If you want to grow your business, you need to understand the minds of your customers. Human psychology can and should play a key role as you develop strategies to increase your sales.
With that in mind, here are four quirks of human psychology that are worth incorporating into your customer-facing operations and decision-making.
Act now! Don't delay!
Urgency is an incredibly powerful force in the realm of human psychology, as Marketing Land contributor Nail Patel explained. When people feel urgency, they are more likely to take action quickly. For shoppers, that action is likely to be a purchase. Without urgency, the desire for a product or service may pass, resulting in a missed sales opportunity.
Patel went on to note that there are a number of different ways by which retailers can increase the sense of urgency among their customers. One obvious example: You can emphasize the scarcity of whatever it is that you are offering. If consumers see that there are only so many of the product available, they'll realize they need to buy now, rather than wait and reconsider.
Another option is to use deadlines. Limited-time offers or time-dependent availability can further reinforce the idea that shoppers have to act now if they want to get ahold of your products.
2. Choice overload
Less is more.
Choice has an interesting impact when it comes to urgency. As StoreYa Blog contributor Zack Fagan pointed out, most consumers, if asked, would say they like to have as many choices as possible. In reality, though, having too many choices can lead to "choice overload" - the person is unable to decide between so many options.
If you want to encourage more sales, you need to take pains to avoid getting on the wrong side of this psychological issue. To this end, Fagan recommended that retailers remove products from their online stores that are too similar to one another and develop subcategories to better organize the product line. This way, shoppers can navigate to the general product category they are interested in and will then see a reasonable assortment of options, instead of being overwhelmed by an excessive number of options, and will therefore be more likely to make a purchase.
Setting the bar.
Fagan also emphasized the value for retailers of the psychological trick known as "anchoring." Anchoring is the common practice in which you offer several options for a given product, then use the pricing structure to encourage customers to opt for the more expensive option.
To illustrate the theory in practice, Fagan presented the example of Apple's iPod pricing. At the time, Apple offered a 16GB iPod for $199, a 32GB for $249 and a 64GB for $299. As the writer asserted, it's hard to imagine too many customers opting for the 32GB option, even if that would best suit their needs. Instead, they'll be drawn to the 64GB iPod, as it's double the storage but only $50 more.
In this case, the 32GB serves as an anchor for the higher price product. Without that option, customers may well be a lot more likely to opt for the less expensive iPod.
Newer is better.
One last psychological quirk to utilize is the fact that people are drawn to novelty, as Akshay Nanavati wrote for Kissmetrics. He noted that neurologists have discovered that exposure to the unfamiliar and new releases dopamine in the brain - people get pleasure from novelty. By emphasizing novelty in your online store through new products, promotions and spotlights, you can excite your shoppers and drive greater sales.
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