Leveraging customer psychology can lead to massive profits

We are almost through our most recently imposed lockdown and move towards Adjusted Level 4 restrictions. For many companies, this has been a trying time with many companies – particularly in the restaurant and hospitality and tourism industries – experiencing very levels of distress. The coming months may prove to be busy ones for BRPs.

Companies outside of these industries have taken this time to reassess and readjust their business models to take advantage of the changes that the Covid-19 Pandemic has brought about.

One of the biggest changes brought about by the Pandemic is the shift in consumer behaviour. Companies who want to be successful in the new paradigm will have to leverage customer psychology to improve sales.

Fresh outlook
Two weeks ago, Turnaround Talk published an article which pointed to research conducted by EY. The research pointed out that the customer of the future is defined by a few unique characteristics:

• I am wealthy & healthy and want to spend after lockdown;

• I need to conserve my resources and rebuild my wealth;

• I need to remain isolated until the Pandemic goes away;

• We are all going to die so just spend; and

• I am young Covid Free and out of work.

Each of these client segments come with their own challenges and consumption characteristics. However, there are some common characteristics that BRPs need to build into their advice to companies:

• research points out that consumers are 90% more likely to do business with companies that they trust. This trust is built before there is any interaction with the company. This is done through brand association, experience, and social media. Do not ignore digital marketing and be responsive to customers when they ask questions. Current clients belong to the instant gratification generation, if you cannot answer a query in real time, the consumer will go to another company who can;

• health and safety are a priority. If your customer can purchase or consume your product/service in a socially distanced manner (through online purchasing), they will. If you do not have a digital marketplace, develop one. Given the duration and different strains of Covid-19, it will be a long time before we reach any real herd immunity. Ecommerce is a growing trend that is not going to change soon.

Where does that leave BRPs? As experts on strategy and managing distress, you have to guide clients towards making smart decisions that will help them manage their distress and return to profitability.

Leverage psychology
One of the key ways to achieve this is to leverage customer phycology.

• Novelty aspect. People enjoy the unusual. If you have a niche product, you can appeal to the love of novelty that’s within each of us. This is a particularly useful method when selling fashion items or marketing a product that has a specific appeal. One method of enhancing novelty and drawing in customers is to market a “limited edition.” This combines novelty with exclusivity, another lever that drives customers, giving the customer something they see as special and personal.
• The pleasure principle. Pleasure is a natural desire in each of us, and when we feel good about a potential purchase, we are more likely to buy. A customer wants to walk away happy with their new item or the service you’ve provided, so look for ways to assure them that buying from you will enhance their pleasure. Tell them how this will happen and why and emphasize the feeling that they will get from closing the deal.
• Human touch. Tell the reader a story, a human story that relates to the product or service on offer. Tell them how it enhanced someone’s life, how it made them happy, and make it clear that someone, somewhere has gained a lot by availing themselves of your services. When we see someone else satisfied and successful, we relate and aspire to that. Push the positives and make them feel real.
• Inspire curiosity. A neat and successful way of keeping your potential customers interested is to hold something back. Don’t tell them everything up front, but rather, create a tale that leads somewhere. As Five Channels reports, consumer psychology is about playing with “subconscious needs and habits to influence purchasing decisions,” and that has a lot to do with inspiring curiosity. From your home or landing page, ensure there’s something that makes the reader want to click further, and when they do you can give them that extra information they need to clinch the deal. This is a great way of providing consumer engagement, and it also works with the next point.
• The big build-up. Think about big consumer brands and how they handle a product launch. You’ll hear about the new product a long time before you see it. They build the anticipation by enhancing how important this product is going to be, what an improvement it is over existing or competing models, and why the consumer needs it. Tell your audience that there is something big about to happen, give them the feeling that what you’re offering will make a big difference to their lives. This is how the big corporations whip up a frenzy: Witness the queues waiting for a new-release Apple product, for example, eager to get their hands on it first. You can do this with your marketing and see how word of mouth works even in the digital age.
• Social proof. In the days before the internet, a new shop, service or product would gain momentum not just by traditional advertising, but by satisfied customers passing on their pleasure at this newfound wonder to others. Plus, then as now, any endorsement by popular celebrities or personalities is a bonus. It’s even more powerful now that we have online marketing as consumers look for social proof, i.e. proof that the product they are considering has standing in the social media world. This is what has given rise to the new breed of influencers, but you can do it yourself with careful planning and sensible online marketing.

While this seems like an arduous and time consuming task, it is a necessary project to implement because of what is at stake. Companies who can take advantage of this early on will see massive profits.