust and the feeling of being appreciated can have a positive effect on purchasing decisions. Transparency, following through on promises, and demonstrating commitment to the customer are important ways to make them feel appreciated. Incentives and discounts offered to loyal customers can further strengthen trust in a brand or company.
Using free offers
There’s no better way to grab a consumer’s attention than by using the word “free.” Anywhere you place or post the word, people are likely to stop and consider what you’re offering, and will frequently take you up on it. The item or offer may not even interest the consumer initially, but because it’s free, consumers will respond.
A free offer operates similar to a loss leader. Grocery stores often advertise frozen turkeys for pennies per pound ahead of Thanksgiving, knowing that if they can get customers in the store to take advantage of the low price on a turkey, they are likely to go ahead and buy all the other ingredients they need for their dinner. Kroger, for example, sends out a weekly email to customers with a “Friday Freebie,” offering a coupon for a free item to entice the customer to come into the store, knowing that, when they do, they will not only pick up the free item but also do additional shopping.
Understanding your target audience and the impact of psychological triggers on customer purchase decisions is an effective way to have a positive impact on sales and grow your business. By incorporating buyer personas into their marketing strategy and understanding the role of social proof, scarcity, and other triggers, brands can improve the shopping experience and build trust.