How Consumer Psychology Can Help You Understand Your Customers Better

While the majority of marketers aren’t psychologists, they use techniques from consumer psychology to exploit our foibles as universally lazy creatures of habit who pine for a sense of belonging, prestige and specialness.

However, these applications are often surface-level or textbook-variety and don’t grasp at the psychological drivers that underlie our purchasing decisions, Dr. Jillian Ney, founder of the Social Intelligence Lab, said in a recent webinar by Target Marketing Magazine. 

Instead, marketers should “get to the crux of how we make decisions and identify the right biases and triggers to use in their work.”

Understanding how people make decisions

When we buy something, even if we view it as purely utilitarian, there’s an underlying reason for that purchase that’s larger than the product itself. For instance, why would someone buy a new mattress? Most people would say for comfort, but the real reason is to get a good night’s sleep and improved quality of life. 

Meanwhile, the canned response to why do we invest in getting a college degree? would be “to get a better job,” but the psychological reason for purchase is to have a better life, Ney pointed out. It always pays to dig deeper to understand your consumer’s motivations, not just the outcome they want to achieve with your product. 

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It’s the same logic as that behind the famous quote by Harvard professor Ted Levitt: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” However, marketing guru Seth Godin counters that Levitt’s quote doesn’t go far enough. 

A customer might buy a quarter-inch drill so they can drill a hole to mount a shelf, but the shelf still isn’t the end result, because nobody actually needs a shelf.  

“What they need is the way it makes them feel when their spouse comes home and thanks them for finally cleaning out the rec room,” Godin said at Social Media Week New York. “That’s what you’re buying when you go to the hardware store.” 

Heuristics/mental shortcuts

We use a lot of mental shortcuts when making decisions. We’re assailed with too much information and stimuli everyday, so our brains filter what’s important and disregard what isn’t. 

“The brain’s purpose is to make safe decisions about the future, but we rarely engage in purely rational decisions. It’s too time-consuming and exhausting for our brains,” said Ney, a digital behavioral scientist and the first Brit to earn a doctorate in social media. 

This means that more often than not, we lack sufficient context to make an educated decision and wind up confused, so our brains fill in the gaps – hence why marketing messages need to personalized, so there are fewer gaps to fill. 

“A brand is essentially a web of memories in your head,” said Ney. “It’s a range of stimuli, concepts and emotions that we associate together.” 

Emotions aren’t always rational or conscious, and we base many of our decisions on emotion, consciously and unconsciously. Furthermore, associations are entrenched by repetition; the more we hear a word or see a color associated with a brand the more likely we are to involuntarily link the two. 

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“What I would advise is find the memories and associations that your brand holds in your customer’s mind,” explained Ney. 

Our use of mental shortcuts explains why some household-name brands are stickier than others. In blind taste tests, 63 percent of consumers report a preference for Pepsi, but Coca-Cola continues to outperform, cornering 17.8 percent of the soda market versus Pepsi’s 8.4 percent, according to the trade publication, Beverage Digest.

Habits/ease of use

Exempting a select stratosphere of superhuman entrepreneurs, community activists and changemakers, human beings are change-averse, risk-averse creatures of habit. Hence why the most effective forms of nudge marketing don’t require people to exert any effort.

For instance, 15 states plus the District of Columbia have enacted automatic voter registration, residents in states like New York are automatically registered as organ donors unless they opt out.

The UK government is struggling to overcome consumer inertia with its ambitious goal of ensuring 85 percent of homes have smart energy meters installed by 2024 (recently revised from 2020). Doing so would help people track and economize their energy use while providing utility companies with data for monitoring and billing. 

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Utility providers are required to offer and install the devices in customer’s homes for free, but many people are refusing it despite zero upfront effort.

People aren’t accustomed to monitoring their energy use – using lights, showers and AC are such unconscious acts – that the idea of a meter that adds up their consumption (and calculates their bill) in real-time seems understandably daunting, even if there are cost savings to be had.