Season 5, Episode 1
The Psychology of Marketing (Consumer Behavior 101)

Jan 8, 2024

The psychology of marketing is often overlooked, but the truth is that people act on instinctual behaviors. Learning how to harness the power of these biases can contribute to major growth of your business.

The psychology of marketing is often overlooked, but the truth is that people act on instinctual behaviors. Learning how to harness the power of these biases can contribute to major growth of your business.

On today’s episode of “Marketing Matters,” Morgan and Sarah are discussing what consumer behavior is and how you can implement different aspects into your marketing strategy. We’ll discuss a few different biases that humans have, and give examples of how they are seen in businesses everywhere.

Highlights:

  • What is consumer behavior?
  • What are consumer biases that every business should know?
  • How can you implement consumer biases into your marketing strategy?
  • What is A/B Testing?
  • Why is consistency important?

Resources:

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Sarah Roberts
We’re excited to be bringing you this podcast produced by our company, ADV Marketing. ADV Marketing develops high quality and cost effective marketing materials for a wide range of businesses. Our relationship driven business model and customized marketing solutions makes us the perfect partner for small businesses looking to grow. I’m Sarah, creative director at ADV Marketing. Join me here with the rest of my team on Marketing Matters every other Monday to discuss business to business marketing topics. Now let’s get into the episode.
 
Morgan Hutcherson
Hi, everyone. Welcome back to Marketing Matters, Season five, where we talk about everything business related, not business related.
 
Sarah Roberts
Marketing related. I trust you with the info and look what you’ve done.
 
Morgan Hutcherson
I just got done filming a video guys. So now I’m like too in my head about what I’m saying.
 
Sarah Roberts
Yeah, but it helps us relate to our clients.
 
Morgan Hutcherson
Yes, we understand when you all make mistakes, when we’re filming videos and can’t get the words out, because I cannot either
 
Sarah Roberts
You did fine,
 
Morgan Hutcherson
But even introduce us. I’m one of your host, Morgan Hutcherson joined here with Sarah Roberts today.
 
Sarah Roberts
Hello, everyone. If you haven’t already seen us before, that
 
Morgan Hutcherson
This would be a great episode to start with.
 
Sarah Roberts
It would. It would, really. Okay. What are we talking about today, Morgan.
 
Morgan Hutcherson
Today we’re talking about the psychology of marketing and how consumer behavior falls into it, which I think you’d be surprised when people say consumer behavior. A lot of them just associate it to business, to consumer marketing. But a lot of these techniques we can use in business to business marketing.
 
Sarah Roberts
Yeah, because they’re innate human instinctual biases and behaviors. And it is psychology, which I know, like a lot of people’s eyes glaze over. Okay? A lot of engineers eyes glaze over when you think of psychology because of like soft science and all that. But they really are documented biases and they are generalized. So it’s not so much that you do this on the daily everyday. It’s that as a whole, human human beings have these biases and slants towards certain behaviors and actions. And if you’re looking to control and manipulate behavior as marketing does, that’s probably a really harsh description of what marketing does.
 
Morgan Hutcherson
Yeah, that’s a spoiler alert for later in the episode, but I feel like that’s a nudge. Or sludge towards marketing.
 
Sarah Roberts
Yes, those are important. But if you’re looking to control how people react to certain things, you want to know how they are going to automatically react to certain things so you can control that behavior and understand what goes into that.  So let’s cover what we’re going to talk about in each part of this podcast. We’re going to talk about consumer behavior and biases, and then we’re going to talk about the concept of nudging and sludging, and then we’re going to talk about how to incorporate these biases into daily practices of business. So let’s get started Morgan.
 
Morgan Hutcherson
Yeah, I guess. Do you want to just start off with what consumer behavior is? Because if y’all don’t know this, Sarah actually studies that and does research for on the side. So I feel like you’re really the resident expert in consumer behavior.
 
Sarah Roberts
Supposedly there’s better experts out there than me, but I do do side projects with A&M in the consumer behavior department. And what we’re going to talk about today are like fundamentals, like consumer behavior 101 stuff. And so we’re going to go over the key biases that if you walk into a consumer behavior class, we’re going to talk about these, especially if you’re getting a marketing degree this year. They’re going to talk about these things in class. So every business owner should know these. So a business owner who hasn’t taken a marketing class should know these going into thinking about what their messaging in their content strategy should be, consumer behavior as a whole is how consumers in general react to things. And there is a big psychological component to that. So we’re going to talk about a couple of things. We’re going to talk about choice structure, choice, hierarchy, and then decision fatigue. We’re in talk about scarcity and loss aversion, confirmation bias, mere exposure, and then more having to do with choice, hierarchy and anchoring. So that’s where we’re going to go. MORGAN So let’s start with decision fatigue. And decision fatigue happens to all of us, regardless of what you’re buying or what you’re purchasing. And in business business, you really are talking to people. It’s people talking to other people. So regardless of what levels they have to go through for approvals for the decision you want them to make, they’re going to face these biases and these behaviors. One of them is decision fatigue. If people are confronted with too many options, they will not be able to analyze those options, well. The human brain does not digest that information very efficiently.
 
Morgan Hutcherson
Yeah, you know what I think about whenever I think about decision fatigue, like a really good example, the Cheesecake Factory menu is like pages long, and I feel like any time I go there, I never know what to get because I’m just like, Well, everything sounds good, but also doesn’t sound good at the same time because there’s just so many different options and it’s all just spread out.
 
Sarah Roberts
Yeah, and in ethical marketing, we do want people to make the optimal decision for themselves. And the whole problem with decision fatigue is that if you give them too many options, they probably will not make the optimal decision because they’re going to be overwhelmed and that’s with anything. So you have to if you’re presenting consumers with options, you should do research ahead of time and know what their optimal options are and present them in a way that is clear and not overwhelming to them.And that’s like that is present on your pricing page, on your services page overall on your website, that’s a really big deal because if they’re overwhelmed on your website, they’re going to shut down and then they’re going to leave the website, which is not the goal.
 
Morgan Hutcherson
I was going to say a good way to do it on websites is just categorize, especially give a lot of services, categorize them by different categories of services so that way they can go to that page or go to that section and find exactly what they’re looking for and then you can have the benefits and all that for each service laid out there.
 
Sarah Roberts
Yes. And Morgan obviously read the book or was taught from the Book of Nudge. I think it’s called Nudge  We will link that information in the shownotes
 
Morgan Hutcherson
I think actually I did a different book when I took a consumer behavior class.
 
Sarah Roberts
It was probably really related.
 
Morgan Hutcherson
It was related we will link bother of our books.
 
Sarah Roberts
Yes, we’ll link both of them, categorization is the key. It is the solution. Capital THE. The solution to decision fatigue is categories. So that’s where website structure, like Morgan just said, comes into huge play with that easy, easy implementation of a very widespread bias and fatigue. Okay so we have decision fatigue. Next, we’re going to be talking about scarcity and loss aversion. Scarcity and loss aversion are very, very powerful, especially we’re filming this during the holidays. And if you pay attention, it’s like all scarcity. Like we just went through Black Friday, which in itself is a time period of scarcity, if you like. The sales are immediately going to go away.
 
Morgan Hutcherson
And you get so many emails, it’s like 24 hours left, 12 hours left, final hour, and you’re like, I have to buy all my Christmas presents or whatever I want on sale right now.
 
Sarah Roberts
Yes. And loss aversion is important to consider if you’re like writing email, subject line, like we just gave examples of it’s a great way to capture our attention. This is also in play with trials. So when we talk about B2B, a lot of times B2B incorporates some sort of software service or like trial periods because people have to pilot things before they get full buy in.
 
00;07;25;03 – 00;07;48;11
Unknown
When you pilot, it’s a great opportunity to take advantage of loss of aversion because when people own something, they value it higher. It doesn’t matter what it is. If they have it in their possession, it is more valuable to them purely from the fact that it’s in their possession. So if they have your program service product in a pilot, they’re going to value it more because they possess it in the moment. So trials and pilots are really a good strategy.
 
Morgan Hutcherson
Yeah, that is true.
 
Sarah Roberts
Okay. That was number two. We’re flying through these, but we’re going to link resources where you can learn more, confirmation bias. This one we’re going to spend some time on because it is huge and really, really important for understanding why messaging control is so important. So confirmation bias is when people form a first impression and then after that first impression is formed, look for ways to confirm that their first impression was right. And this is not just for first impressions. This is like if you have a certain belief or value about the world, you’re always going to look for reasons that confirm that and you’re not going to seek out contradictory information automatically. A way to fix confirmation bias is to force yourself to look for contradictory information, but you have to force it. It is like it’s not going to come automatically, or instinctually to you. That’s confirmation bias. This is important because when we have a crappy website, that is it first impression and that is a brand impression, which means that that person is seeing your brand as something that is outdated, messy, unable to update a website like not willing to put in the investment in their overall appearance. So with that, once you form that impression, it’s really hard to get rid of that impression
 
Morgan Hutcherson
And that definitely may not even be the case. On why they’re not updating their website. They may just be so busy with work that that’s not their priority, but people are still going to be like, they’re not updating it, there’s not relevant content. Why would I work with them? And they’re going to lose potential business because of it.
 
Sarah Roberts
So that’s another bias that’s different, but very related to confirmation bias, that’s I can’t remember. There’s a term for it. I can’t remember what it’s called, but it’s where you ascribe the reason someone is behaving some way as a personality trait and not as an environmental trait. So the classic example is where you’re driving down the road and someone like changes lanes automatically. You’re like, That person’s a maniac. When reality there might have been something in the road like it and it was a knee jerk reaction to save themselves. But you don’t think that. You think they are crazy. You’re not. they were just watching. They were just being careful. Like that’s not how where you automatically go. So when your website is crappy, then they don’t even think, they’re just going to do that next month. That’s, that’s what they’re doing now. They’re going to think that company can’t even find the resources to invest. So yeah, so that one’s really important. Mirror exposure is the next bias we are going to talk about mirror exposure has to do with incremental exposure, it means your trust in like something more. So social media is a pretty good example of this because when you’re scrolling through social media, if a social media campaign is run correctly, you’ll see things over and over again. Once you see things over and over again, you’re more likely to trust them just from the fact that you recognize them. That is really big in any marketing campaign is you have to be present. And once you start building awareness and recognition, that’s why awareness is so key. Then people are more likely to trust you the next time you say something.
 
Morgan Hutcherson
Yeah, I was going to say it’s like the buyer’s journey and business to business. Sales cycles are so long, so obviously you have to be kind of there and reminding them like, Hey, we’re doing this. Like we really think that you would find our services useful and all that. So having that, I don’t know what I am trying to say
 
 
 
Sarah Roberts
Incremental repetition
 
Morgan Hutcherson
and just saying like, okay, here’s a little bit information about just the industry in general and you work into that like we’re going to post a case study and I’m going to post a PDF about our services and you slowly build them into that buyer’s journey.
 
Sarah Roberts
Yes, this is a lot of what we talk about with the artillery part of our marketing. Go watch. Our marketing is the military or one of those episodes that we’ve done. We can also link that
 
Morgan Hutcherson
We’re going to have a very long shownotes
 
Sarah Roberts
I know, that is the artillery. Artillery, really it’s mere exposure. It’s exposing people so that when your sales people make calls, they recognize you and are much more receptive to that salesperson than if they didn’t have that. That’s mere exposure. One more we’ve talked more about choice hierarchy. So the way you structure choices like we talked about at top at the very beginning of this section, it’s really important for how people process the information. Anchoring is when you compare one option to another option and how you perceive that other option is based on relative to something. So an example would be you’re looking at a pricing page and there’s three tiers of pricing. Pricing is going to be anchored to the lowest or the highest amount. So it’s going to be judged relative to like what you anchored their original perception to be. So you have to be really careful about what you price your lowest priced option as, because if there’s a big difference between your lowest tier and your next like tier two, it’s going to make tier two look really expensive, even if it’s cheaper just because it’s right next to a cheap option. So you have to control the comparisons and you can think of another I know there’s more anchoring examples. They’re like everywhere. It’s like literally every menu is an anchoring example.
 
Morgan Hutcherson
I know that this is probably also a different bias. When I remember in my class, but if there’s like options and they’re like, there’s one that’s just you get this and then there’s another that’s like, you get this, plus this, and then another one is like, you just get this other option. People are more likely to go with the one that’s like a combo.
 
Sarah Roberts
That’s the straw man. So that’s building up an outrageous option to make the other options look more realistic, even if you’re asking for more. So if you have like, I don’t know, I may have to do some math. If you have like an $80 digital media package, right? Like something like that, you get something for $80 and then you say, or you could spend $80 on digital media and print media. They’re going be like, Obviously, I want the thing with more for the same amount. You built up that straw man for the other ones, make the the other option look better. So it’s a way to nudge people towards the actual option you want them to pick. Yeah. With choice hierarchy, you have to know what your main objective is and what your like, main action is because you have to structure all of the other choices around it to lead to that option. So it’s really about knowing who your client is and what the best option for them is, because that will affect it.
 
Morgan Hutcherson
That is so true.
 
Sarah Roberts
Okay. Should we take a break now that we went through like all of consumer behavior in 10 minutes minutes.
 
Morgan Hutcherson
Yeah, I think that’s a new record for us
 
Sarah Roberts
I know, we really blew through that one. But like we said, we will have resources linked in the show notes. If you’re interested about any of those. There’s so many really interesting psychological studies that were done on all of these biases, and they’re pretty crazy. So they’re really fun to read about. But otherwise, we’re going to take a short break. And then when we’re going to come back, we’re going to talk about how to integrate all of those biases into practical marketing tips. So we’ll see you soon.
 
Morgan Hutcherson
Welcome back, guys. So as Sarah mentioned right before the break, we’re going to start talking more about how to incorporate consumer behavior into your marketing. So I guess one of the biggest things that we do at ADV marketing, but also just in general people do in marketing is AB testing.
 
Sarah Roberts
Absolutely. Yeah. AB Testing is like one of the easiest ways to incorporate finding out how your audience ticks and then leveraging it.Examples of this that we do often are subject lines for emails. Honestly, you can do anything about an email because they’re controlled messaging and you can also segment audiences really easy, which are really the two ingredients with AB testing. So anything in emails and then websites. Also, if you have the right platform and hosting, you can AB test and they can switch out certain versions of like a landing page or a product page and figure out which one is leading to the action that you want. You have to be careful. If you’re a B2B company, then lead generation is your key and usually there’s a lot of touchpoints before they click like a contact form. So you have to really know what your consumer journey is online, But websites are a great channel to do AB testing too organic social media is hard. Usually you do AB testing through paid channels, so if you do a paid campaign on LinkedIn, you’re definitely going to be able to do AB testing. And that is like every single campaign, AB testing incorporated in some way because it’s about optimization. But going back to what AB testing is and how it should be structured, you should have a reason for why you’re changing things between choice A and choice. B and that goes back to consumer behavior. So you want to have, for example, email subject, lines that differ based on scarcity or no scarcity, and that’s your reasoning behind it. And then once you get the results, then, you know, scarcity really works with my audience or it doesn’t. And you always want that optimization option in your campaign that you’re running. What can you think of for other AB testing that we’ve done?
 
Morgan Hutcherson
Well, just for a paid ad, I recently did it. It’s not really back to consumer behavior like the topics we talked about, but even just changing out content type is something I did. I was like, Would this be better in a just single graphic or in a slider post graphic on LinkedIn and compared those two with the same relevant content on both?
 
Sarah Roberts
Yes, it’s really important to have a reason why you’re changing between A and B, like a like a thesis almost. Yeah. Experiments. Like, I think this will do better because you can scroll. Like that kind of thing.
 
 
 
Morgan Hutcherson
Yeah. Yeah. I was torn cause I was like the sliders post on organic content does really well for them, but I’m like with it being a paid ad and we’ve talked about this before, you can already tune it out because it just looks different on LinkedIn. And so I was like, maybe a graphic would speak to them more with the highlighted text.
 
Sarah Roberts
Yeah, so that’s a really good thesis. One that one other really good one is called Actions.
 
Morgan Hutcherson
Yes.
 
Srah Roberts
That is like you can really leverage several things with consumer behavior and call to actions, but call to actions for those who don’t know are like the last few phrasing that like read now download now like the action that you want people to take out of a piece of content.
 
00;18;25;04 – 00;18;42;01
Unknown
And so changing that up and see which one works best for your audience is really nice, especially having the data to know which ones are optimized. Because when you’re writing like a ton of social media posts or emails, it can be hard to know like, what do I tell them to do? Like is click now compelling? I don’t know.
 
00;18;42;05 – 00;19;08;02
Unknown
So you can AB test that and see which one works best. Yeah. most importantly. So like I said, up at the top, I think I should have set it if I didn’t , but I’m just going to clarify these consider behavior biases that we went over are generalized behavior, right? They apply to a vast population and it’s like on average or in most cases people do this and it’s the slant of the human species as a whole.
 
00;19;08;04 – 00;19;38;21
Unknown
If you’re marketing correctly, you’re not marketing. Well, for B2B to be if you’re marketing correctly, you’re not marketing to humans as a whole. You’re marketing to your ICP or your ideal customer profile. They are specific types of humans and you’re going for a specific type of market. They might behave differently. I have had cases where I really, really thought an audience would behave a certain way based on standard consumer behavior principles, and they didn’t because that was just the audience that was dealing with AB Testing can give you that clarity into that
 
Morgan Hutcherson
Yeah, And I mean, we talk about a lot too, because we work with technicians or ICP is engineers and technicians. They just in general have a different way of thinking and it’s not bad, but sometimes you do want more concise, straightforward messaging, whereas other marketing tactics want more fluff.
 
Sarah Roberts
Yes, and that’s really all about expectations too. So your audience might expect something from you. And if you deviate too much from those expectations, that’s another that’s another consumer behavior thing. If you deviate from expectations too much, people don’t like it. And it has to do with like your intentions and like what they expect you to do. And if you went above or below expectations, it’s a whole deal. There’s a lot of subject matter on that, but you have to manage those expectations. It’s super important. You also know what expectations you’re dealing with. Okay, so that’s AB in general. That is an immediate thing that you can implement now for a lot of things. Consistency is also really important. It’s a key takeaway out of this episode from the confirmation bias and from the mere exposure conversation that we had. It should be clear that the impression you make sticks and if you control that impression, you don’t want to deviate from it. You want to be consistent in who you are as a brand. Yeah.
 
Morgan Hutcherson
Make that content schedule.
 
Sarah Roberts
Yes, truly. And then also stick to your key objectives and have a central focus because it’s a lot easier to be consistent if you know what you want to be. It’s a lot harder to be consistent if you’re constantly changing.
Yeah, that should be a quote.
 
Morgan Hutcherson
Well, you can quote it now
 
Sarah Roberts
Because I said it out loud on camera. Okay. Wow. So that was a lot. Consumer behavior is so interesting and so fun to know. And it really is part of the reason why marketing is so fun and engaging and like, really worth knowing and it brings you closer to your audience. So I hope that everyone had a key takeaway out of this episode and walked away with a little more information about how they can understand their consumers better. But overall, I think we’re going to wrap it up more. Yes, I think we’re going to come to a conclusion. So this was a great first episode of season five. Be sure to subscribe, rate the podcast, and we’ll see you again so soon. Thanks, guys.
 
Morgan Hutcherson
Bye
 

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