From online ads to TV commercials, you are inundated with persuasive images and messages from brand representatives, trying to convince you to spend more of your money. Marketers may not be scientists, but they’ve perfected the art of consumer psychology and know just the things to do to get your mind fixated on their company product, until you finally buy it.
In trying to make you spend more, what most companies do is exploit vulnerability; and trigger fear, uncertainty and doubt about your present status and possessions. While presenting the product or service as the perfect solution.
What tricks do companies use to get you falling head over heels with their offering and entice you to spend more? Here are the results of the research we’ve done, so you’re aware of them and be more in control of your spending habits.
1. The illusion of scarcity
People are inclined to want something more if it’s in short supply; and companies have mastered the skill of creating the illusion of scarcity to make you feel you’ll lose out. For example, an airline company or real estate agent will offer what sounds like fantastic deal and then add big-lettered notes under the price banner that says “just 5 more left.”
In a study conducted in 1975 underlining this consumer psychology principle, 200 people were presented with two identical cookie jars. One had 10 cookies, while the other one contained just 2. Surprisingly, the test subjects rated the near empty cooking jar more valuable than the jar that had 10 cookies.
2. Social proof
Most people will buy a product or use a service because others have done the same. It’s the principle behind TV sitcoms that often use canned laughter, so your brain tells you something is funny because you can hear other people laughing at it.
Another form of ‘social proof’ brands use to give you an illusion of value of their offering is a large followership on social media. But most of most brand’s followership on Facebook, Twitter or Instagram are actually “ghost followers”, which were bought and therefore unreal.
3. Use of nostalgia
Most companies use the services of business and consumer psychologists who understand your needs, hopes and aspirations. They know what to do to trigger a nostalgic feeling in you and get you sentimentally attached to the brand.
One example of this is creating the image of the perfect family in a charming and smiley family portrait. The picture naturally tugs at your heart strings and you start to consider the promises it brings to you. New research has shown when nostalgia is involved, people tend to put less emphasis on money and are more willing to spend more on purchases.
4. Use of anecdote
Have you ever wondered why everyone loves great writers? Because everyone loves great stories. They simply bring our fantasies and imaginations to life in a compelling way. This is especially true for people seeking emotional situations and those who enjoy thinking. For such people, persuasive testimonials are a powerful consumer buying technique.
5. Gift Cards
A simple way for companies to keep revenue in the business, is to offer gift cards.
When you’re offered a 35% return on a gift card, for example, it means you’ll make an average purchase of $135 on a $100 gift card. The gift cards can have a limited validity period, some might be lost and never used; while the company still retains the money spent on them. They gain more in the end; and it’s just one of many tricks companies devise to raise their profit margin.
So there you have it. Note, while most of these are underhand techniques brands use to make you spend more, they are actually very common. The trick for you is to find out what offers you real value, and stay in control of your spending habit. This way you can beat consumer psychology and be in control of your own shopping patterns!