Five Psychological Principles To Guide Your Holiday Marketing Campaign

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Understanding buyer behavior and psychographic boundaries helps marketers better meet consumer demand and increase their profitability. If psychology has taught us anything in the past century, it’s that our perception of choice is actually fairly limited and easy to manipulate.

Edward Bernays infamously used psychoanalytics to get women in the U.S. to start smoking after portraying cigarettes as a symbol of emancipation, termed Torches of Freedom. In today’s world, AI can deploy algorithms to discover everything about your personal identity, from your political affiliation to your everyday behaviors.

Every ad we see on the internet plays into our cognitive bias in one form or another. Let’s explore how you can optimize your ad campaign using these five psychological principles to increase your sales this holiday season.

Urgency And Scarcity

‘Tis the season for holiday content and BOGOs. While holiday promotions appeal to the consumer’s bargain buying habits, discounts and deals encourage a sense of urgency (e.g. a sense of missed opportunity).

Discounts also limit the consumer’s propensity to research other items, especially if doorbusters and discounts are time-sensitive. Brands can further communicate a sense of urgency by advertising the scarcity of their products.

According to famed psychologist Robert Cialdini, consumers perceive an item as more valuable or favorable when they view it as scarce. Incorporate countdown timers on special promotions or calls-to-action, such as “Only two items left!” on landing pages to communicate a greater sense of urgency and value.

Remember these other principles of scarcity to maximize conversions:

Scarcity should communicate high demand, not limited supplies.

• Product urgency should be timely and not run year-round.

Social Proof

So how do you capture consumers who don’t bite on your BOGO bait or don’t trust your brand? Brand affinity helps your business sort through the noise and reach the customers who are most important to your business.

One way to cultivate brand affinity or loyalty is by providing social proof that your business is credible. Essentially, this follows the principle of peer pressure, or “If everyone else is using it, I should probably get one.” According to Vendasta, around 88% of consumers incorporate online reviews into their purchasing decisions, and word-of-mouth advertising is still a major influence on consumer buying decisions.

Here are some strategies to provide social proof this holiday season:

• Feature testimonials or reviews on landing pages.

• Share user-generated content involving holiday products on social media

Provide case studies on your website to nurture leads.

• Mention endorsements from influencers or sponsors in product descriptions.

• Acquire high social engagement on posts.

• Include user ratings and reviews in ad copy.

• Optimize Google reviews to display ratings on organic listings.

The Baader-Meinhof Phenomenon

There exists no greater social proof than the frequency illusion, or the Baader-Meinhof Phenomenon. The Baader-Meinhof Phenomenon occurs when the brain is exposed to a new piece of information and begins noticing it everywhere.

The keyword in that sentence is “notice,” because once the brain is exposed to something new, it either forgets about it or unconsciously watches out for it everywhere you go. Upon noticing this item, confirmation biases tell you that this item has now become sort of omnipresent among everyone around you.

This demands the need for ad copy with a strong headline and striking, Gestalt images that will attract user attention. Pushing paid advertisements and retargeting at people who view your website will leave your brand top-of-mind when purchasing decisions are made during the holiday season.

Paradox Of Choice And Compound Value

Ironically, offering consumers a greater selection may actually result in a paralysis of action. This feeds into the idea of missing an opportunity that consumers experience during a sale, except this bias has the inverse effect. Studieshave shown that offering people a smaller selection of items can actually result in more conversions.

Segmenting ad groups by audience boundaries will increase your conversion rate by meeting user intent. Capitalize on a lack of choice by providing related item categories before purchase to provide compounded value deals. For example, if someone is purchasing a shirt from your website, offer them matching pants at a reduced rate to provide compound value. This will appear as a great opportunity, and you’ll meet customers when they are at their highest intent.

Anchoring And Decoy Pricing

Brands often provide a side-by-side comparison of a product’s discounted price with its initial price. Using anchoring heuristics, consumers will believe the initial price of the item to be its actual value. Due to this, people will think they’re receiving a better deal, regardless of how reasonable the initial price was.

Many brands capitalize on compound value by deploying decoy pricing. Using our previous example, a product landing page could list three prices for purchase: the initial price of the shirt and pants individually and their collective compounded price. If the shirt was cheaper than both options but the pants were the same price as the compound value, then the compound value would seem like a steal. The pants serve as the decoy price and consumers will then opt for the most expensive purchase of the other two listings.

Essentially, brands often provide a third option in many promotions, which is meant to be useless. This strategy distracts users from researching the initial value of both items and creates a sense of urgency if the promotion is time sensitive.

Do You Suffer From Cognitive Bias?

As consumers, what we perceive as a good deal is not always what we think. As brands and business owners, we can leverage these simple principles to increase our holiday season sales when the competition is at its highest. Happy holidays, and always do your research before making a purchase this season.

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