Keep Customers Hooked With These 2 Simple Psychological Principles

Marketing is all about psychology.

To really make a connection with someone, to bring your brand into their consciousness and make sure it stays there, it helps to understand what makes them tick.

Marketers have been leveraging basic psychological principles and tendencies for decades, and in the digital age, a psychologically informed approach can still give you an edge.

Two simple psych principles you can use to get more engagement with your ads include FOMO (fear of missing out), and the “decoy effect.”

You've probably heard of FOMO.

It's essentially a modern incarnation of the “theory of scarcity.” The harder something is to get, the more people want it.

The “decoy effect” is another longtime staple of marketing strategy, especially for pricing.

Chances are, you see it on a daily basis.

In many cases, it's the key to making a bigger sale.

A recent blog post from Wishpond explains FOMO and the decoy effect in detail, including how and why they work so well.

FOMO

FOMO, or the Fear Of Missing Out, is a part of the theory of scarcity. It states that people tend to attach more value to items they believe are scarce, and lower value to items available easily. That’s why people make impulse buys when stocks are running out.

[image source: Wishpond]
Ecommerce companies display the number of items available in stock for this very reason. Businesses of all kinds use limited period sales offers to meet sales goals.

Actionable Takeaways:

Create content resources that are restricted to a specific number of copies or are available for a limited period of time.

Use FOMO when marketing your products, services, events and webinars. Webinars have seat numbers limited by the hosting platform and plan you’re using. Make the most of that limitation by advertising it on your landing page and promotions.

[image source: Wishpond]
Decoy Effect

This psychological principle is primarily used in pricing. Most pricing models since the 1920s have been created considering consumer psychology.

Dan Airley discusses the Decoy effect in his well-known TEDTalk, “Are we in control of our own decisions?”

[image source: Wishpond]
In 2009, The Economist introduced new subscription packages. This is what they offered:

Online subscription: $59

Print subscription: $125

Online and print subscription: $125

Wait a minute… The print-only subscription costs exactly the same as the print + online subscription? Why would they do that?

Ariely asked 100 of his students at MIT to choose between the subscriptions, and most of them picked the combination offer. But when he removed the decoy, they picked the Online subscription offer.

Actionable Takeaways:

If you want to boost conversions on a landing page by offering two options, you might want to consider adding a third.

If you are a Saas business, you can offer different combinations of features at smart prices. You could even indicate what your most popular plan is, if your pricing strategy works out as planned.