Selling stuff has come a long way since those guys who did the vacuum cleaner demonstrations.
Modern innovations in technology have pushed marketing light years ahead of where it once was. Furthermore, advances in customer psychology have provided powerful insights into what makes people tick, what makes people click, and how to get more customers to convert.
From my psychological research and practical experience in the industry, I’ve discovered a few of the features that massively influence modern customers as they make purchase considerations.
So, if the vacuum demo doesn’t work, don’t sweat it. I’ve got you covered.
These three features of the modern buyer will give you the actionable and psychologically driven sales tips that you need instead.
Why just three? Okay, fine, I could have listed 3,000. My effort is not to get all granular and detailed, but to provide the sweeping psychological considerations that have influence. Besides, I figure if I gave you three, you’d be more likely to remember at least one.
Let’s dive in.
1. Customers are more eager to gain value more than to save on price. Sell your value rather than your low price.
A 2011 survey from Nielsen discovered that “consumers around the world favor value over price.” In other words, people want nice things more than they want a cheap price.
The survey polled customers from more than 50 countries. The 25,000+ respondents were quizzed about their online shopping habits, their individual preferences and the types of things that motivated them.
One of the most compelling takeaways from the survey was this:
Fully 61% of global online consumers rated “good value” over “low price” (58%) as the most influential reason to shop
Was price important? Sure, but not as important.
Among more affluent customers, the value/price disparity was sharper. Buyers in more industrialized and commercially viable countries rated value as more important than price.
It’s impossible to make a sharp bifurcation among price and value. The two are inextricably intertwined. But the overarching truth is this — value is better than price. Value sells better than price. People want quality.
If you were to take this reality and apply it to your online business, it might look like this — three applications.
Increase value perception.
The higher your value perception, the more customers are willing to pay for it. This simple image shows why. As you increase value, you raise price.
Value and price are integrally linked. They work in a reciprocal relationship. Raise one, and you lower the other.
The process of increasing your value starts with your proposition. From there, you go on to create a sense of value through the anchoring effect, successful advertising, improved social setting, and need fulfillment. (See my article on the subject for more information.)
Don’t underestimate your customers. Modern customers are knowledgeable and perceptive. They can smell BS. Nat Kausik, CEO of an online deal marketplace explains, “Consumers, they’re very sophisticated. They understand how to explore price for value.” (source)
Raise your price to raise your value.
A higher price can elevate value perception. This truth has been reinforced by peer-reviewed studies.
In one test, researchers allowed participants to sample wines. The researchers gave subjects the same wine, but presented it as if it were a different wine with different prices. The test subjects reported that the higher-priced wines tasted better, even though they were no different from the lower-priced wine.
Customers associate higher-priced items with higher value.
A Rolex watch would not be valued as highly if it were not priced at the level it is.
If you pay a lot for something, you value it more.
Promote one benefit, and make it a value benefit.
Make your product really matter, but don’t sell it on its features. Instead, sell it on its value benefit. That’s what customers really care about.
Wells Fargo stresses value in much of their marketing. Like all banks, they offer a typical medley of financial services. Their distinguishing factor, as they attempt to prove, is the value of the relationship.
Statements by the chairman and CEO attempt to reinforce this value.
Their marketing literature makes the point repeatedly:
- The more business they do with us, the better value they receive.
- The customer value of cross-selling.
- Our value added is our financial advice.
- Our brand has economic value.
- We have a strategy to protect our brand’s value.
Since Wells Fargo can’t boast lower prices, they boast their value instead. They’ve selected one of their key features, and emphasized its value.
Start selling value. Your customers want it.
2. Customers combat stress by seeking pleasure in their purchases. Find ways to signal a customer’s pleasure center.
Every customer who buys from you has a complex emotional life. In fact, one of the reasons they bought from you was due to the influence of their emotions. Buyers, regardless of their nature, motive or thought processes, respond to emotion.
What psychological insights does this give you as you sell to the modern customer? Track with me. It goes like this:
- Today’s customers face an onslaught of stressful conditions.
- To alleviate the stress, these customers seek out products and services that will provide them with pleasure
Consider some of the reality of today’s technology workers:
- A Gallup poll found that “almost 50 percent of workers who frequently use work email outside of normal working hours reported feeling stressed ‘a lot of the day.’” (source)
- A condition called “Internet stress” is one of the biggest stressors. (source)
- More technology has contributed to higher stress levels in the workplace and life dissatisfaction. (source)
- Technology aside, a full 83% of people are stressed out because of their job. (source)
- Facebook and smartphone usage can cause a rise in symptoms of addiction and withdrawal. (source)
- Technology is linked to fatigue stress, depression and other mental ailment. (source)
If you want to state it medically, there are “psychophysiological aspects of working with modern information technology.” (source)
Clearly, people are combatting the powerful negative impact of such stress. How?
By seeking pleasure.
One of the most obvious ways that people pursue pleasure is through retail therapy — ”shopping in order to make oneself feel happier.”
It’s not just a joke. People do turn to spending to infuse pleasure into a stressed-out life situation.
Psychology Today states that we shop, even irrationally, because “we succumb to our moods,” and because “we’re affected by states of mind.” These decisions are driven by our internal response to stress and displeasure.
Of the brain’s regions that are responsible for purchase decisions, the limbic system is the strongest.
Much of the activity that surrounds buying impulse happens in this area of the brain, also known as the brain’s pleasure center.
From the physiological response to sadness, stress or malaise, we find it far easier to give into the pleasure of a product. There are various ways of addressing the mind’s pleasure center:
- Hedonic products — Products that provide an immediate sense of satisfaction or enjoyment.
- Symbolic Products — Products that provide a sense of worth and self-image.
- Utilitarian or Practical Products — Products that are necessary and useful. Even such utilitarian purchases feed the brain’s pleasure center. (source)
Nearly every product or service falls into one of the above categories. For that reason, nearly every purchase can be linked to its emotional satisfaction.
That’s the psychological pathway that brings customers to your product. They have a need. You fulfill it.
SmallBizTrends makes the point this way:
People generally buy your product and service in order to satisfy one of two main needs:
- Pleasure and enjoyment.
- Avoidance of pain or loss via solving a problem.
How do you communicate your product’s ability to provide this? Through marketing.
Every product can help to meet this need. Yep, even foot cream.
Notice how the product promises rejuvenation, amazing moisturizing, and even that tantalizing word “genius.” Really? In a foot cream — a substance that you rub onto your feet?
Yes. Why? Because emotional pleasure, that’s why.
When you position your product to more capably address the customer’s pleasure center, you’ll be in a strong position to sell more products and meet more needs.
3. Customers tap their social networks. Be present in the conversation.
One of the most significant components of the modern buyer is that they are driven to purchase by their social networks.
According to the ODM Group, nearly three fourths of customers “rely on social networks to guide purchase decisions.” (source)
What we have to remember is that today’s customers use social media at every phase of the journey.
- They research products on social media. This is the most influential phase of the social process. Consumers ask for friends’ recommendations, take informal polls, search for a company’s social media information, etc.
- They engage with product information using social media. They may ask questions on the company’s social media account.
- They make their purchase decision on social media. Since they are used to interacting with the brand on social media, they may click-through from Twitter or Facebook.
- They follow through their usage by engaging with social channels, announcing their purchase, or learning more from social conversion.
Heidi Cohen pictures the traditional sales funnel by applying it to the social buyer:
The modern buyer is a social buyer, simply by virtue of the fact that she is online.
Online is a social place. From user-generated content like product reviews and star-ratings, to the ubiquity of review sites, there is no escaping the influence of social media upon a purchase decision.
Consumers have questions, and they seek to answer these questions by tapping social networks. Here’s a snapshot of the social consumer, and how he uses social media at various touch points on the purchase cycle.
Gallup has found that one of the main reasons users engage with social media is for the specific purpose of informing their purchases.
Here are some of the specific ways that consumers use social media, and how you need to respond:
Customers are affected by online reviews.
Make sure that you are allowing online reviews. While customers may indeed trust your marketing message, they are more likely to trust an unbiased former customer.
Customers are aggressive social researchers.
Today’s research-savvy customers know how to root out the good, the bad and the ugly on your product. If you care about your brand, then you will care about the social impact of your brand.
The most intelligent customers aren’t those who swallow all your stats, metrics and information. The most intelligent customers will reach out to the social side in order to get the real user scoop on your product.
Customers rely on social proof.
Social proof is a legitimate method by which customers can gain trust and information regarding a product. If you ignore the impact of social proof, you are essentially neglecting a form of marketing that customers crave.
Social media’s primary impact is not in the way that it allows brands to increase their reach, but in the way that it allows customers to respond to and act on referrals and recommendations.
HubSpot reports that “71% of consumers are more likely to make a purchase based on social media referrals.”
But more powerful than just social media referrals are a company’s own social media posts. While 71% of customers report being impacted by referrals, 78% reported, “companies’ social media posts impact their purchases.”
What you say on social media is profoundly important in influencing your customers. Keep in mind that customers have a profound and primal need for connection. This psychological reality must inform your marketing, pushing you to engage in social media in meaningful ways.
In this article, I’ve covered three psychological aspects of the modern buyer. Here they are in summary form:
- Customers are more eager to gain value than to save on price. Sell your value rather than your low price.
- Customers fight stress with pleasure seeking. Find ways to signal a customer’s pleasure center.
- Customers tap their social networks. Be present in the conversation.
Now, get this.
These three aspects can be boiled down to three very simple truths:
- Influence of objectivity: Modern buyers are value-driven.
- Influence of subjectivity: Modern buyers are pleasure-driven.
- Influence of community: Modern buyers are socially driven.
Wow. Now you see why these three motivators are at the core of every buying decision?
Those aren’t modern psychological developments. Those are rooted deep within the human brain, and characterize the modus operandi for all of life’s decisions. That’s why these three principles are so profound.
Although rooted in psychology, the modern implications are new. It’s up to us as insightful conversion optimizers to strategize the most effective ways of connecting to those psychological realities and improving our ability to sell.