Digital Transformation: The Key Revolution for Competitive Advantage
December 11, 20236 psychological principles of sales and marketing
Introduction
Psychologist Robert B. Cialdini spent hours one Christmas trying to find an action figure around the city that his son had asked for as a gift, thrilled by the advertisement he had seen on TV. Due to high demand, that particular figure was sold out. His next-door neighbor, whom he encounters in the store, is looking for the same toy for his son and is no luckier. Dissatisfied, they then look for and buy another action figure and head back to their families.
This would have passed as an utterly insignificant moment, had Robert's son not begun to ask for the same action figure that he failed to receive for Christmas after 2-3 months, telling his father that he saw on television that it was released for sale again. When he went to the store, Robert encounters the same neighbor he met the previous time, who again, is looking for the same action figure. This time, both manage to buy it. "What a coincidence that we meet twice in a couple of months looking for the same toy for our kids." Then, Robert, who is a social psychologist, experiences his eureka moment, realizing that what happened was absolutely not a coincidence.
Toy sales experience a huge spike during the holidays, followed by an equally significant drop. Companies that sell toys have understood this and devised a strategy where they aggressively advertised an action figure that was released for sale in very limited quantities during Christmas. When they intensified the advertisements for that very toy again after a few months, parents who failed to get their children the promised toy during the holidays were compelled to acquiesce to their children's renewed requests. This created a huge increase in toy sales even after the holidays.
Inspired by this case, Robert B. Cialdini dedicated his career to the psychological principles behind persuasion and marketing. In 1984, he published the book "Influence: The Psychology of Persuasion," which is considered one of the best books on marketing ever written. More than three decades after the book's publication, its 6 principles are used in sales and marketing, especially in businesses with conversion rates.
6 principles of influence
The most significant aspects of this book were Cialdini’s "6 principles of influence," which are:
1. Reciprocity;
2. Consistency;
3. Social proof;
4. Authority;
5. Liking;
6. Scarcity;
Conversions are carried out through persuasion. When a user accidentally visits your website, you want to convert them into a lead, and then into a customer.
In the world of conversions, every step in the course of persuasion counts. Here's how you can use Cialdini's 6 principles of persuasion to increase conversion rates.
1. Reciprocity: Give something in order to get something in return
The idea of reciprocity suggests that people naturally feel obliged to offer discounts or concessions to others if they have previously received services from those same people. Psychology explains this by emphasizing that people simply hate to feel indebted to others!
SelectHub is a startup that believes information should be democratized and free. Because of this, they offer an incredible free service where you can find the software you need through a series of personalized suggested criteria. Suppose you are procuring a CRM system; by using SelectHub, you receive a ranked list of the most suitable CRM systems based on 150 criteria tailored to your needs, which includes the number of employees in your company, the type of service, annual turnover, etc.
The fact that this stems from their values is a very noble thing; however, behind this service, which required enormous effort to develop, lies a marketing strategy. By the principle of reciprocity, visitors to their platform who use this service feel obliged to purchase the software they were recommended through them. It is precisely at that moment, when a platform visitor wants to find out the price of a CRM system, that SelectHub offers them the opportunity to make contact (converting a website visitor into a lead).
2. Liking: why we buy from people we like
The principle of liking is based on the idea that people are more likely to say 'yes' to those they know and like. This principle emphasizes the importance of building relationships, establishing good rapport, and creating a sense of connection with potential customers. By appealing to their personal preferences, similarities, and common interests, businesses can significantly enhance their persuasion efforts..
In the business world, consultants, managers, and marketing experts skillfully use this principle through
Influencer marketing:
In the era of social media, influencer marketing has become a powerful tool for businesses. By collaborating with influential individuals who connect with the target audience, brands can leverage the principle of liking. When consumers see their favorite influencers endorsing a product or service, there is a higher likelihood that they will perceive it positively and develop a preference for it.
Employees as brend ambassadors
Businesses can also leverage the principle of liking internally. Encouraging employees to become brand advocates and share their positive experiences with the company creates a sense of authenticity and trust. Consumers are more likely to engage with businesses when they see genuine recommendations from employees they know and trust.
Personalised marketing
Personalization is another effective way to apply the liking principle. By tailoring marketing messages, offers, and recommendations to individual consumers based on their preferences and past behavior, businesses can create a sense of closeness and connection. This increases the likelihood that consumers will view the brand and its offerings positively.
Building relationships with customers
Establishing long-term relationships with customers is a fundamental aspect of the liking principle. Businesses can invest time and effort in understanding their needs and preferences to build trust and loyalty. Consistently delivering value and providing exceptional customer support further solidify these relationships, creating a positive association with the brand.
Identity
Appealing to a common identity is a powerful way to utilize the liking principle. For example, brands that align with a specific socially beneficial goal or belief system that resonates with the target audience can develop a sense of shared values. This strengthens the connection between the brand and consumers, making them more inclined to choose that brand over competitors.
Conclusion
The principles of reciprocity and liking are powerful forces in the world of business communication. By understanding the psychological factors that influence why people trust those who have done them a favor and those they know and like, businesses can enhance their sales and marketing strategies.
In addition to these principles, there are four more that are widely used in marketing and business to increase the likelihood that a consumer chooses a particular product. The explosion of e-commerce has resulted in today's market being an attention economy, and using subtle marketing techniques provides a crucial advantage in that market.
