In the grand scheme of things, digital psychology is pretty new. Behavioural economics and psychology are combined with digital marketing to learn how people behave online. Especially in consumer decisions, the unconscious mind plays a powerful role in our decision-making processes.
5 Areas of Digital Marketing Psychology
1. Social proof in digital psychology
It’s human nature to follow the crowd! Positive reviews make us much more likely to try a product or service.
Social proof can be displayed in a variety of ways:
- Customer reviews
- Total number of subscribers
- Total number of social shares
- Success stories from your customers
- Third-party certifications
- Security badges
- Client logos
2. Psychological technique of reciprocity
The act of giving and receiving.
It forms part of the natural balance of human life. We feel indebted to those who give us something for free, so we want to give something back. Every day, we experience reciprocity. This is a powerful tool in a consumer society. A freebie can lead to a relationship and loyalty, which ultimately results in a customer becoming a paying one. In addition to acquiring new customers, it can facilitate longer-lasting relationships with existing ones. Building brand loyalty and advocacy through reciprocity is a fantastic strategy. You can apply this in a few ways:
- Send correspondence and outreach with a personal touch – give customers a sense of belonging
- Steer clear of worthless giveaways; target your customer’s pain points with a gift of value
- Customers can reciprocate by donating, purchasing at a discount, or trying your service
3. Loss aversion in digital psychology
Generally, we prefer to avoid losses over acquiring equivalent gains, due to loss aversion bias. Thus, the thrill of winning is far outweighed by the fear of losing. Free trials, for instance, are offered by many SaaS companies to lure new clients. With the free trial, consumers have nothing to lose, or so they think… Once their free trial is over, hey lose! Their subconscious emotional connection will have been built during their free trial. (Emotional, not as a feeling of attachment to another human, but rather as a sense of reliance and dependency).
4. The decoy effect in digital marketing
Many pricing models are based on this cognitive bias. It is a trick or lure used to encourage customers to make a guided decision. A decoy effect occurs when a third price point is introduced to make one of two others appear more appealing. It is incredibly effective to use a three-price-point model in digital psychology. It actually encourages customers to choose exactly the option you want them to choose.
5. Scarcity as a psychological tactic
Scarcity creates urgency, which in turn increases consumers’ desire to purchase. When products are presented as ‘low in stock’ or ‘in high demand’, scarcity is particularly effective for e-commerce businesses. The scarcity tactic can also be used by service-led businesses. They can offer short-term discounts or limited consultation slots, for example.
According to research, scarcity is used in four main ways:
- Short supply:
- ‘Only 2 rooms left’, ‘only 12 in stock’ and ‘limited supply’ increase the urgency to buy before stocks deplete.
- For a limited time:
- ’24 hour flash sale’ increases the urgency to buy before the end of the time period.
- High demand:
- ‘1,437 sold today’ – emphasises popularity and increases the likelihood of buying.
- Unique opportunity:
- ‘Members Only’, ‘unique discount code’, ‘VIP access’ – make individuals feel privileged to have such an offer presented to them
Final note to marketer, brand manager or owner
You must understand your customers’ thinking and why they behave the way they do, in order to increase sales. People shop online more than ever today, so we must apply these concepts to digital marketing. Give some of the tactics above a try and let us know how it goes!
Whatever project we do together, we aim to create magic. Enriching the lives of those we work with and those that they work with – open and transparent communication around all aspects of our partnership is of great importance. This is how we do business, and we are ready to do business with you!