Storytelling permeates every facet of life, serving as the conduit through which we store, index, and retrieve a wealth of information. While traditional lectures may have a soporific (sleepy) effect on their audience, stories possess the remarkable ability to drive action. People establish connections and rapport with one another through the narratives they share, and within these stories, products and brands often play multifaceted roles, serving as both pivotal plot devices and peripheral elements.
So what is it about consumer psychology that magically increases ROI, ROAS, and more?
Beyond the realm of theory, our article delves into the practical implications for consumer psychology and marketing strategies. These insights emerge from the extensive analysis of our findings, providing a valuable resource for marketers seeking to understand and harness the power of brand integration within the captivating world of consumer storytelling.
In this article, we’re tackling 5 of our most beloved psychological concepts backed by real results across marketing campaigns. We also cover the 1 dreaded tactic that makes our team cringe every time we see it! These psychological theories provide valuable insights into consumer behavior and decision-making processes, helping marketers create more effective advertising campaigns, product positioning, and pricing strategies. By understanding these theories, businesses can better tailor their marketing efforts to align with the psychological motivations and tendencies of their target audience.
BUT WAIT! We take this a step further with visual representations showing exactly where these concepts work in relation to marketing campaigns. This is essentially a 5 minute Marketing Bible for Consumer Psychology.
In each section you’ll see we’ve linked a few of our favorite scholarly reads on this topic. Feel free to access, download, and give them a spin for yourself. These are not affiliate links and we do not make any monetary gains from scholarly resources, but feel it’s crucial to include these when talking about scientific studies. You’re welcome!
Not surprisingly, we find stories at the heart of all revolutionary marketing campaigns. It’s only fair that we highlight the backbone of this in “science-y” terms. Narrative theory is an interdisciplinary field of study that focuses on the nature, structure, and function of narratives, or stories. It seeks to understand how narratives work, why they are important, and how they influence human cognition, communication, and culture. Narrative theory is not limited to literature or fiction but extends to various forms of storytelling, including oral traditions, films, television, advertisements, and even personal anecdotes.
Maslow’s Hierarchy of Needs
This theory suggests that individuals have a hierarchy of needs, ranging from basic physiological needs (e.g., food, shelter) to higher-level needs like self-esteem and self-actualization. Marketers use this theory to position products or services as solutions to specific needs. For instance, advertisements may appeal to the need for safety, belonging, or self-esteem to connect with consumers.
Cognitive Dissonance Theory
Cognitive dissonance occurs when individuals experience discomfort due to conflicting beliefs or actions. Marketers leverage this theory by providing post-purchase reassurance or by highlighting the benefits of a product to reduce buyer’s remorse. Customer reviews, return policies, and guarantees are commonly used to ease cognitive dissonance.
Informational Social Influence
Aka “Social Proof“, this theory is rooted in social psychology and suggests that people tend to follow the actions or choices of others, assuming that they are making the correct decision. Marketers use social proof by showcasing customer testimonials, ratings, and endorsements from influencers to persuade potential customers that their product is popular and trustworthy.
Norm of Reciprocity
This idea is based on the observations that people tend to reciprocate when someone does them a favor or provides a gift. In marketing, businesses often offer free trials, samples, or valuable content to create a sense of indebtedness in consumers. This encourages them to consider purchasing from the company in return.
Bonus: Loss Aversion
We’ve included the one technique we can’t stand but we see it play out all the time in marketing. Quite frankly, it’s desperate, and although it does drive revenue it actually complicates retention on the other side. It’s best to avoid this technique as much as possible.
Loss aversion is a cognitive bias and psychological concept in behavioral economics and decision theory. It refers to the tendency of people to strongly prefer avoiding losses over acquiring equivalent gains. In other words, individuals often place a higher value on what they already have or avoiding losses than on potential gains or new acquisitions of the same value.
This technique is (in our humble opinion) abusive to consumers and complicates the trust factor needed in retaining and recycling our consumers. See this article where we dive deep into email marketing and retention strategies.
How Consumer Psychology is used in Marketing Campaigns
The aforementioned psychology terms play a vital role in the complete marketing. For example, for Narrative Theory, a clothing brand might share the personal journey of its founder, highlighting their passion for fashion and the brand’s mission to provide quality, stylish clothing.
In Maslow’s Hierarchy of Needs, a fitness equipment company can emphasize how their products address the need for self-esteem and self-actualization by helping customers achieve their fitness goals.
For cognitive dissonance, an online retailer can prominently display positive reviews and ratings on their product pages to alleviate doubts and encourage purchases.
Using social proof, an e-commerce platform can display the number of products sold or the number of satisfied customers to build trust and encourage new visitors to make a purchase.
Leveraging the Norm of Reciprocity, a software company can provide a free trial of their premium software in return for the user’s email address, with the expectation that some users will convert to paying customers.
Remember that the effectiveness of these psychology concepts in a marketing campaign can vary based on the target audience and the specific product or service being promoted. Successful marketing campaigns often combine multiple psychological principles to create a comprehensive and persuasive strategy that aligns with the motivations and tendencies of the target audience.
For more on this topic, watch our livestream showcasing 45 minutes of conversation on Consumer Psychology.