Why You Should Incorporate Psychology into Your Business Practices

December 9, 2014

7:00 am

How we behave, how we think, and how our brain works it all comes down to psychology. If only you could apply these principles to your consumers, you could bring in a lot more conversions for your business. But don’t you think you can? A lot of people simply aren’t familiar with the rules of basic human psychology. However, when broken down and applied to your business these tactics can work wonders. If you can hack into how your audience is thinking, you can crack the code to more sales for your business.

Behavioral Science

Each individual has a very unique set of behaviors, especially when it comes to interacting with and purchasing from your business. Behavioral science teaches us that not all users should be treated the same; they each have unique characteristics that affect their buying habits and psychological buying motives. Segmenting your audience so that each group gets a much more personalized experience can have awesome effects on your conversion rate.

By tuning in to each segment of your audiences unique needs you’ll not only gain more sales, but also lifelong customers. People are gratified by personal experiences, these personal experiences are what make people feel connected to brands. Commerce Sciences has a platform that uses behavioral science to analyze your customers based on over 40 different key points and automatically gives each shopper a unique shopping experience based on their personal needs. Matching your customers’ motives with a unique shopping experience uses behavioral science to predict the individual’s buying habits, and presents a tailored experience to fit their specific needs.

Less is More

The paradox of choice is a psychological concept that says that when you reduce the consumer’s options, you’ll greatly decrease their stress level as well. If you give your customers too many options, they’ll often choose none. When presented with a lot of options, buyer’s remorse is more likely to occur even if a decision is made, since there were so many other options that could have been considered. One of the great aspects of your business, however, is how many terrific options you offer.

Here’s what you can do: break it down for your users. Although your business has a lot to offer, you surely have different topics or categories under which they fit. Instead of showing every customer who lands on your page all that you have to offer (which can be quite overwhelming), funnel your consumers to the right places. By using a tool like Segment, you can route all of your customers to the appropriate and relevant parts of your site according to their demographics and interests. This way, users are only presented with a smaller chunk of the options you offer, and they’re relevant to them specifically. This relieves distress in decision-making.

Serial Position Effect

It’s been proven through several different psychology studies that when shown a list, we’re most likely to remember the things at the beginning and at the end of the list. It’s important when running a business to understand how the human brain processes information. This way you know where to place th key information that you want your users to know, and how to make them remember it.

This is a powerful rule you can use in nearly all of your sales and marketing related efforts. It tells you, for instance, on your landing page where to place all of your key information. Of course it’s all important, but you must decide if your audience is going to remember one thing from the whole landing page. That one thing is the item that you should put on top, in the headline. If your ad has a list of benefits for your product, think long and hard about which benefits you want your audience to stick with. Place those first and last. These are the key things people will remember about your business when they are exposed to it again.

Cognitive Dissonance

When our attitudes don’t align with our behavior, we experience what psychologists call cognitive dissonance. For instance, a person can believe that smoking is really horrible for you, but at the same time be addicted to cigarettes. This is an extremely powerful way to change behavior, because we hate that our actions don’t match up with our beliefs. So, this man either needs to change his attitude about smoking by justifying his actions (e.g. ‘my aunt was a smoker for years and she’s still alive”), or change his behavior by quitting smoking.

Since this is such a powerful tool to change behavior, use it wisely. Get your customers to perform a small task to engage with your business like downloading an app, playing a game, or taking a survey. Use a tool like SurveyMonkey, for example, to set up a relatively simple questionnaire to ask your customers about something relevant to them and your business. Once they’ve made this small commitment of time to your business, they’re more likely to stick with this committed attitude and follow through with whatever bigger request you have for them.

What other psychological practices do you notice businesses using? Are you aware of these mind tricks they’re playing on us? How else can we take advantage of psychological knowledge to improve our businesses?

 

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Yoav Vilner is the Co-Founder of Ranky.co. Yoav is a columnist for top tier media such as Inc Magazine, TheNextWeb and VentureBeat, and is wildly passionate about all-things-tech.

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