Insights from Psychology and Behavioural Economics That Savvy Internet Marketers Use

A large part of Internet marketing depends on understanding and exploiting human psychology and behaviour.

Here are a few to get the discussion started, all of which I have personally successfully used at one time or another on creatives, ad copy, images and even emails:

THE DECOY EFFECT

This is a very effective and powerful psychological technique that marketing companies use to take advantage of the loopholes in our brain. The decoy effect is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.

So, let’s assume there’s a movie theatre selling popcorn.

Large……..$7.00
Small……..$3.00

Nearly, every person bought the small. When asked why, they said they felt $7 is tad too costly for a popcorn.

Now after employing decoy effect, a median size “medium” was introduced (its sole purpose being a tool for comparison – that is, a decoy)

Large………$7.00
Medium…..$6.50
Small……..$3.00

and these were the revised prices.

Now, everyone bought the large because they felt large is reasonable because it is only 50 cents more than the medium.

All you have to do is stroll through a grocery store to see this happen again and again with different sizes of products and different prices. “I can get 24 cookies for $3 or 48 cookies for $5… but look over there, that bag of cookies has 36 cookies for $4.50. This 48 cookie bag is a real bargain!”

If you notice keenly, they exploit this “comparison” loophole of our brain to sell the exact thing they want and what we don’t actually need. People tend to think of prices in relative terms and not absolute terms.

THE ANCHOR EFFECT

Where you plant a number in someone’s mind and change their way of looking at things

Lets see an example where you want DONATION

I want donation from someone for some cause and do not want to force them with an exact number here are two ways to do it

Option 1 : Sir, We are doing XYZ for poor children, some donation from you will help! How much would you like to contribute?