Your Guide To Understanding Buyer Psychology (With Tips)
Updated June 24, 2022
Companies are constantly developing more finely tuned approaches for winning customers and their loyalty. Buyer psychology has become a central consideration for businesses that want to enhance their marketing, branding and customer relations. If you're interested in better understanding the motivations of your clientele, you might benefit from reviewing the concept of buyer psychology. In this article, we review what buyer psychology is, why it's important and several tips for applying buyer psychology insights to your business.
Related: 22 Different Types of Psychology
What is buyer psychology?
Buyer psychology is an area of study that combines the insights of economics, psychology and communications. It seeks to understand how people form their beliefs about a brand and its products and how those feelings translate to purchasing behaviors. Buyer psychology represents an evolution away from overly simplistic ideas about buyer motivation and the value of company-sponsored marketing.
Previously, most businesses believed that straightforward economic reasoning drove consumer behavior. For instance, a company might have assumed consumers prefer its competitor simply because its costs are lower. That company would adjust its price and try to inform the public of its new rates with a traditional ad campaign. Today, businesses recognize that many other factors than price influence customers' thinking and that traditional advertising isn't the best way to change their minds.
Why is buyer psychology important?
Buyer psychology is important because it helps businesses develop reputations as authentic and engaging, meeting the expectations of today's consumers. Companies can use buyer psychology to study strategic problems from a variety of perspectives and create the products and brands that offer solutions. It saves organizations time and money as they embrace business practices that reflect how consumers actually make purchasing decisions, rather than guessing about their thought processes.
Buyer psychology is also increasingly important as more marketing takes place online, where consumers can research and review businesses and bypass traditional advertisements. If there's a gap between how a company presents itself and how it actually treats customers, consumers learn quickly and give other brands their attention. To align a brand's mission, product and user experience requires an appreciation of how consumers think and what they prioritize when shopping.
Tips for understanding buyer psychology
Here are some tips to help you understand buyer psychology so you can use it when developing action plans:
Treat emotions and facts as equally important
The cost of your products matters, but it doesn't matter more than consumer emotions. In fact, emotions often influence consumers more than cost. Here are several emotional dynamics that can be the primary driver of a purchase or of a refusal to purchase:
Love of a product: Strongly positive emotions can override concerns about cost and give your business more flexibility in pricing. If you feel you could introduce an exceptional product at a price higher than you normally would, don't immediately dismiss the possibility that it could be worthwhile.
Loyalty to a brand: Loyalty translates to repeat customers, which are essential for the success of most companies. Thoughtful customer service, consistent product quality and authentic voice all contribute to relationships where consumers might accept higher prices to support a trusted brand.
Disappointment: Consumers have well-defined expectations, often resulting from what a business promises them. Violating the agreement that a purchase represents creates deep mistrust that's difficult to overcome, even with great prices.
Feeling unappreciated: If customers feel unappreciated, they may incur substantial costs to communicate their dissatisfaction. For instance, consumers might spend time, effort and money driving farther distances to find the same car repair services they could get nearby if their local mechanic doesn't treat them well.
Use novelty to create value
The experience of something novel, or new, has a profound effect on people's memory. Companies that introduce products with surprising and creative features earn the lasting admiration of their customers. Even if your product isn't particularly innovative, you can emphasize its newness in your marketing efforts. If you operate an online store, consider having a page dedicated to your most recent releases. You can tag items as new on social media, or introduce multiple new products together to generate excitement among your customers.
Account for loss aversion
Loss aversion is a psychological principle that describes how many people put forth great effort to avoid the loss of something they value, such as money. When consumers lack confidence in the quality of a product, their aversion to loss affects their willingness to make a purchase. Quality guarantees and flexible return policies help reduce the anxiety buyers often experience while shopping.
Loss aversion can also function in your business's favor. If consumers believe your product has scarce availability, the desire to not lose an opportunity can motivate them to buy. Consider offering products as part of a limited release and ensure you're transparent about your inventory status by informing shoppers when you're about to sell out of a product.
Create a sense of communal action
People enjoy the sense of belonging that comes with taking part in communal actions or trends. Many businesses feature customer testimonials and reviews to give shoppers confidence in their products, but doing so also affects buyer psychology. When consumers see people they admire or trust enjoying your product, they become inclined to try it. This buyer psychology insight has contributed to the rise of social media influencers who create communities of their own and lead their followers toward trusted brands.
When possible, use communal language to invite customers into your brand. If appropriate, consider establishing partnerships with influencers and content creators who might review or model your product.
Read more: 51 Call-to-Action Examples and Why They Work
Turn product development into a story
Stories not only entertain people, but they help them make sense of the world and reason through decisions. When people can identify your brand as part of a larger narrative, they become attached to your success and perceive your brand as ambitious and relatable.
Most products have a story to tell that describes how a company recognized a problem, used creativity to find a solution and made a good or service that positively affected people's lives. The greatest asset of your product's story is that it's authentic. Your marketing and branding strategies become much simpler if you can communicate with your customers the difficulties and the achievements that brought your product into existence.
Meet short- and long-term priorities
Consumers often evaluate purchases using two mindsets. When thinking in the short term, they browse products to learn about possibilities and imagine the gratification a purchase would provide. When assessing the long term, they want to know a product can last for years and bring them enjoyment over time. You can address this feature of buyer psychology by emphasizing your product's durability and versatility in marketing efforts. Share testimonials of customers who've enjoyed your brand for a long period and communicate your commitment to customer support so shoppers can be confident their investment is sound.
Eliminate pain points
Pain points are features of a user experience that frustrate customers. Psychologically, they disrupt the shopping process and introduce doubt into transactions, resulting in lost revenue. For example, someone might want to purchase a sweater online, expecting the retailer to have a size guide. If one isn't available, the consumer likely doesn't risk ordering the wrong size and decides not to buy.
Ensure that every step of your customers' experience is as straightforward as possible by providing them with the information they need to make a purchase, including pricing structures, return policies and product specifications. Ask users about the pain points they've experienced and prioritize finding solutions.
Label your customers
People earn their titles, labels and qualifications when another person or institution grants them the distinction. This remains true for the relationship between companies and customers. If you label your shoppers in a way that reinforces their consumer identity, they become inclined to identify with your brand. For instance, a sports retailer might address its customers as "performance athletes" in promotional materials so that they adopt the mindset of athletes ready to invest in equipment and apparel. Determine the positive labels that apply to your audience and use language that enables them to fulfill that role.
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