Brand Strategy Branding Psychology Consumer Psychology Marketing Psychology

Marketing Psychology Secrets: Creating Value in Your Consumer’s Mind

How is it that an old jar (pics below) sold for over $55,000 on eBay? How is it that a rubber duck sold for over $100 and a corn flake sold for $1,350? Would you pay such amounts for these things? Would it make a difference to you if I said that the jar has a ghost in it, the rubber duck is haunted, and the corn flake is shaped like the state of Illinois? For the people who bought the items at these ridiculous prices, those stories did make a difference.

rubber duckjar

If there is one crucial thing marketers should understand about consumer psychology, it’s how consumers place value on things. The first step to realize is that humans are rarely rational in this subject.

In the cases with the majority of ridiculous things sold on eBay, when objects that are worth extremely little are given a story and are endowed with some form of ‘meaning’, their value substantially increases. Whether we realize it or not, this is something we see all the time when it comes to marketing and business. It all stems from the idea of the endowment effect.

The endowment effect is a cognitive bias that once we own something, it’s value increases in our eyes. It begins to mean more to us. We overvalue things just because we own them and we become illogically connected to those things. We equip our identity with them. For example, real estate prices are often subject to the endowment effect – the seller’s asking price quite often exceeds the consumers’ willingness to pay. When we have lived in a house for so long, it becomes our home and the value of our home, is much higher for us than the value of the house. Just take a look around your room and think of what value you would place on the items you own and ask yourself how reasonable that is.

There was a study done involving two groups of people and coffee cups. One group was given the coffee cups to keep and after some time, were asked to assess the value of the cups. The other group was just asked to estimate the values of the cups. The result: the individuals who were given the cups to keep and who felt the ownership of them, constantly valued them higher than the other group. In several cases, the individuals who owned the coffee cups said that they would much rather keep the cups rather than sell them!

Businesses have realized the power of the endowment effect. Especially when they realized that the feeling of ownership in consumers INCREASES how much consumers are willing to pay for a product. Why do you think car salesmen are more than happy to take you on a test drive before you make your decision to purchase? Why do you think you’re almost always able to download ‘free trials’ before having to pay for the full version?

applemarketingtacticNow that you know this, you will start noticing strategic and effective use of the endowment effect in businesses everywhere. The next time you walk into a clothing store, you’ll realize the strategy behind fitting rooms. The next time you walk into an Apple store, you’ll realize why they allow you to spend hours using their products. The next time you’re offered a sample of anything, you’ll understand what’s happening on a very fundamental level.

So how can we as marketers, harness the endowment effect in our business and marketing strategy? What are some creative ways to stimulate a feeling of ownership in the customer?

One way I can think of is to try to get your products into the hands of key influencers in your industry (bloggers, social media celebrities, etc.). Once they own your product or service, once they equip it with meaning for themselves, they will be sure to advocate it. Another way is to always try to get your customer to take your product home and use it. The best way to do this is to always offer 100% full-refund if the customer is not satisfied – and emphasize that. Stress the fact that there is no harm in just “trying” the product, and if they’re not satisfied, they can get a full refund – no questions asked.

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Marketing Psychology Magic: How to Capture Consumer Attention and Influence Perception

Before psychologists and brain scientists began diving deep into the workings of the human mind, there existed a set of individuals who were well-established experts in behavioral economics.

These individuals still exist today. They are able to manipulate our expectations, overwhelm us with sensory stimulation, provide us with false confidence, and essentially influence the reality we perceive.

They have the ability to astonish us and connect with us by making us feel as though they are reading our mind.

They are the magicians of our world.

I have always been fascinated by magic. During my elementary years I would love to perform magical feats for my friends and family. As I began paving my career in marketing, I began understanding where this fascination with magic stemmed from.

As a magician or as a marketer, I’m naturally curious about the mechanisms of thought and perception.

Magicians and marketers share one thing in common – the drive to manage expectations and influence perceptions. Both involve understanding the psychology of the prospect.

The difference is that brand marketers don’t do it to perform and impress, but to strengthen brands. Anything that allows brand marketers to manage expectations and influence perceptions can be extremely powerful in creating effective brand marketing strategy.

For example, an interesting phenomenon of human behaviour that is very well-known in the world of magic and psychology is:

INATTENTIONAL BLINDNESS, also known as ‘Selective Attention’.

Every magician is aware of the effects of inattentional blindness and its influence on their audience.

Inattentional blindness is a phenomenon discovered by psychologists Arien Mack and the late Irvin Rock.

Inattentional blindness is the inability of the human mind to process anything that is not the specific and direct focus of attention at that moment.

Mack and Rock conducted experiments which proved that people who had their attention focused on one thing often failed to notice an unexpected object, even when it appeared right in the middle of their field of vision!

Test out how susceptible you are to inattentional blindness by taking the selective attention test below. This video had gone viral some time ago so you may have already seen it. Regardless, it will give you a better understanding of this phenomenon:

After conducting these selective test experiments, Mack was noted for stating there is no conscious perception without attention.”

As marketers, we want to ensure our audience doesn’t fall victim to inattentional blindness when we are trying to get our marketing message across.

Our brains are on autopilot 85% of the time – yet marketers are writing ads and marketing messages to their consumer as if they’re paying attention all the time. This is resulting in companies spending money and resources to not only create ineffective ads, but even placing them in the wrong places.

By now, we’re all immune to banner ads on the homepages that we’re trying to surf. They can no longer command our focus and attention. In fact, I would argue that the majority of people don’t even realize banner ads are even present anymore – this is all due to inattentional blindness.

It’s no surprise that ad click-through rates have dropped drastically in recent years. The same goes for ads everywhere – billboards, bus stops, etc. Ads, especially banner ads, have literally become non-existent to the vast majority of people.

Your consumer is making choices about what to read, what website to go on, what to buy and what not to buy, mainly with his or her unconscious brain – which is completely out of his or her awareness. The unconscious mind is an amazing tool for us because it lets us instantly make decisions on what’s good or bad, what we should avoid, or what we should further investigate.

The more we think, the more energy we use up. Therefore, the unconscious mind wants to limit our thinking as much as possible – thus, we  go on autopilot.

In his book, The Buying Brain, A.K. Pradeep mentions that the brain is frustrated by clutter and messages that distract or don’t apply. It will ignore anything and everything it can, that is irrelevant.

Selective attention is the main reason why customers often begin ignoring a company’s latest news, offers, and ads. Especially when it comes to online marketing.

Our goal as marketers, should be to maintain and capture our consumer’s attention to our marketing message.

So how can we combat this phenomenon in our online and offline marketing initiatives?

Here are 4 suggestions:

1. Attract your audience’s attention when they are not doing anything important

When people are surfing online and are zoned into finding something specific, they become blind to everything else. They are more focused than ever at this point. Therefore, invest in advertising where you know your audience is more likely to see your message. This is why TV ads will always be an effective form of advertising. Same with the YouTube ads that run before playing the video. People are always more likely to pay attention when they’re not doing something important.

2. Use your ad to help your customer – make your ad RELEVANT

When your customer is focused in on finding something online, he or she won’t be blind to something that could be of value to their mission. Be creative in your online advertising.

There are too many times when I see banner ads that aren’t at all relevant to the website they’re placed on.

A simple example is if an ad is focused on selling guitar lessons, the placement of that ad would work best on guitar websites or forums. That’s a logical, but often forgotten example.

Combine logic with creativity however, and you’re sure to have a winning online marketing strategy.

3. Use contrast

Bright colors, loud patterns, and things that are in motion, are all eye-catching features. Use these elements in your ads to make your ads stand out from the redundant, plain, and steady context and vibe of the webpage.

Don’t make it over the top and annoying – just enough to grab attention.

4. Leverage multichannel marketing

Don’t just aim to reach your audience through one approach. Having one message or one ad on the top or in the middle of your homepage is not enough to ensure that people will see it. Use all different means to reach your potential customers – email marketing, social media, mobile marketing, etc.

Magic, like marketing, has the ability to bring its audience enjoyment, marvel, and surprise because of its deep roots in understanding how the human mind works and the ways in which our experiences are shaped through our expectations and perceptions.

We’re not only marketers, we’re also the magicians of the business world.

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