6 Psychology Studies With Marketing Implications

May 3, 2013

6 Psychology Studies with Marketing Implications

In university, I chose to major in psychology because, the way I saw it, psychology is

relevant to pretty much every career path.

Psychology is the study of human behavior, and there are very few jobs in the world

that dont have to do with human behavior. Unless your job is to count every grain of sand

on a desert island, youre always going to be dealing with people.

In no field is the overlap between psychological theories and real-world applications more

apparent than marketing. The aim of marketing is to influence human behavior, and you

cant begin to do that if you dont understand how humans behave.

Here are six landmark experiments that reveal key insights about human behavior and the

psychology of marketing.

1. Regans Reciprocity Experiment

Reciprocity the idea that if I give something to you, you feel obligated to give something

back to me is a fundamental part of human nature. Noted paleontologist Richard Leaky

said that the urge is so deeply rooted, its the essence of what it means to be human. And

social psychologist Robert Cialdini identified it as one of his 6 key principles of influence.

In 1971, Professor Dennis Regan at Cornell University demonstrated the power of the

reciprocity principle in what was ostensibly an art appreciation experiment. In the

experiment, subjects were asked to rate paintings with a partner, who was in reality a

research assistant.

Halfway through the exercise, the research assistant would leave the room and return a little

while later. For some subjects, he would bring back a soft drink. For other subjects, he

would return empty-handed.

At the end of the exercise, the assistant asked the subjects whether they would be willing to

do him a favour by purchasing raffle tickets from him. As expected, the subjects who had

received the gift of a soda were far more likely to purchase tickets, even though the tickets

were far more expensive than the soda had been.

So what does this experiment tell us about marketing?

If you provide something of value to your customers or your website visitors, they will be

far more likely to provide you with their business in return.

This concept is at the heart of inbound marketing. I offer you valuable content, and you feel

obliged to return the favour in some way.

Reciprocity is also relevant for link-building and relationship-building. If I link to your

website, youll feel more inclined to link to my website in return. If I re-tweet you, youll

feel more inclined to re-tweet me.

In short, effective marketing is all about exchange. If you give a little, youll get a little.

2. Freedman and Frasers Compliance Experiment

People generally like to remain true to their word. Years of psychological research show

that if you first make a small commitment to someone, and then that person then asks you

to make a larger commitment, you will be more likely to comply with their request.

A common explanation for this phenomenon has to do with cognitive dissonance. Once

you make a commitment to an organization, person, or cause, that commitment becomes a

part of your self-image. If you are then asked to further demonstrate your commitment, you

will be hesitant to renege because doing so would conflict with your new self-image and

create a dissonant mental state.

This time-tested truth is commonly known as the foot-in-the-door technique, and is

another of Cialdinis six principles of influence.

One of the first studies to demonstrate the foot-in-the-door technique was conducted in

1966 by Jonathan L. Freedman and Scott C. Fraser.

The researchers contacted California housewives by telephone and asked them if they

would answer some questions about the household products they used. Three days later,

they called again and asked if they could send a team of men over to go through their house

for two hours to manually take account of all the cleaning products.

Freedman and Fraser found that the women were more than twice as likely to agree to this

larger request than a control group that had not initially agreed to the smaller request.


Dont try to sell your potential customers on your product right away; get them to commit

to a smaller request first, like filling out a contact form, and then progressively ask for

more.

Nurturing a lead is a lot like nurturing a relationship. You wouldnt ask someone to

marry you on a first date. First you get them to commit to seeing you again, then after a

while to meeting your friends or your parents. Slowly, you ask for greater and greater

commitment until (maybe) the time comes to ask for a lifelong commitment.

Guiding leads through your sales funnel follows the same process. First you get them to

commit to giving you their contact information, then you ask them to subscribe to your

blog or to follow you on social media. Eventually, these progressively larger commitments

can lead to a sale.

The important thing is not to go for the gold right away. Get your foot in the door first, and

work your way in from there.

3. Kahnemans Framing Experiment

A key insight to emerge from cognitive psychology over the past few decades is that the

human brain relies on basic rules of thumb, or cognitive biases, to process information and

make snap decisions. Daniel Kahneman and his research partner Amos Tversky are

credited with discovering the existence of many of these cognitive biases through a series

of seminal experiments in the 1970s and 1980s.

One of these cognitive biases is known as the Framing effect. The Framing effect means

that people will give different responses to the same problem depending on how it is

framed or worded.

In a key experiment, Tverksy and Kahneman split participants into two groups and asked

them to choose between two treatments for 600 people infected with a deadly disease.

In Group 1, participants were told that with Treatment A, 200 people will be saved.

With Treatment B, there was a one-third probability of saving all 600 lives, and a two-

thirds probability of saving no one.

Presented with this option, which treatment plan would you choose? Most participants

opted for Treatment A the sure thing.

In Group 2, on the other hand, participants were told that with Treatment A, 400 people

will die. And with Treatment B, there was a one-third probability that no one will die,

and a two-thirds probability that 600 people will die.

In this group, the results were reversed. Most participants opted for Treatment B.

Note that Treatment A and Treatment B are exactly the same in both groups all that

changed was the wording. When the treatments were presented in terms of lives saved

(positive framing), the participants opted for the secure program (A). When the treatments

were presented in terms of expected deaths (negative framing), they chose the gamble (B).


Context is everything. How you frame the information you present on your website or in

your ads will change the way people react to it.

Obviously, you want to emphasize the positive effects of your product over the drawbacks

(like cost). But more than that consider the tone of the language you use on your website.

If its very business-like, youll put your users in a business frame of mind, and theyll act

accordingly. If its more personal, theyll be put in a casual frame of mind, and theyll act

in a different manner.

The type of framing you choose will depend on your goals and on what you are aiming to

achieve.

With your online advertising, consider varying the tone and the frame of your ads and

conducting A/B testing to see which is more effective. A very slight change in language

can have a huge impact on the decision process.

4. Kahneman, Knetsch, and Thalers Loss Aversion Experiment

Another cognitive bias related to the Framing effect is known as loss aversion: people feel

the negative effects of a loss more powerfully than the positive effects of an equivalent

gain.

If you won $1,000 tomorrow, youd probably be pretty happy. But your level of happiness

would be less intense than your level of unhappiness if you instead lost $1,000 tomorrow.

Loss aversion applies even for small-value goods. In a 1990 study, Daniel Kahneman, with

colleagues Jack L. Knetsch and Richard H. Thaler, randomly assigned participants to either

a buyer or seller group. The sellers were each given a mug and the buyers were given

nothing.

In subsequent trades, the researchers found that the sellers required significantly more

money to part with the mugs (around $7) than the buyers were willing to pay to acquire

them (around $3).


No matter how good your product is, your customers fear of throwing away their money

on it is always going to outweigh their desire to gain it.

There are several things you can do to help alleviate your customers aversion to parting

with their money. For example, you can offer a risk-free trial period or a rebate.

For e-commerce, consider how you frame your transactions. Loss aversion implies that

customers would rather avoid a $5 surcharge than get a $5 discount.

Also, be careful when initially setting the price of your product. Price increases are far

more likely to influence a customers decision to switch than price decreases.

5. Zajoncs Mere Exposure Study

Any publicity is good publicity. The idea behind this oft-quoted statement is that having

people talk about you, regardless of what theyre saying, beats having no one talk about

you at all. And indeed, a number of psychological experiments have demonstrated that

simply exposing people to something a name, a person, a product, a song increases their

positive feelings toward it.

Robert Zajonc demonstrated the power of mere exposure in a famous experiment in 1968.

He split subjects into two groups and showed them a series of meaningless Chinese

characters. He then told the subjects that some of these symbols represented positive

adjectives, and others represented negative adjectives.

The individuals consistently rated the symbols they had previously seen more positively

than the symbols they had not seen. Moreover, after the experiment, the group that had

been repeatedly exposed to certain characters reported being in a better mood than the

control group.


You can increase the power of your brand simply by exposing people to it.

Thomas Smith wrote a famous guide in 1885 called Successful Advertising that is still

often quoted today:

The first time people look at any given ad, they dont even see it.

The second time, they dont notice it.

The third time, they are aware that it is there.

The fourth time, they have a fleeting sense that theyve seen it somewhere before.

The fifth time, they actually read the ad.

The sixth time they thumb their nose at it.

The seventh time, they start to get a little irritated with it.

The eighth time, they start to think, Heres that confounded ad again.

The ninth time, they start to wonder if theyre missing out on something.

The tenth time, they ask their friends and neighbors if theyve tried it.

The eleventh time, they wonder how the company is paying for all these ads.

The twelfth time, they start to think that it must be a good product.

The thirteenth time, they start to feel the product has value.

The fourteenth time, they start to remember wanting a product exactly like this for a long

time.

The fifteenth time, they start to yearn for it because they cant afford to buy it.

The sixteenth time, they accept the fact that they will buy it sometime in the future.

The seventeenth time, they make a note to buy the product.

The eighteenth time, they curse their poverty for not allowing them to buy this terrific

product.

The nineteenth time, they count their money very carefully.

The twentieth time prospects see the ad, they buy what is offering.

Advertising is one way to expose people to your brand, but it is by no means the only

way. Blogging, social media, email marketing, podcasting these are all great ways of

getting your name out there.

The more presence you have, the more people will come to think positively of your

company, and the more business you will get.

6. Aschs Conformity Experiment

How much time do you spend thinking about what other people think of you? Be honest

its probably a lot.

Humans are a social species. Theres safety in numbers, which explains why we have such

a tendency to try to fit in. Psychologists refer to this tendency as conformity, and its been

demonstrated time and again in cultures all around the world.

In a famous 1951 experiment, Solomon Asch showed that group pressure can override even

the most obvious of facts. He had college students participate in a perceptual task along

with a group of other students, who were in reality actors hired by Asch who knew the true

aim of the experiment.

The participants were shown a card with a line on it, followed by a card with three lines on

it, labeled A, B, or C. They were then asked to say aloud which of the three lines was the

same length as the first line that had been shown.

Below is a sample of one of the cards the participants were shown.

Which line matches the length of the first line? Clearly, Line A. But what if everyone else

in the group said the answer was Line B? Would you stick with the evidence of your

senses, or go along with the crowd?

Asch conducted several of these trials in which all the actors in the group were instructed to

unanimously give the wrong answer. He found that a large percentage of the real

participants followed the majority in these instances. Only when one of the confederates

acted as a dissenter who gave the right answer did the power of the majority influence

decrease.


If social influence can cause people to ignore even the most obvious truths, you can bet it

has an effect on how people evaluate your business.

The more social proof you can attach to your website and to your brand, the more new

customers you will attract. This social proof can take the form of customer

testimonials, Twitter followers, Facebook fans, or blog commenters. If people see that

others are liking and interacting with your brand, they will be inclined to hop on the

bandwagon.

Its no coincidence that social signals now play a huge role in SEO. Google and other

search engines recognize the value users place on the opinions and actions of other users.

If you want to attract new business, start by building up a community of followers on your

blog and your social media profiles. Once you get the ball rolling, more people will start to

hop on board and soon youll have a dedicated and growing base of brand advocates.

Theres no magic formula that will turn somebody who wants nothing to do with your

business into a devoted fan, but these six experiments reveal fundamental truths about

human nature that you can leverage to your advantage.

Once you understand how your customers behave and what their basic needs, fears, and

biases are, you can start tailoring your marketing efforts around them.

And of course, remember that the goal is never to manipulate your customers, but to use

your knowledge of psychology to create a positive and meaningful experience for both you

and them.

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6 Psychology Studies With Marketing Implications