Successful sales representatives know that to persuade customers to purchase, you must first truly understand how they think. The core of purchasing is invoking a certain emotion within your potential customer that will push them to make a purchase.
All businesses want to understand what motivates their customers as well as how they make their purchase decisions. Figuring that out though is a challenge in itself as every customer is unique. Every individual has their own likes, dislikes, values, motivations, desires, and aspirations. No one will fit into a neat little box. Despite this challenge, companies can go to great lengths to find out how their customers decide to purchase a product.
Behavioural economics is a branch of psychology dedicated to the subject. It is also known as buyer psychology. The subject holds many fascinating insights. While the “psychology of buying” may sound intimidating, be assured that a degree in psychology is not necessary to fully grasp the breadth of why people buy the products they do.
Here are a few principles, discovered by psychologists, in relation to consumer behaviour. These insights will be able to increase your insights into consumer behaviour.
1) Buyers make purchase decisions based on emotional impulses and facts
The human brain has two sides. people often describe themselves as either left brain or right brain as a result of this. The truth is that your grey matter isn’t so black and white. Although you might lean one way or another while making a purchase decision both sides are still working actively. Humans are not robots and therefore will never be able to make decisions solely based on logical factors, like economics (cost-benefit ROI analysis) or politics, for example.
Here’s an example that you could relate to in your everyday life. Put yourself in the shoes of a customer. You’ve just walked into the OPPO store near your home, for a browse as always, only to find that they have launched a new product, the Oppo Find X3 Pro. Its high-resolution screen, striking chrome colours, and heightened level of technology invoke something in you.
The excitement of bringing home a brand new piece of tech is titillating. That’s where you will likely stop and ask yourself, “Do I really need this product?” You go back home and commence extensive research. You compare your current tech to the new one as well as scour the internet for reviews. You sleep on it for a day or two (or just five seconds), then go on and make your final decision. This is how both sides of your brain work simultaneously for this purchase decision.
2) Buyers need their psyche understood
When carrying out purchase decisions, naturally, customers think about themselves and what they can gain from purchasing this product or service. As a seller, this means that you have to understand the customers’ perspectives. This can mean connecting with your buyer’s psyche to make them see the value in their purchases. A way to do this is by addressing the buyer’s concerns and directly answering the question lurking in their head, “What’s in it for me?” When you can definitively and convincingly answer that question for customers before they even ask, you have brought your potential customer closer to the sale.
Real Estate agents are the finest at this. Companies like Sime Darby Property for example know the value of understanding their buyer’s psyche. Every time someone is shown a potential apartment one of the first things they hear from their real estate agent is, “It’s got that balcony you wanted” or “It’s got a much larger kitchen than your last place!”
The showrooms and show units provide the client with a first-hand experience of how things could be by providing a tangible experience for customers to understand what they can gain. The ability to answer questions and resolve any doubts on the spot, bypassing the need for customers to research on their own, is a win as well. Studies show that the longer customers take to do their own research, the less likely they are to complete the purchase.
3) Buyers are naturally inclined to “fleeing losses” than “seeking gains”
When you point out to the buyer what they can potentially gain from buying your product, you are essentially asking them to take a leap of imagination. They have to picture themselves in a new and better place, after having bought from you. This type of imaginative and creative leap isn’t always easy to carry out and can be delicate. This can be seen in point two as well where we went through how people need their psyche understood.
Alternatively, after some discussion with your client, you may be able to pinpoint their pain point. They already have this very real pain point, something they live with on a day-to-day basis. By identifying this, you can actively show them how the product or service you are selling can remove this pain point for them.
By claiming that they will no longer suffer the existing pains that they currently do, you will bring them to a grounded reality based on the human notion of fleeing losses. Once they have the conviction that you relate to and understand this pain point and have the power to remove it, they can be more convinced.
The move by Fenty Beauty, for example, was a legendary one. The way Ms Robyn Rihanna Fenty opened her makeup line with a 40-strong foundation range (which has since expanded to 50) which included shades for everyone was distinctive. To add to that she actioned a marketing campaign that was as diverse as they come.
Fenty Beauty had reportedly made $100m in just over a month. Since then, Time magazine named it one of the 25 Inventions of the Year, and what is now known as the “Fenty Effect” took hold.
And with that cosmetic companies of all stature began extending their shade ranges to accommodate a wider variety of skin tones. Rihanna made forty shades the new standard. Anything less was deemed apathetic, anything more (brands are still desperately trying to outdo one another, launching 50, 60, and even 100 foundation shades), was celebrated as a trump card.
In the year since Fenty Beauty was able to dramatically change peoples experience when shopping for foundation. Many brands like CoverGirl, Maybelline, and Dior now carry 40 shades of foundation.
4) Buyers are instinctively suspicious
As they should be. They are well aware that most businesses have agendas of their own (to sell), and are naturally suspicious that these all forms of customer service and any form of convincing is part of a self-serving agenda that will not necessarily benefit the customer. This is the main reason why experts in selling preach the importance of establishing a relationship of trust and credibility. Consultative selling has emerged as a solution to overcome these natural suspicion barriers of buyers.
Sales is naturally an integral part for companies like Toyota, Honda, and others in the automotive industry. A part of mastering how to become a good car salesman is a whole other thing though. This means perfecting the art of identifying what your customers want and delivering on those expectations.
Most customers have a particular model of car in mind when they come into the showroom. They would have spent hours researching every feature of the car the days prior. This is often a road bump for salesmen as it can give the customer tunnel vision which can be difficult to get past.
The thing that makes a difference between a car salesman and a good car salesman is the way one tailors their sales pitch. The key ingredient to that is asking your client what they are looking for in terms of features, mood, and purpose. This leads to learning more about the client’s needs, wants, and desires. If they want one model of car that looks good and goes really fast, you can offer them similar options (to the one they’ve thoroughly researched) and thus provide a wider selection.
5) Buyers psychologically respond to facts and figures
Companies in the banking and insurance industries really are the prime example of industries that employs this tip regularly. When pitching to a client, salesmen tend to consistently present statistics to the customer. This assures the customer’s psyche and gives them the logical proof they need to make a purchase.
The logical side of buyers craves facts and figures – that’s why numbers (price, technical specifications) are featured prominently in brochures. As for the consumer’s psychological side, that relates dominantly with visual components and stories of past successes.
They say a picture is worth a thousand words, and that certainly rings true for sales reps. Graphs and charts can go a long way in closing the buying gap. To close that last bit though, they employ the use of past successes that resonate strongly with buyers. This is done so that the buyer can consequently picture themselves in the shoes of previous buyers, experiencing similar success. This is why case studies can pack a punch.
6) Buyers like to win
Psychologically, buyers are perked up by the prospect of somehow ‘winning’ the battle against the seller, by getting as much value as possible. Remember, value is not a fixed number – it is relative, depending on what the buyer has to gain and what they’re willing to pay.
As a seller, you want to appeal to this psychological need to “win” by demonstrating as great a value as possible, with respect to the price. This isn’t necessarily just about return on investment, there are plenty of intangibles at play as well.
Here’s a quick example. Consumers are more likely to buy something with a price tag ending in .99 than they are when it ends in .00, according to one study. In that research, scientists made all the prices in a catalogue end in either .00 or .99, depending on the copy participants received. They learned that people buying from the catalogue with prices ending in .99 bought more and spent more money than those with the .00 price tag ending catalogue.
Now, it may seem illogical since we’re only talking about a penny here, but, psychologically speaking, prices look lower when they’re slightly under that .00 mark. That’s why .99, .98, .97, and .96 price endings work so well (and why you’ll see them used often, especially for sale and clearance items).
It makes consumers feel as though they have “won” and nabbed a good deal.
According to Kit Yarrow, PhD, a consumer psychologist and professor of psychology and marketing at Golden Gate University, “What you’re really hunting for is the thrill of a bargain, which is when I think a lot of consumers make mistakes. For people, maybe they don’t even have something in mind, they’re just craving that feeling of being a successful competitive force shopper. In other words, they want the thrill of feeling like they scored a big victory.”
Associate Professor Karen Fernandez remarked that a lot of this is wired to evolutionary hunter-gatherer behaviour in humans that is simply hard to knock off. She said, “People want novelty. People like the fact they can hunt and find a bargain [that] maybe somebody else hasn’t found.”
Retailers have figured this out. Sketchers for example, when they have that very exciting sale that you almost can’t believe, know that they are turning up those competitive feelings in shoppers by limiting supply and creating a time clock. For when you are out being a consumer I know you relate.
On the days that you’re coming home with bags from Sketchers, Ajinomoto, and Danone adorning your arms at the end of your shopping day, your thought as you walk over to your car is, “I can’t wait to brag about these deals.” Bargain hunting creates dopamine rushes in consumers, as they feel an increased sense of control of the transaction – and retailers should know how to nudge along that “winning feeling.”
How should businesses leverage this?
Selling skills and the proper approach are critical to becoming a business with a keen ability to close sales. A key step is having a sharp understanding of the buyer’s psychology, their purchase decisions, and why people buy. We aren’t selling to robots – we’re selling to real people, with feelings, sentiment, and drive. By appealing to those factors, we can make your business more successful and close more deals.
Written by: iWisers
Read more: Are You Addicted to Online Shopping? Here’s What You Should Do
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