To succeed in crowded, competitive marketplaces – from the supermarket shelf to push-ads on social media platforms – marketers need to capture consumers’ limited attention. No mean feat with thousands of products vying for attention in the aisle and every post on a feed desperate to interrupt the incessant scrolling.
Marketing professionals often rely on the science – and art – of consumer psychology to gain an advantage in this space. They want the answers to critical questions: how do we identify and engage our target audience? How do we convince them our products will improve their lives? How do we understand which marketing efforts resonate with them? And, ultimately, how do we influence their purchasing decisions and encourage them to consume?
What is consumer psychology?
The American Psychological Association defines consumer psychology as, ‘the branch of psychology that studies the behaviour of individuals as consumers and the marketing and communication techniques used to influence consumer decisions.’
Combining psychological, social, emotional, and cognitive factors – together with concepts from marketing and behavioural economics – it explores how people make decisions about what they buy, how they respond to advertising, and how brand loyalty is established.
From a business perspective, the psychological factors and processes underlying consumer behaviour play a crucial role in making informed decisions to support activities such as:
- developing effective marketing strategies
- improving products and services
- optimising the customer experience
- boosting customer satisfaction
- selecting optimal pricing strategies
- building customer loyalty, trust, and retention
- motivating customers to purchase.
What drives the specific buying decisions of consumers?
Understanding the psychological drivers behind buying behaviour is critical for brands and businesses seeking better connections with their customers. Psychologically driven factors include: the fulfilment of basic needs and motivations (grounded in Maslow’s Hierarchy of Needs); how consumers perceive product information, brands, and ads; impulsive or emotional purchases; and cognitive biases.
The consumer decision-making process underlying purchasing choices however, goes beyond psychological factors alone. Understanding all the key drivers enables businesses to influence and satisfy the needs of their target market:
- Social factors and cultural influences – including cultural norms and values (preferences shaped by traditions and expectations), peer influence and ‘social proof’ (influencer marketing, reference groups, and endorsements), and lifestyle and family (a health-conscious family preferring organic groceries).
- Personal factors and demographic influences – including income and budget (low purchasing power making budget-friendly options more appealing), personality and identity (a ‘green’ consumer selecting an eco-friendly, sustainable product), age and life stage (an older consumer opting for durability and quality), and social class.
- Marketing and external factors – including product design and packaging (visual appeal of one product over another), branding and advertising (emotional storytelling), and promotions and discounts (loyalty cards).
- Situational factors – including seasonality and trends (athleisure clothing in January), convenience and availability (next-day delivery on Prime), and scarcity and urgency (exclusive ‘drops’).
How are emotions used to influence consumer behaviour?
According to UX specialists, Proof3: ‘while we like to think of ourselves as rational beings, emotions play a much larger role in our consumer purchasing decisions than logic does.’ As feelings shape much of our buying behaviour, businesses that successfully forge emotional connections have a better chance of engaging consumers, motivating them to buy, and retaining their business in the long term.
Here are some examples: creating a sense of nostalgia and comfort by reminding a customer of past experiences/positive experiences; drumming up excitement during a ‘Black Friday’ sale event; using fear to drive impulse buying through ‘limited-time offers’; establishing exclusivity and aspirational living through celebrity and social influences; creating a sense of luxury or status with a high-end, unique designer piece; or evoking compassion with a charity fundraising appeal.
Targeted marketing campaigns play a significant role in making consumers feel seen, heard, valued, and understood – which is why hyper-personalisation and user experience (UX) is such a key focus for today’s brands. It’s important to ensure attempts at eliciting emotions to motivate customers are authentic rather than manipulative; if executed poorly, businesses could take a hit to their brand reputation and trustworthiness.
How do cognitive biases affect purchasing behaviour?
Cognitive biases act as psychological ‘shortcuts’ that influence our decisions in all areas of life. When it comes to buying, they have the power to shape how we select items, process information, perceive branding and marketing messages, and justify purchases. Our biases can result in irrational and impulsive buying behaviour – which benefits marketers no end.
Here are a handful of examples of cognitive biases and how they can impact consumer attitudes and perceptions:
- The Sunk Cost Fallacy – continually investing in a product or service based on past investment rather than benefit (failing to cancel a gym membership that is never used because of money already “wasted”).
- The Framing Effect – being influenced based on the way information is presented (preferring chicken that is ‘85% lean’ rather than ‘15% fat’).
- Confirmation Bias – seeking information that reinforces existing beliefs and dismissing contradictory evidence (a consumer who believes the iPhone is better than the Samsung Galaxy only reading positive reviews of them).
- The Endowment Effect – overvaluing products and services you already own or have committed to (not cancelling a subscription through reasons of attachment rather than usefulness/benefit).
Cognitive biases impact us in all aspects of our lives – particularly when we are unaware of them. Brands use this to their advantage, leading us to buy products and services we may not have otherwise considered.
How can market research be used to influence consumer decisions and purchasing patterns?
Market research is a powerful tool in an ever-changing, increasingly complex, and saturated global marketplace. Calling it ‘the business of evidence’, the Market Research Society (MRS) states that it enables ‘the monitoring, measurement, and understanding of markets and societies in support of well-informed and evidence-based decision-making.’
It’s a highly valuable resource that establishes consumer needs, consumer attitudes, consumer perceptions, consumer choices, and consumer pain points. It uses various methods to do so, including customer feedback (for example, surveys and focus groups), competitive analysis, market trends, industry reports, social media listening, and product testing.
With these insights, brands can design products and services that meet expectations – and craft effective marketing campaigns to match. For example, messaging that appeals to emotions and desires, pricing strategies that consumers find attractive, and personalised recommendations (which can lead to repeat purchases and higher-value purchases). It helps marketers target the right potential customers, understand when they will be most susceptible to marketing stimuli, and reduce risks associated with unsuccessful campaigns and marketing activities.
Gain a deeper understanding of the workings of consumer purchase decisions
Keen to improve the lives of consumers and boost profitability at the same time?
Apply valuable insights into how people think and act to the world of business with Wrexham’s online MSc Psychology programme.
Enhance your employability with a highly flexible, 100%-online psychology master’s that fits around your professional and personal commitments. Your in-depth understanding of psychology could benefit you in terms of managing teams, motivating customers, designing campaigns, or any number of other professional ambitions. Alongside organisational psychology, you’ll explore topics such as psychological assessments, educational psychology, emerging technologies in psychology, neuroscience, forensic psychology, and clinical psychology.
