Today on the Demand Gen Pod, Episode 24, The podcast explored how psychology shapes marketing strategies by studying concepts like cognitive bias and social influence. It stressed the application of psychological theories in understanding consumer behavior. Techniques such as scarcity and social proof were emphasized for provoking desired actions. Emotional appeal in purchasing decisions was discussed alongside the impact of behavioral economics on decision-making processes. Moreover, the podcast delved into building trust and credibility by promoting transparency and ethical practices in marketing. It connected segmentation, personalization, and individualized experiences to enhance consumer insights. The importance of ethics in advertising was highlighted through a real-life example involving Google’s privacy issues. The role of emotions in driving consumer actions was exemplified through personal anecdotes, tying back to the significance of ethical considerations in advertising practices.
Summary notes from Episode 24:
Full Transcript:
00:02
Good morning. Welcome to the demandgen pod. My name is Ryan, and today we are talking about psychology and marketing. So, psychology plays this role in marketing and consumer persuasion by understanding how individuals think, feel, and make decisions. And we are going to chat about all of that today. So without any further ado, let’s get going. All right, so, you know, some key psychology principles that we’re going to cover, like cognitive bias, social influence, emotions, and decision making process. These are all really important to kind of understand, especially as you’re building content and thinking about how you might be designing your campaigns. A big reason for that is simply because we want to be able to make sure that we can understand. If we take one approach with our key demographic, what do we think those outcomes might look like?
00:59
So I think that a big thing here is focusing on maybe one or two of these, understanding how you can leverage them to drive some sort of influence. So let’s kind of get into some of the options here. Okay, so what about understanding consumer behavior? Some of these factors can include influencing our consumer decision making, like personal needs, desires, values, social factors, and external influences. And you can gain some different insights into consumer behavior through things like market research, surveys, interviews. You can analyze the data that you’ve been receiving on the behavior of your contacts. And you can also just do some other general consumer behavior research as well, some psychological theories and models, like theory of planned behavior, Maslow’s hierarchy of needs, the consumer decision making process.
01:50
These can all help to explain various types of consumer behavior and all really well worth looking into. Maybe we’ll do some episodes on each of those individually because I think they’re really fascinating. So what about the power of the persuasion techniques that we’re chatting about? You can apply these different persuasion techniques by using persuasive language influencing perceived scarcity. You can provide social proof and endorsements. You can use authority figures and build likability. So let’s break each one of those down just a little bit. Okay, some perceived scarcity, for example, discounts, limited time offers, and social proof could be things like testimonials, celebrity endorsements coming from authority figures. You can also have thought leadership figures in those positions as well. So I guess, like, maybe they’re celebrities, but like, I’m not talking about like, Beyonce coming on, your coming into your marketing necessarily. Right?
02:45
But that’s certainly one path that companies take. I mean, look at all the sponsorships that athletes get and musicians get. That is all part of that emotional pull to say, I want to be like that person, I want to wear what that person wears. I want to feel like I think that person feels. Now all of these, the marketing teams are thinking about when they’re designing these campaigns. Some principles also of scarcity, social proof, authority and likability can be effectively utilized by offering free samples, emphasizing limited stock, showcasing positive reviews, again featuring experts, and creating relatable content. We talk about relatable content a lot on this podcast because it’s very important to be able to be hitting your contacts, not even your contacts being paid or whatever the case may be, whether it’s email paid on your website.
03:42
I mean, like, the more that you know about somebody and the more that you can tailor their experience, the better off you’re going to be. And it’s true no matter where you’re looking to do it. What about the role of emotional appeal? So emotional appeal influences consumer purchasing decisions by creating a connection and evoking emotions like happiness or fear, love, excitement, nostalgia. You know, some really great things that have worked on me recently. I ride a motorcycle and I’ve been getting into, I want to get into, I shouldn’t say I’ve been getting into because all I’ve been doing is buying stuff, but I’ve been, I really want to get into motocamping. So basically you take the bike and yourself, maybe alone, maybe with some friends, and you either go to a campsite like you would car camping or you.
04:28
Ideally, although I live in Rhode island, which is a horrible state for open land because there basically isn’t public land that you can take a motorcycle on. But Connecticut’s really close by and so maybe ideally I’ll get to the point where I’m actually just riding somewhere into the woods somewhere and setting up a tent and setting a fire and all that stuff. Ideally a fire within a fire pit, forest fire. Anyway, you get the idea. So, you know, my hope here is that, I don’t know, I have some sort of new experience. I think that it would be a lot of fun, maybe a good opportunity to try to just step back from what I do every day, sitting in front of a computer and a camera and all of these things. You know, I definitely think that gets a little bit old.
05:09
I think that politics and news is taking quite an emotional toll on everybody over the past. Past. I mean, geez, a decade. So. So I think that’s kind of wearing down. So anyway, I’m kind of thinking about all these things and every time that I start searching for camping gear because really, moto camping is just camping. You just slap it on a motorcycle instead of a car instead of your back if you’re backpacking. Right. So it has to all fit on there. I’m now getting ads that are tailored to these, and I think that one of the best ones that I’ve seen so far has been Rei. And they are a camping store. I’m pretty sure they’re all over the place, but they’re definitely really popular here on the east coast. And, you know, with Rei, their ads are sort of tailored.
05:57
Like, it seems really clear. Either they, either they’re tailoring this or they just figured the vast majority of their demographic is my age group, active, looking for new adventure, ready to kind of have fun and laugh and kind of forget about everything that is going crazy in the world. And their ads really show that. And they definitely evoke emotion of happiness, they evoke emotion of love and excitement and definitely some nostalgia, too. And I think the nostalgia, and again, this is going to depend really heavily on you, but it’s still in there. It’s kind of around the experiences that I had as a kid camping that I haven’t really done as an adult, and I’m really trying to pull that back. So you can really target these emotions like joy or desire, fear of missing out. Right. Trust, and also emotional relief.
06:45
And you can target these specifically to different people, depending again on what you know about them. So, yeah, paid may have to be kind of broad, but you might be able to say, that there are certainly different types of camping. And certainly with paid advertising, you could target different ads to people who are subscribed to different types of channels. So if you’re subscribed to more or have watched different channels that are specifically around backpacking versus, like, moto camping, then you could have slightly different ads that are showing up there. And, you know, you can also translate that over.
07:18
If you are an online retailer, you can certainly translate over to email by being able to show things that are relevant to what people have bought or have looked at online that have in their cart and they’ve left in their cart, put in their cart and deleted out of their cart. So you can do all those things and kind of figure out, how could I email these people and sort of bring back some of that emotion. All this leads, I think, to being able to tell stories and we can use those emotions to create these resonant marketing campaigns and tell moving stories. We can use imagery that elicit those emotions, like Rei did. I think they’re all on a beach or something like that, kind of running around and also align with the values that resonate with your target consumers.
08:01
I think I covered in my example as well. So, you know, there are lots of different ways you can do this, and it really just depends on where you are mentally at that time. And, you know, obviously none of the companies that we use, like the vendors that we use for any of the tools for the podcast or for our day to day work or whatever, they don’t know that about me, and they’re not going to, you know, I mean, no computer is like watching this video, pulling that in and adding it to a database somewhere that’s just not happening. But, and that’s okay. But specifically to various parts of my life, I mean, that’s just one aspect of what I do.
08:39
I have other tendencies that come along with the business side of things, and I have tendencies that come along with the personal side of things. Right. So I think that it’s really important to be able to, and possible certainly to split those out and be able to have some multiple lives and multiple focuses, both personal and professional, and then multiple within as well. So what about behavioral economics and decision making? So, behavioral economics impact consumer decision making by recognizing that we’re not always rational, and we’re not always sorry that we’re not always rational, but we are always influenced by biases and heuristics. Sorry. I had read my notes and realized I got that backwards. So we’re not always rational.
09:28
Actually, a friend of mine, I was texting with a friend of mine last night, and I was telling him that I was going to go on this camping trip. And he was like, that sounds awesome. He’s like, I have a problem of going in so deep to buying stuff. I kind of think that I’m like a bit of a money hedonist. That was hilarious, because I definitely kind of fall under that as well. I’m not always rational about the purchase that I make. I tend to be pretty off the cuff, actually, and just go for something and see what happens, certainly how I plan to, which should go great when I’m alone camping in the woods. But we are definitely influenced by biases. And I have a story, anecdotal story about this one, too.
10:13
I think that’s worth mentioning, where one of my other passions is watches, mostly more high end watches, I suppose. And a friend of mine is getting interested in them too. So I was sitting in his office the other day and were chatting about this. And he said, I was looking, I don’t really want to say the brands, but I was looking at this brand or this brand, and I said, you know, when I first started getting into this, and I’m sitting on forums and I’m looking at websites and I’m looking at, like, Reddit and whatever, I saw all this bias over brand a versus brand b, or why brand a isn’t cool, or why you shouldn’t like brand a and why brand b is better.
10:53
And it really changed my perspective for probably three or four years on that specific brand, which was just completely unfair because I eventually bought a couple of those, of that brand’s watches, and I actually really loved them. I thought they were fantastic. And so it’s really interesting just how much we think of our peers. And I’m actually using that term, like, really lightly because nobody on Reddit is my peer, but both peers and also even strangers, I guess, and their opinions, because you read something and say, oh, is it like, really? I didn’t think about that. Should I care about that? You know, should I care about the brand history? Should I care about why this brand loses so much value? Should it, should it matter? Should the, all these various different aspects of a watch matter to me?
11:44
Maybe they should, but they didn’t ten minutes ago, which is just so silly. But the behavioral economics and decision making involves all of these factors, and behavioral economics really impacts consumer decision making in general. It’s certainly not just me. By recognizing that we’re not always rational and we can be influences by, influenced by biases. And these biases that affect our choices can include things like loss aversion, anchoring social proof default bias, and also scarcity bias. So that’s certainly also something that has really impacted watch sales. But not to dive too deep into something that you may care absolutely nothing about are things like fear of missing out, social proof and scarcity bias. All three of those are really huge when you’re making a decision and they have a lot of influence on you that you just may not even realize.
12:36
And that spreads to lots of different places, especially when you get excited about something. So, I mean, you can leverage this, right? You can leverage insights from behavioral economics to nudge consumers toward desired actions by framing choices, simplifying decision making, and also offering incentives. And we even do this with our kids. So my daughter is five and she struggles really badly with getting ready in the morning. So we’ll pick clothes the night before. We’ve kind of tried everything. We’ll try to pick clothes. The night before, we wouldn’t pick clothes for the week. We did that. That worked for a little while, and we just kind of stack them in this, like a series of cubbies kind of in the house. And then she’d be able to go get her clothes for that day, and she would have already picked them for the entire week.
13:22
Except that you get to a day and you’re like, you know, I don’t really want to wear that. And I get it because that would happen to me, too. Probably. Probably happened to you as well. Like, wake up a day and you’re like, I don’t really want to wear that jacket today. I’m going to wear something else. Not a big deal. When we can make some quick decisions, but for a five year old, it’s kind of a big deal. So we started to push her to certain directions, sort of using some of this psychology, simply by framing her choices for her and simplifying her decision making. And then at times, we would offer incentives.
13:53
So, for example, if she couldn’t choose a shirt, then what I would do is say that she had four shirts that she wanted to choose from, and she would be losing her mind, thinking, I cannot choose which shirt I want to wear. Okay, let’s pick two. So now we have two shirts. Do you want shirt one or shirt two? I’d rather have shirt two. Okay, great. Put shirt one away. Do you want shirt two or shirt three? I’d rather have shirt two still. Okay, put that away. Do you want shirt four or shirt two? I think I want shirt four. Over shirt two. Great. We have just gone through an entire decision making process.
14:24
We’ve simplified it because rather than making ten choice or four choices, rather than having to make four choices, we are now making two choices, and we just have to make them a couple of times. And then the other way that we might offer incentives is like, I don’t know, maybe we get five minutes of a show or something like that before we get to the bus if we have time, right? Because this all takes up a lot of time. So again, I’m using psychology that we’re using with kids, but I swear this gets used in businesses as well. And you can absolutely use something like this in the business setting, too. So think about how you might use it. I’d also love to hear about how you think that you might use it, too, or how you are already using it would be great.
15:00
So what about trust and credibility? So businesses can establish trust and credibility with consumers by being transparent, reliable, delivering on promises and some factors contributing to building trust include honesty. Obviously, you have to be honest if you’re transparent, consistent messaging, quality products and services, positive customer experiences and ethical practices. I mean, all of these come into play when we’re talking about trusting a business. And I imagine that if you think about a company that if I say, give me a name of a company that you trust, most of these would be relevant. Maybe not all of them, but I would expect at least most of them. Certainly things like the positive customer experience and good product and services, consistent messaging, I bet that all of those are true.
15:47
So how can you take what you already experience as an individual and a consumer and apply that to your own brand? You can enhance transparency and ethical practices, and that can be done by being clear about pricing policies, respecting customer privacy, being socially responsible. You can promote how you’re socially responsible as well. And then all of this can get buried down into your segmentation and personalization. So you can align that segmentation and personalization to psychological principles by acknowledging that different consumer groups have unique needs, preferences and motivations. And you can use segmentation and personalization by tailoring that message, that offer and that experience to each of those specific target audiences, which is really cool. So as you start thinking about, well, what messaging would I provide? How is that messaging relevant in all these various situations?
16:44
And then how can we segment or that messaging and provide that experience? All in one go, right? All in one go. And then let’s see. So also, relevance and individualized experiences may play a crucial role, too, in consumer behavior by making consumers feel understood, valued and catered to. And before I forget, I would really appreciate if you have an opportunity to click and subscribe, whether you’re online listening on through a podcast, or if you’re on YouTube, we’re also on TikTok as well. So you can find us there, too. So, and finally, let’s wrap it up with ethics and responsibility. So some ethical considerations might include respecting customer autonomy, avoiding manipulation, protecting consumer privacy, and being truthful in advertising. Avoiding manipulation is kind of an interesting thing right now because there’s this huge lawsuit that Google has just lost.
17:42
I was just listening to it today, actually, that they had committed that when you went into incognito mode, your privacy was being protected. And so there is a degree of trust and expectation of trust that we have. Right. And what was actually happening was that, yeah, the browser wasn’t tracking you, so they weren’t lying about that, but all the websites that you went to go visit were using their tools, so they have Google Analytics and all the Google scripts that they leverage. And Google, by the way, is everywhere. I mean, their servers are being used. Data is flowing through their servers and they’re tracking all of that. So when you go to a website incognito mode, the website would track you. And when the website was tracking you, it would report that data to Google because they were using Google to track you.
18:35
And so everything that you thought that you were not being seen on, you were actually being tracked. And that’s not cool. So the brutal thing is that with Google, our lives are just ingrained in it and it’s pretty much impossible to escape. There was actually a really interesting. I wish I remember what the podcast was. I’ll see if I can find it. But there’s a really interesting podcast that I listened to of a journalist who tried to just eliminate Google out of his life, I think even just like for a few days. And it was almost impossible. I mean, couldn’t use, he couldn’t use basically any website because they all use Google Analytics to track. He basically couldn’t use his email. And then, and there were other aspects of his life that used Google servers that had nothing to do with Google.
19:19
Like the actual service didn’t have anything to do with Google or the product, but they were using their servers. And as he dug in and found that out, he also couldn’t use that. And it pretty much made him, I mean, stuck, literally stuck. Couldn’t do anything. Sit in the house. So it’s totally wild. So with that said, we’re going to wrap it up. Think of all these interesting ways that you can use psychology in your marketing and think of how you can do so ethically. I think that’s really important, but ultimately, the goal here should be to help your consumers and your contacts kind of see the light that you’re trying to show them. And you can do it in a way that is really interesting and focused on them and their emotions and feelings.
20:02
So with that said, we will catch you next week. Thanks for listening to the demandgem pod. My name is Ryan and we will see you soon. Our.