My Senior Project
For my senior project, I decided to study the psychology behind business marketing. Studying marketing for a few months was fascinating to me, and I learned so many tips and tricks of how some marketers succeed in attracting more customers for their business. This project was not only fun for me while researching, but sparked my interest for studying this more in depth in college, and possibly majoring in some business avenue!
What Marketing Strategies are Most Effective Towards Influencing a Potential Customer to Purchase Your Business’ Product or Service?
Skylar Smith
Senior Project Advisor: Brian Morgan
12th Grade Humanities
Animas High School
27 February 2017
Part I: Introduction
In a study published in the Journal of Applied Social Psychology, a group of researchers studied the effects mints had on a waiter’s/waitress’ increase in tips. Did you know that giving a single mint at the end of a meal to each diner leads to a 3% increase in tips? When the gift doubles, and two mints are given at the end of a meal to each diner, tips more than quadruple to 14%. Interestingly, if the waiter/waitress gives one mint to each diner, starts to walk away, pauses, then head back and says, for you special or nice people, here is an extra mint, tips skyrocket up to 23%, not because of what was delivered, but how it was delivered (Crisp 303). This is an one of the many examples of how consumers can be “controlled” by just what a person said. This particular example is known as reciprocity. A simple compliment made by the server was made to the diners in hopes of the complement to be returned or reciprocated.
In this paper, I will be explaining how business marketers can use a comprehension of psychological triggers to influence the consumer making decision and discussing what motivates people to buy a certain product by the physical appearances that they see. A better understanding of the consumer-making decision and a grasp of how people react to what they see or hear about a business is vital towards marketing a business to its maximum potential.
Part II: Historical Context
Marketing and psychology are closely related. In the article “Understanding Marketing Psychology and the Halo Effect”, it says “if psychology is the systematic study of human behavior, then marketing is the systematic study of human behavior in the marketplace” (Ries 1). According to the American Marketing association’s board of directors, marketing (in business) is defined as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large” (1). The marketing aspect of any business is crucial towards maximizing sales. Businesses need to market their product to people in order for them to stay in business and to be sustainable. As long as businesses have been around, there has always been a component of marketing.
Before the 21st century and the age of social media, people had to market their products using very simple strategies. People would advertise their product or service by word of mouth, paper flyers, posters, and any other creative way to target and influence others to buy their product or service. In “The Evolution of Marketing”, Maria Moré explains that in 1941, the first use of television recording occurred, then in the 1970’s, telemarketing emerged and became a common tactic. These techniques are still used today, however in the last century, options for advertising businesses increased exponentially. After the 1970’s, the digital era occurred where computers, mobile phones, printing, television, etc. were invented. (4) From here, social media began to explode, and hundreds of thousands of businesses have been taking advantage of sources for free marketing in hopes to expand their company.
In the 21st century, marketing has become significantly more competitive. This is the century where technology has become highly advanced, and social media has emerged. In the article "Competitive Advantage of Social Media", Sandilands states,
Using social media to complement traditional or online marketing and advertising is an accepted way to save costs, reach a targeted audience and generate sales leads…. This makes it more effective and less costly than traditional advertising. In addition, social media offers the potential for an advertisement or blog post to spread virally from user to user, which happens when users share your posts with their own networks. (1)
In more recent years, especially since social media exploded with apps like Instagram, Facebook, Twitter, etc., marketing has become more competitive in the business industry because these social media outlets made it significantly easier for small businesses to expand.
Despite the history of business marketing, the best strategies for marketing depend on what your business is, where it is, and what your target audience is. However, understanding the psychology of the consumer making decision can help anyone with their business. If business owners know exactly how human minds work, and why they make decisions, there would be no issue marketing.
My goal in this paper is to give advice to what the most significant strategies are towards improving business’ sales, to give a better understanding of how consumers make decisions, and what motivates them to buy the things they do. Additionally, I’ll seek to illuminate what we can determine from different studies about persuading/influencing humans to purchase our product or service.
Part III: Summary of Past Research
Business marketing can be complicated and challenging, but when breaking it down, the best strategies come from psychological fundamentals. Much of the research on effective marketing strategies revolve around similar conclusions about persuading your potential customer by being sympathetic, empathetic, generous, persuasive, etc. with the use and understanding of psychological concepts.
In "Five Simple Steps To Influence Anyone", Paul Mascetta discusses five main tactics that are often overlooked but are critical towards influencing the human’s attention towards your business. His five simple steps are to 1) gather information, 2) reduce resistance, 3) initiate control, 4) position yourself, and 5) sustain your position. He calls this the GRIPS method.
The ‘G’ (gathering intelligence) stands for understanding your target, and understanding the group of people you want to sell to. For example, before you go on a date with someone, you probably want to understand them more, find out who they are, what they like/dislike, etc. It is the same with business. Business owners or marketers should really understand their customers or their target group thoroughly before trying to sell their products to them.
The ‘R’ (reducing resistance) revolves around the idea that people use their defense mechanism subconsciously when people try to influence or persuade them. Mascetta wants you to reduce the amount people do this by highlighting similarities between you and your audience. When the potential customer connects to the business marketer, they are going to be more willing to open up, and that’s the chance you (the influencer/marketer) have to persuade them to buy your product.
“Setting a deadline for buying a product on sale is a scarcity trigger. Marketers use the scarcity trigger when running promotions by setting a deadline. Why? Because as something becomes less available, people want more of it” (Mascetta 12). The ‘I’ (initiating control) is used to communicate with your customer, and can be done in many different ways according to Mascetta, including the concepts of reciprocity, scarcity, social proof, and comparison. Reciprocity is when you do something nice for someone, and they naturally feel obligated to do something nice back to you; to reciprocate the favor. This is very useful in business marketing because if you were to give a potential customer a free sample or free trial of a part of your business, they will feel obligated to reciprocate the favor, and do something nice back. The favor may be buying your product or service, which may lead to him or her being a regular customer. Scarcity in marketing is used to make people think something is more valuable or rare than it is. Have you ever seen expiration dates on the back of discount cards or coupons? This is another great example of the scarcity trigger. People perceive it as more valuable and are more eager to buy it in that time limit, knowing that that opportunity will soon be gone.
The social proof trigger is about following what the majority of people do. The bigger the number or percentage of people that do something, buy something, give something, etc., the more willing you are to do the same thing. Think about it; if a little sign in your hotel room says something like, “75% of people in this room reuse their towels, you should too!”, would you reuse your towel? Most people would. Finally, the comparison trigger is about how people are always comparing things to one another. We are always looking for something better, or asking ourselves is this the best option? People in real estate use this technique a lot by showing clients a complete disaster for a place to live, and then the house they really want to sell to the client. The client is probably thinking “oh, the 2nd home is much better, so I should buy this one.” The reason the client will most likely do this is because he or she was only showed places that were worse-looking compared to the house the real estate worker wants the client to buy.
The ‘P’ (position) means to position yourself in a logical place in the consumer’s mind. It is important to do this because marketers need to think about what the consumer is thinking. The main things the marketer should be thinking about is “When I persuade this person to do whatever it is that I need them to do, what can I provide them in return? Am I providing a solution? Am I providing an advantage?” (Mascetta 13).
The ‘S’ (sustain) means to sustain the position you are in. You want to sustain the place you are in in the consumer’s mind. Leaving them with one logical choice is your goal. Give them reasons why being a customer of your business is the last standing logical decision. To do so, you want to give them reasons concerning time, money, resources, information, and education.
In addition to all these psychological triggers to help market your business, Ralph Wilson discusses similar tactics in "The Six Simple Principles of Viral Marketing." The 6 principles he claims are ‘Gives away valuable products or services’, ‘Provides for effortless transfer to others’, ‘Scales easily from small to very large’, ‘Exploits common motivations and behaviors’, ‘Utilizes existing communication networks’, and ‘Takes advantage of others' resources’.
All of these techniques Wilson gives in his article share similar traits with Mascetta’s. For example, the first principle which is to ‘give away valuable products or services’ would fit well under the reciprocity principle stated by Mascetta. The act of giving can easily be reciprocated by receivers, because it gives the person an obligation to give back. Along the lines of the second principle, ‘to provide effortless transfer to others’, Ralph Wilson states that
From a marketing standpoint, you must simplify your marketing message so it can be transmitted easily and without degradation. Short is better. The classic is: ‘Get your private, free email at http://www.hotmail.com.’ The message is compelling, compressed, and copied at the bottom of every free email message (4).
This connects with the social proof trigger that Mascetta states. Providing effortless transfer to others, and using simple messages at the end of every e-mail gives the incentive to people that it is becoming more popular, therefore the receiver of that e-mail will be more willing to sign up and make an account.
Another principle of Wilson’s, ‘Exploits common motivations and behaviors’, can easily be put under Mascetta’s ‘R’ (reducing resistance). Mascetta says in his article that it is critical to highlight similarities between you and the customer, which will reduce their natural ability of defense against people that try to persuade them. Wilson says in his article to “Design a marketing strategy that builds on common motivations and behaviors for its transmission, and you have a winner” (5).
The other three principles that Wilson states, ‘scales easily from small to very large’, ‘utilizes existing communication networks’, and ‘takes advantage of other’s resources’ can not be played into effect unless you gather information which is the ‘G’ of Paul Mascetta’s GRIPS method. A business cannot simply go from small to very large without gathering information on your target group and understanding your customer first. The same goes with using communication networks. You cannot place your message of your business into existing communication with people unless you understand who you are attempting to target. Finally, you cannot take advantage of other’s resources unless you know what types of people you want to be introducing your business to, that can later significantly help market your business.
Aside from the psychological fundamentals marketers can use to influence potential consumers, there are many physical appearances about the product or service that holds back those people from becoming a customer of your business. This is not because of how you are delivering the message to them, but what neurological reactions are happening to human brains with what they see, think, or feel about the business.
“When Procter & Gamble went from 26 different kinds of head and shoulders to 15, they saw an increase of sales by 10%. When the Golden Cat Corporation got rid of their ten worst selling cat litter products, they saw an increase in profits by 87%”, Iyengar says. One example of a problem that happens a lot to people is how many options the consumer is given, which has a much bigger effect on businesses than you may think. This problem is known as choice overload. In a Ted Talk presented by Sheena Iyengar, she explains her conclusion that choice overload is a significant problem that holds potential customers back from buying your product or service. One very interesting study she told the audience was about selling jars of jam. She had a tasting booth of 24 jams one day, and the other day she had six jams. For the tasting booth with more jams, about 60% more people stopped by to sample jams. However, when it came to buying jars of jams, they saw the opposite effect. Only 3% of the people who stopped by the booth with 24 jams bought something, and 30% of the people who stopped by the booth with six jams bought something. It turns out that the choice overload problem with people happens a lot, and with much bigger things as well. Another interesting example she brought up was “If I show you 600 magazines and I divide them into ten categories versus I show you 400 magazines and I divide them into 20 different categories, you believe I have given you more choice and a better choosing experience if I gave you the the 400 than if I gave you the 600. Because the categories tell me how to tell them apart.” Iyengar explains that people can handle more categories than choices; the magazine example is a perfect illustration of that.
Another factor that is important about the physical appearance of one’s product or service are the colors being used in advertisements for a business, commercials, signs, or even on the product itself. Colors have a fairly significant role in purchases and branding. In fact, in the article “The Psychology of Color in Marketing and Branding”, “up to 90% of snap judgments made about products can be based on color alone (depending on the product) (Ciotti 3).” People see color before they absorb anything else. Color can create an instantaneous way of expressing a message without any words!
For instance, a solid color can portray its own message alone. The article, “How to Use the Psychology of Colors When Marketing,” describes typical human responses have to the basic colors. In short, red creates a sense of urgency which is used a lot for clearance sales. Blue is typically associated with peace, water, tranquility, and reliability. Blue is used mostly to promote trust in their business. Green is connected with health, power, and nature. This color is also known to lead people towards being more decisive by stimulating harmony in the brain. Purple is mostly associated with royalty, wisdom, and respect, and frequently used to promote beauty. Orange and yellow are cheerful colors and promote optimism/excitement, and are often used for impulsive buyers and window shoppers. Black is often connected with traits like power and strength, and used as a symbol of intelligence. Grey symbolizes solidarity, practicality and old age. Lastly, white often connects with feelings of pureness, cleanliness and safety (Dashburst 2).
While colors can be associated with certain traits and trigger senses, the most important recognition in the psychology of color is the feeling, mood, and image your brand creates to play a role in persuasion. In the article, “The Psychology of Color in Marketing and Branding”, Gregory Ciotti explains how the stereotypes we have developed for colors only comes into play when we have a clear vision of how we want it to match our business’ personality. For example, Apple is white to show the love of clean, simple design (7). Once we know what message we want our business to communicate, we can start to look at what stereotypes people have developed for specific colors, and match that with our business’ motives.
The last example of physical appearances of a product or service to increase sales that I will further explain is location. The location of where you advertise your business is another important factor towards maximizing sales. The location of a business is important in marketing because you want to expose the product or service to as many people in your target group as possible. For example, if a business’ logo is in a poor, isolated area, with the opposite target group, it would seem pretty obvious that hardly any people would see it nor be interested in the business. If the business’ logo is located in a place where most of your target group is present, and hundreds of people walk, ride, or drive past it, more attention is given to the business’ logo, therefore, more people would go visit the website or call the number, which would lead to an increase in sales.
In “Store Impulse Marketing Strategies and Body Mass Index”, “A recent study investigated the promotional strategy of merely placing different beverages on end-of-aisle displays and found that such placement increased sales of carbonated drinks by 51.7%” (Cohen 1). The more you draw people’s attention to your business, the more likely you are to see an increase in sales. In this article, Deborah Cohen explains slotting contracts as the end result of food/beverage business’ negotiating a price where they can have their product in a specific location in a grocery store. It makes logical sense why there was such an increase in sales by having the product at the end of a store aisle. The end of a grocery aisle is the first thing people see before going through the lane. When more people are seeing it, and are exposed to it, the more willing they are to pick up the product and take a look at it. Also, if kids are shopping with their mom at a grocery store, and see a colorful cereal box at the end of a store aisle, they are probably going to grab the cereal box and ask if their mom if she will let them have it. After the child begs, she will probably give in and let her child have the cereal. This is only one example of several studies that show the significance of business’ location. However, it is probably apparent that from this study, location is critical in marketing and could make a substantial difference in a business.
Besides the psychological tricks and techniques, and attracting customers by physical appearances in our business, the most valuable factor in marketing, and all departments in business, is passion. If you aren’t passionate behind what you are doing in the business you own or are working for, there’s no point. Steve Jobs is an excellent example of how passion can overcome failure, and led his business, Apple, to incredible success. One thing that Steve Jobs mentioned in the video, "Steve Jobs' Amazing Marketing Strategy” is why Nike, arguably the best shoe company in history, became the best. Nike never talks about why their air soles are better that Reeboks, or why any part of their shoe is better than others. “What does Nike do in their advertising? They honor great athletes, and they honor great athletics. That’s who they are. That’s who they are about.” They honor that, and that is what is carrying their business forward. Not only that, but their followers believe in what they do too. They believe in their mission, and want the business to succeed by buying their products. Customers want to know what the business is and what they stand for. Why are they important? Why should I care for them? The main message Jobs explains is “Apple at the core...its core value is that, we believe that people with passion can change the world for the better.” That mission is the root of Steve Jobs’ and Apple’s success. People believed in their mission, and in their vision. Their inspiration continues to carry through to this day. It is difficult to plan marketing techniques if you are not passionate and can’t see the business with a world-changing view.
Part IV: Conclusion
In conclusion, there’s no one secret formula to benefiting all business’ marketing, however, there are many tips that can help one’s business tremendously. Some of the main points from my research consist of the the psychological affects marketers can use by implicating strategies such as the GRIPS method, and influencing the potential customer by the physical appearances he or she sees in the business, such as the colors being uses, the arrangements of product, location, and choices. Another critical component to keep in mind is what Steve Jobs implicated in Apple; putting emphasis on your mission, making sure customers understand why you stand, why you’re “better”, and what makes your business a great investment.
The best marketers are the ones who understand the human brain the most. The key to successfully marketing your business to its maximum potential is to understand how consumers make decisions. You have to get to know your customers, understand why they buy the things they do, why they don’t buy other products. The challenge is what can you do to alter their minds or persuade them into getting a great deal with your business.
We need to keep expanding our marketing strategies, and continue to test theories on consumers. Specifically, what psychological triggers are most effective, what physical appearance tricks work best for your company, and how a passion for your business has impacted others around you, and lead to an increase in motivation and sales. If we understand exactly how consumers think and act, everyone who is interested in your product will buy it. The more we know about people, the more customers we can reel in.
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