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Entrepreneurs, whether they’re running a side gig while they complete a degree, or are working full-time on their venture, have to learn about a huge array of areas in business. This includes recruiting and managing workers, sourcing products or launching new services, keeping track of cashflow, completing administration tasks, and much more.
However, if you want to really build an impressive business, it’s essential to have a strong focus on both sales and marketing, and to continually analyze results to determine how to better improve your processes in both areas. After all, if your marketing initiatives don’t work effectively enough you won’t bring in many new leads to your door; while if your sales process is lacking, you won’t convert enough of these potential customers into actual buyers.
If you’re looking to learn how to increase revenue, it helps if you actually understand how and why people buy, so you won’t be just guessing when it comes time to promote your wares and sell to shoppers. This is where the use of consumer psychology comes in, and can make a huge difference to your business results.
The analysis of people’s behavior when they’re shopping (or thinking about buying) has increased significantly over recent years as more and more data has come to light about how purchase decisions are made, and how these details can be utilized by organizations.
While you’ll learn more in-depth information about human behaviour and other helpful marketing and sales topics in a Master’s in Business Administration (a degree that’s incredibly useful for entrepreneurs in many ways), you can also start to profit from the research into consumer psychology today if you learn at least the basics. Read on for some ideas about how to use consumer psychology in your venture.
Use the Concept of Exclusivity
One of the most effective uses of consumer psychology is the concept of exclusivity. As you may know from your own buying habits, it is common for people to purchase based on emotional reasons, and then to rationalize their shopping to themselves or others with logic. This is particularly true when it comes to luxury goods.
For instance, just look at the buyer of a new Rolex watch who talks about the time-keeping abilities of his or her new accessory; the owner of a Porsche raving about the vehicle’s engine technology or suspension levels; or someone who has splurged on a Hermes bag espousing the durability of the piece. In fact though, most buyers really purchase these types of goods because of how they feel when they buy or use the product, rather than because of more logical reasons.
While these types of goods may very well be functional, reliable, and/or beautifully made using top materials, such design features aren’t typically what make them so valued. It is their exclusivity, and the feelings which go with this exclusivity, which people are won over by. Shoppers like to feel important, successful, sexy, young, vibrant, or any other type of emotion that stems from purchasing an exclusive item, but often won’t admit this to themselves or to others.
If you’re keen to increase sales, think about ways you can take advantage of the concept of exclusivity in your business. Try to create or sell a product or service that is unique, limited in number, restrictive, preferential or the like, and you will pique interest from consumers much more quickly.
Choose a Niche Audience and Turn Them Into Raving Fans
Next, it is also incredibly important to target the right people when selling your goods or services. According to many people, including the founder of the popular marketing and business blog Social Triggers, Derek Halpern, consumer psychology can be applied to online (and offline) marketing when you choose to cultivate a specialized, narrow base of fans rather than trying to cater to every market segment.
Halpern says that the goal should be to “make a small group of people happy” so that you build up a following of loyal and passionate clients who will happily spend their money with you over and over again. By focusing intently on the “right” people who are most likely to enjoy your offerings, and really servicing them well, you will soon have devotees who love what you do and who become entrenched fans raving about your business to others.
Remember that it is in human nature for people to stick with companies they like, and which take a stand about something. As a result, if your business stops trying to cater to the masses, and instead finds a specific niche and works hard to dominate it, you will satisfy the people who believe in your purpose and who will stick by you year after year.
Utilize Effective Brand Design for an Emotional Connection
Lastly, keep in mind that effective brand design works to build an emotional connection with shoppers and will thereby increase sales for you. This is because, according to consumer psychology research, as much as 95 percent of a consumer’s thinking occurs in a person’s subconscious mind.
A vital component of sales, then, should become about focusing on the various non-verbal components of a brand that attract consumers to it without them consciously realizing it. For instance, people can be drawn in by the name of a company, its logo, the graphics used, the characters involved, and what the customer interaction is like. These elements all affect how shoppers sub-consciously perceive a brand, and whether they are more or less likely to spend money with a business as a result.