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How to use consumer psychology to grow your small business

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I bet you never thought you’d be a part-time psychologist when you started your business.  Over the last 10 years of owning a digital marketing agency, I’ve come to realize that successful marketers marry the art of design with the science of consumer psychology.

Funny enough, I almost double-majored in psychology because I was fascinated by how people make decisions, and I think that’s what ultimately led me to build my digital marketing agency. In this post, we’ll dive more into the ins and outs of better understanding your prospects and customers, and I’ll show you how to use consumer psychology to grow your small business.

What is consumer psychology anyway?

Consumer psychology is the study of how our previous life experiences, thoughts, beliefs and feelings influence the way we consider and buy products and services. To get a bit more formal, check out this definition from Auburn University:

“Consumer psychology is the study of individuals, groups, or organizations and the processes they use to select, secure, use and dispose of products, services, experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society.”

Let’s break that down into everyday terms.

As marketers, we need to start examining our customers through a social and scientific lens, almost like a marketing microscope.

 

If we want to better understand what makes them choose and use our products and services, then we have to dig deep and ask questions such as:

  • Are there certain experiences they’ve had in life that would make them warm to our brand?
  • Maybe there are lessons they’ve learned along the way that attracts them to our specific products or services?
  • Do they feel specific emotions that would make them want to buy from our business over the competitor down the street or the next website in the search engine results page?

In essence, we need to listen, learn and leverage.

How do I listen, learn and leverage?

Couple in therapy session

Just recently, I was watching an episode of “90 Day Fiancé: The Single Life” with my wonderful wife, Linda. Judge if you must, but it’s my guilty pleasure because of how well they perpetuate the storylines, and we bond over how our relationship is not nearly as bad as some of these trainwrecks.

In one of the episodes, Colt (a polarizing character in the 90-Day universe) and his new girlfriend, Vanessa, attend a couples counseling session because Vanessa simply doesn’t trust him based on his old habits. As I listened to the exchange among the three, I couldn’t help but laugh because it sounded just like the advice I would give to a small business client trying to better understand their customers:

  • Ask questions to determine their headspace.
  • Build trust by being open-minded and honest in your exchanges.
  • Constantly focus on adding value to the relationship.

The entire scene was an overdramatized example of listening, learning and leveraging. Colt needed to anticipate Vanessa’s needs and act in a way that truly demonstrated his love and respect for her as a person. Vanessa, in turn, needed to know that she was good enough for Colt so that his eyes wouldn’t wander to the next woman.

Now. roleplay: You are Colt, and you’re courting a new customer (Vanessa.) The customer has a level of distrust because they know you want to sell them something. They just found you on Google, and they don’t know if you really care about their buying experience.

It’s your responsibility as the business owner to understand what they enjoy, what they can’t stand and what keeps them up at night.

 

Armed with that information, you make your customer feel more comfortable in the relationship, reassuring them that you truly value them. Your actions need to speak as loud as your words to let them know that they can trust you and their business is appreciated. Bonus points if you can provide such a “wow” experience that they come back for a second date.

Do you see what I did there? I just walked you through your own psychology session. I made you empathize with your customer and find a way to convey to them that they are more than just a dollar sign. Science doesn’t have to be complex or boring. In fact, you’re a scientist, and you don’t even know it.

How does science work into my marketing?

Scientist working with pietri dish

What you may not realize is that every time you publish a social media post or send an email marketing campaign, you’re actually doing a science experiment. Think back to middle school and high school when you learned about the scientific method. It works like this:

  • Question: Will this content make people buy my products or services?
  • Research: Find where your potential buyers congregate (i.e., Facebook, Instagram, YouTube, email inbox, etc.).
  • Hypothesis: If I publish this content, then more people will visit my website and/or storefront and buy.
  • Experiment: Post, publish and send. Get that content out there!
  • Analyze data: Measure your results with tools like Google Analytics.
  • Communicate results: Review what happened with your team and see what you can do to improve the next time around.

Now, you don’t have to be Bill Nye the Science Guy or Marie Curie, but bear with me. You’ll see how important the understanding of your consumers really is to the success of your business.

Why does consumer psychology matter?

You’re probably saying, “OK, Einstein, why should I take the time to care about this? I have a business to run!” I wouldn’t fault you one bit. I know your time is valuable, and there are only 24 hours in the day.

But I can assure you that if you better understand your customers, you can shave hours, days and even weeks off the time you spend marketing to them and win even more first-time and repeat business.

Consumer psychology in action: FOMO

Have you ever heard of “FOMO” or the fear of missing out? Well, it’s more than just a four-letter word — it’s science! According to a 1991 Princeton study, three psychologists found something quite interesting:

People are more afraid of losing something than they are motivated by gaining something of equal value.

 

You experience FOMO every day as a consumer, whether it be countdown timers on websites or subject lines stating, “Seats are filling fast” or “While supplies last!” When you’re faced with a sense of urgency or exclusive offer, you focus on — even stress about — the thought of not having that opportunity again, and so often, you end up buying products or services you may not even need. That potential loss is just too much for you to risk.

Maybe you’ve heard of Groupon?

A great example of a business that leveraged FOMO is Groupon. In 2008, Andrew Mason took a small website dedicated to getting people together to accomplish a collective goal and morphed it into Groupon. Groupon was a site dedicated to advertising local businesses by offering deals for a limited time (FOMO!).

Screenshot of first-ever Groupon offer
Photo credit: Groupon

The first-ever Groupon was a deal for Motel Bar, located just downstairs from the Groupon office in Chicago, Illinois. By promoting a significant discount (two-for-one pizzas) and attaching an exploding offer (limited number of vouchers and limited time only) the coupon sold out quickly. The concept caught on, and in just two years, Groupons were powering deals for small businesses in most U.S. cities and all over Europe.

The fear of missing out, as it turns out, is big business.

Empathy is mission-critical to your marketing

An empath is someone who can mentally put themselves in the shoes of someone else.

Empaths are also some of the most successful marketers! That’s because if you can think like your consumers, you can improve the way you market to them, making you more efficient and much more effective.

Knowing the answers to these questions would help you peer into the mind of your customers:

  • What emotions drive them to buy from you?
  • How do environmental variables such as friends, family, media and culture influence their buying decisions — especially in today’s connected world?
  • What motivates them to choose one product over another?
  • How do personal factors and individual differences affect their buying habits?
  • And last, but certainly not least, what can a business owner like you do to effectively reach out, engage with and convert your customers?

How do I tap into the mind of my customers?

By now, you understand consumer psychology better and see how it can save you time and make you money. But how do you tap into the mind of your customer? Let’s talk about building your very first buyer persona.

What is a buyer persona?

A buyer persona is the definition of your perfect customer: that person who would either call you, click to your website or walk through your front door and buy right away. No objections, no hard questions — just a simple, seamless purchasing experience. We all dream of that customer and would love to have an influx of them.

How do I create a buyer persona?

The first thing to know is that building a buyer persona is a process. It’s not just a one-time thing. As the world turns, your customer will surely evolve. For example:

  • They may move from the city to the suburbs.
  • They may start working remotely or split time between home and office.
  • They may use a tablet or smartphone while they watch their favorite shows.
  • They may speak to Google instead of typing their search query.

Building a buyer persona is all about asking yourself the right questions again and again.

You’ll need to revisit and redefine your buyer personas on a regular basis.

 

Knowing the importance of a buyer persona, my team put together a helpful buyer persona quiz to make it super simple for you. Just answer the questions, and you’ll be sent a PDF with your brand-new buyer persona.

What do I do with my buyer persona?

With your buyer persona in hand, there’s plenty you can do. For example, take a look at this example I cooked up:

After taking my own buyer persona quiz with a client, we invented Mary. Mary is a 74-year-old retired engineer who lives in Cape Cod, Massachusetts. She loves gardening, rom-coms and her five grandchildren. She buys online and through catalogs, and we know that she is analytical because she was an engineer. Just these few information points can substantially help me market to Mary.

Once I have the persona, I take it a step further and find a stock photo on Pexels.com. Then I put the photo and info together (in a PowerPoint or Google Slides presentation) and print it out, so I can always have Mary by my keyboard. This next part may sound silly, but it works.

The next time I brainstorm a promotion or create a social media post or write an email campaign, I’m going to look at Mary and say, “What are you interested in today, Mary? What will get you to click and buy?”

Maybe I will send an email and talk about watching “Bridget Jones’ Diary” with my wife or recount a story about when I brought my kids to the local museum and all the fun we had as a result. I can tie these stories into my message and end with a nice call-to-action, like “Buy Yours Today!”

Do you see where I’m going with this? You can be creative and speak to Mary’s interests, her feelings, her passions. You don’t just have to tell her to buy now, but you can relate to her sensibilities while still making a compelling reason for her to purchase your product or service.

Putting it all together

Yes, you may not be a licensed psychologist, but you now have a better understanding of how to use consumer psychology to grow your small business. By tapping into the minds of your customers and understanding their interests, desires, passions and experiences, you can better relate to them and bolster a profitable relationship with more thoughtful and empathetic marketing messages.

Don’t forget to take a stab at building your own buyer persona, so you can clearly envision your ideal customer the next time you write a blog post, film a video, or create a simple Tweet or Facebook post.

Ultimately, remember that marketing is a marriage of art and science, and it’s your responsibility to keep learning and expanding your skill sets, so you can better serve your audience.

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Tips from Google to make the most of the 2021 holiday shopping season

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Before looking ahead to this holiday shopping season, let’s take a quick look back at 2020, and what a year it was. Amid all the challenges came new opportunities and unprecedented growth for ecommerce. Emerging data offers insights into shifting consumer behavior and its positive impact on ecommerce.

The pandemic definitely triggered a shift to more online shopping. In fact, online sales in early spring of last year exceeded sales during the 2019 holiday season by 7%. Additional research shows ecommerce growth on hyperdrive, with 10 years of growth happening in just three months.

There’s more good news for online retailers: 39% of consumers say they’re buying more online now than they were a year ago. And 81% of consumers in surveyed countries across the globe say they’ve discovered new brands online during during COVID-19.

It’s clear that 2021 will continue to be a year of peak demand, making it a critical time to connect with your shoppers. That’s why it’s more important than ever for your business to be discoverable online this holiday season with help from GoDaddy and Google.

Get ready to reach more shoppers online

Google ad from ceramic plates

People shop across Google more than one billion times each day, searching for products just like yours. Don’t miss the opportunity to connect with customers when and where they’re looking to make their holiday purchases.

With GoDaddy’s new Google channel, you can easily add your products to Google for free and promote them with a Smart Shopping campaign to drive traffic to your GoDaddy online store.

3 ways Google can help you prep for peak moments

Use these three free Google tools to gain greater insights into the current consumer mindset as shoppers gear up for the 2021 holiday season.

1. Explore what the world is searching for with Google Trends

explore what the world is searching

Google Trends lets you see in almost real-time what people are — or aren’t — looking for across Google Search, YouTube, Google Shopping, and Google Images. You can pinpoint where there’s growing interest in products and search terms to guide you in selecting which products to promote. Take new information about what your target market is searching for and incorporate these topics into your SEO and content marketing strategy.

2. Discover what shoppers are looking for

Most shoppers today are doing more research before purchasing.

Shopping Insights gives you information on what people are searching for on Google, related to products and brands.

It’s a guide filled with articles, data, and insights that can help you navigate three critical steps in today’s shopping journey: inspiration, research, and purchase.

3. Evaluate your retail website with Grow My Store

As people spend more time online, they have higher expectations from ecommerce websites and apps. With Grow My Store, you can analyze the customer experience on your site and pick up practical tips for how to improve. You can also see how your site stacks up against retailers in the same industry and find insights on market and consumer trends to help reach new customers.

With this holiday season ramping up, make sure to position your online business in the right spot with help from GoDaddy and Google.

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9 retail tips to increase in-store sales through on-site marketing

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Getting a customer to enter your retail store is a win, but it isn’t the ultimate goal. Your primary objective is having them walk in and walk out as a paying customer. To help you turn in-store browsers into buyers, consider these retail tips to increase in-store sales.

How to improve sales in a retail store

Before we dive into specific retail tips to increase in-store sales, let’s consider the strategies that can help you improve sales in a retail store. As you develop marketing ideas to increase in-store sales, ask yourself these three questions. 

  • What in-store assets can I leverage for on-site marketing?
  • How can you leverage omnichannel marketing?
  • How can you tie your marketing to the customer’s journey?

Let’s take a closer look at each question below.

1. What in-store assets can I leverage for on-site marketing?

As you think about how you can use these retail tips to increase in-store sales, start by considering what you have to work with. Take stock of the types of in-store marketing that are available to you.

  • Print signage
  • Digital signage and video screens
  • Kiosks
  • Live product demos
  • WiFi marketing
  • Overhead messaging
  • Store layout
  • Check-out experience
  • Product packaging
  • Your team

2. How can you leverage omnichannel marketing?

When thinking about in-store marketing, don’t completely turn off your digital marketing mind. Instead, consider how you can connect the in-person shopping experience with the online shopping experience. Consider how you can use omnichannel marketing.

Omnichannel marketing is the process of using multiple, consistent marketing channels that reach customers in a variety of places while offering a cohesive brand experience.

 

Customers often merge the two worlds of shopping. They shop online and then come into a store to make a purchase, or they shop in a store and then buy online. According to Statista, 74% of customers use a mobile device for product research while shopping in a store in the United States.

Two people browsing a clothing rack at a store

As you develop on-site marketing ideas, consider how you can help the customer connect their in-person experience to their online experience. Think about what a customer may have done online before their visit (or while shopping in the store) and how you can connect that experience to their in-store visit.

3. How can you tie your marketing to the customer’s journey?

As you plan your in-store marketing, don’t think only about making a sale. Keep in mind that you can use on-site marketing to move prospects through their customer journey.

Instead of tying all of your marketing to the goal of generating a quick sale, consider how you can use on-site marketing to reach customers in each phase of their journey.

  • Awareness Phase: What can you do to bring awareness to new products or offerings?
  • Consideration Phase: How can you educate or inform customers when they are considering whether or not they want to buy?
  • Decision Phase: What can you do to help a customer make a purchase or drive them toward an up-sell once they have decided to buy?
  • Post-Purchase: How can you bring customers back and stay connected with them once they have made a purchase?

9 retail tips to increase in-store sales

Now that you have some guiding principles to keep in mind as you brainstorm on-site marketing ideas, let’s look at some specific retail tips to increase in-store sales.

  • Convert print signage to digital screens.
  • Collect information from in-store shoppers.
  • Remind people to follow you on social media.
  • Create packages and up-sell opportunities.
  • Create a loyalty program.
  • Use QR codes to guide customers to online sources.
  • Create a photo opp.
  • Allow online customers to create in-store baskets or pick-ups.
  • Utilize your packaging and bags. 

1. Convert print signage to digital screens

Don’t let your static signage grow stale and get overlooked. Switch to using digital signage so you can regularly change promotions and feature multiple messages at once.

2. Collect information from in-store shoppers

Run contests or give incentives to in-store shoppers so they join your customer database by entering their phone number or email address. When you have customer contact information, you can reach out to encourage customers to come back and buy again — or to buy for the first time if they left without making a purchase.

Related: 10 ways to grow your email list in-store

3. Remind people to follow you on social media

Another way to create a connection with customers before they go is by asking them to follow you on social media. This connection gives you another opportunity to encourage interested in-store shoppers to come back again.

4. Create packages and up-sell opportunities

Increase revenue by showing customers why it’s a good idea to purchase two products or services together. Create packages and up-sells that add value to items customers are already planning to buy.

Related: 10 strategies to sell excess inventory

5. Create a loyalty program

Encourage customers to visit and buy (while also growing your customer contact database) by establishing a loyalty program that rewards shoppers for visiting or making a purchase.

6. Use QR codes to guide customers to online sources

QR code on a smart phone

Make it easy for shoppers to join your loyalty program, follow you on social media, and react to your digital in-store call-to-actions. Use QR codes that they can scan to be taken directly to relevant web pages, social media accounts, your online store, etc.

7. Create a photo opp

Give customers a reason to visit your store and share their experience with their followers. Set up a photo-op in your store so shoppers can take a photo, share it on social media, and drive brand exposure.

8. Allow online customers to create in-store baskets or pick-ups

Connect your online and in-store experience by allowing online customers to create in-store baskets that they can retrieve when they visit the store. This approach is great for clothing stores where customers may want to try on items.

Related: 10 tactics to turn impulse shopping into stone-cold sales

9. Utilize your packaging and bags

If a customer makes a purchase, use it as a gateway to get them to come back. In your packaging or bags, include a coupon or promotion that encourages them to visit again.

Start selling more in-store and online

If you have a retail business, you have a variety of ways to promote products and offerings to customers.

Use these retail tips to increase in-store sales. If you have a brick-and-mortar store, consider how you can leverage digital and in-store marketing to increase sales. And if you primarily sell online, see how a physical storefront can help you reach new customers and showcase your business in a new way.

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How technology is changing the advertising industry

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  • Technology has upended the advertising business.
  • Changes in ad tracking and consumer habits are impacting how advertisers reach people and spurring new competition for ad dollars.
  • Here's a breakdown of Insider's coverage of how ad buyers and sellers are impacted.
  • See more stories on Insider's business page.

The advertising industry is going through big changes as technology changes upend consumer habits and where and how marketers reach them.

Apple and Google's phasing out third-party cookies threatens to upend longstanding ad targeting practices. The acceleration of streaming TV has fueled the chase for TV ad dollars.

The shift to online shopping has attracted new players for digital advertising.

Insider has been tracking these trends at some of the biggest advertising buyers and sellers, including WPP, Omnicom, Google, and Amazon, and rounded up our coverage.


The crackdown on ad tracking is changing advertising

Targeting changes are forcing advertisers to come up with new ways to reach consumers. Google and Apple have sent shockwaves through the ad industry when they announced changes that would put an end to longstanding ad targeting practices in the face of pro-privacy regulation.

Those moves have led marketers, their agencies, and adtech companies like LiveRamp and The Trade Desk scrambling to find workarounds.

Read more:


Marketing meets tech

Mars Inc M&Ms
Employees work at the chocolate maker Mars Chocolate France plant in Haguenau.

CMOs are finding new ways to zap ads at people by building homegrown tools, using targeted ads, or ​​snapping up ad tech and martech companies.

Brands like Anheuser-Busch, Mars, P&G and L'Oréal have ramped up efforts to gather data on consumers as platforms clamp down on ad targeting and e-commerce accelerates.

Read more:


Adtech is hot again

Even as advertisers slashed their spending in the economic downturn, the rise of streaming TV and online shopping has benefitted adtech companies that help connect ad buyers and sellers and solve advertising and marketing problems.

Investors are pouring money into firms like like TVision DoubleVerify that are solving problems in digital advertising. Other firms are going public as Wall Street fell back in love with adtech due to broad macroeconomic changes.

Read more:


Ad agencies are getting disrupted

While the established holding companies scramble to adapt to the digital shift, new ad companies focused on digital specialities and armed with new private-equity funding threaten to take their place.

Read more:


Retailers are seeking a piece of the ad pie

Instacart Shopper Car
Instacart is adding 30-minute delivery.

A new set of companies sees an opportunity in selling advertising include food delivery companies, online retailers, and brick-and-mortar grocers. They're hoping to replicate the success of Amazon, which claimed 10.3% of the US digital ad market in 2020 and is competing with Google and Facebook for ad budgets.

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