How Customers Make Buying Choices

Posted by on Jul 20 2012

I LOVE reading about the psychology of marketing!

I just finished reading The Art of Choosing by Sheena Iyengar. She’s a social psychologist and a professor of business at Columbia University, and her practical studies into how people make decisions is immediately applicable for all of us when we market our services and products.

It’s an especially helpful book when trying to understand how customers make choices. The author conducted a series of studies about the psychological factors in decision-making. The best part about the results of the studies is that you can use the information in your marketing and sales efforts right away.

Here are top seven highlights from the book which small business marketers must learn:

  1. People like to feel they are unique and not “just like everyone else.” This, of course, isn’t true: as human beings, we’re more alike in our buying behavior than we realize. However, customers want to appear as if they each, individually, make unique buying decisions different from their peers. For instance, if two people would normally choose the same meal at a restaurant, studies show that when one person gives her order, the second person will change her order so that she doesn’t appear to be a copycat. If everyone at the Apple store is buying a white iPhone, all of a sudden people will begin to buy black iPhones. But when customers choose this way, they are less satisfied with their choice. This is more apparent at in-person events than in situations like online shopping (where you can’t see the other person and can’t be judged by the other person). Takeaway: In face-to-face contact with your customers and colleagues, how they perceive their individual identity matters. Don’t tell them they’re “just like every one of my customers.”
  2. People do take marketing puffery seriously, even though logically they shouldn’t. They’ll buy bottled water that they know, intellectually, comes from municipal tap water that’s been created via reverse osmosis. They buy into claims that the water is especially refreshing (all water is refreshing) or that it’s bottled at the source (in this case, the “source” is municipal water) or that it’s “expertly designed water” (does it need any further design than the original H2O formula we’ve been using for so long?? Apparently, yes.). That’s why Dasani’s website focuses not on the water, but on the bottle the water comes in: 30% plant material, 100% recyclable. Takeaway: Even though the customer intellectually knows not to fall for marketing copy, they still do. They want the experience that buying and using the product will bring. You, as the marketer, get to define that experience for them through your copywriting and your branding efforts.
  3. We take into our psyche the words we use and read in marketing. Researchers asked people to construct a sentence using five words they were given. When researchers gave them five words that related to the elderly (old, gray, wrinkle, Florida, bingo), the participants took 15% longer to walk to the elevator when they exited the survey room. Our automatic system is tuned in and connects pre-existing knowledge with what we’re seeing and hearing. Takeaway: Think about how you want your audience to feel and act after they interact with you, your blog, your marketing, and even your social media comments in Facebook and Twitter, and use words that will conjure up that feeling in their minds. If your brand is about “passion,” don’t use words like “slow” or “creepy” when connecting casually with your audience…or they’ll connect it with you and your biz.
  4. Even a small amount of choice brings a sense of well-being. Several studies showed that when participants were given a choice versus being told what to do, those who were given a choice (even the smallest, simplest of choices, like which night to watch a movie), made people feel better about the situation. Takeaway: In your marketing, where can you give them choices instead of only one option?
  5. In 1956, George Miller conducted his famous study that concluded that people can process only seven pieces of information (plus or minus two). We are limited in our capacity to process information, so when you give people too much to think about, they shut down. We simply can’t keep track of multiple objects or facts. Takeaway: When listing the benefits or features of your site, limit the bullet-point list to 5-7 items. If you have more than seven, create a second list with a new title, like, “Here’s even more reasons to buy the XYZ Widget!”
  6. When you give people too many options, they are (at first) attracted to the most options they can see. But when it comes to buying, people purchase less when they have too many options to choose from. When given a choice of 24 jams, only 3% of the people purchased a jam. But when given a choice of three jams, 30% purchase a jam. Takeaway: Be careful of how many choices you give customers. At first they may be attracted to your full array of offerings, but when it comes to buying, having too many options may hurt sales.
  7. If you have to give them options, help them to choose from among the options. Help them to figure out the best way of sorting, comparing and eliminating options. Takeaway: Create a chart about which program they should purchase (from among several), or an article about the pros and cons of different products will help them and increase customer loyalty. Organize their choices for them.

   

11 comments for now

11 Responses to “How Customers Make Buying Choices”

  1. carol dunlopNo Gravatar

    Nice article, I like your insights. The point about limiting the choices is really good, sometimes we want to list everything, but everything can be overwhelming. I think confusing them is worse than having nothing listed.

    21 Jul 2012 at 9:22 am

  2. PacawNo Gravatar

    This is fascinating, espcially the part about giving them too many options. Last year my husband and I went car shopping. There were so many options and extras to choose from that I found my head swimming and I really, truly just wanted to walk away without buying anything.

    21 Jul 2012 at 9:56 am

  3. Sharon HasaNo Gravatar

    This article just goes to show how truly important it is to market your product or service. Marketing puffery may go against your better judgements but it does indeed work on behalf of your business.

    22 Jul 2012 at 10:32 am

  4. Debra CarrNo Gravatar

    Karyn,
    What a great article! Thank you! I know I offer quite a few options to help my clients, with their image. I always do my best in helping them clarify thier goals, but this article
    is a great reminder to once again focus on one or two solutions during our conversations.

    22 Jul 2012 at 2:34 pm

  5. Karyn GreenstreetNo Gravatar

    I’m glad you liked the post. 🙂 I find that the moment I finish reading a business book, I want to share what I learned with everyone! This way, I can take the Top Seven Tips from the book and blog about them. If you found the tips helpful, you can buy or borrow the book, or just use the tips “as is” in your business and marketing.

    25 Jul 2012 at 10:32 am

  6. Coach Debbie KesslerNo Gravatar

    This article has given me the smart information I needed at the perfect time. Just like all lessons, we learn line upon line; precept upon precept as knowledge turns to wisdom.
    I love your book and I look forward to all your articles.

    26 Jul 2012 at 10:25 am

  7. Karyn GreenstreetNo Gravatar

    I feel the same way, Debbie…we learn a little at a time and over time make those lessons our own.

    26 Jul 2012 at 2:23 pm

  8. Lynn RubyNo Gravatar

    As others have said, this is absolutely fascinating. Thanks for drilling down to some of the key points in this book for us.

    I love this statement: “Even though the customer intellectually knows not to fall for marketing copy, they still do.” Wow! That describes me to a T! And will be great input when a client complains that the copy we’ve created for them is too “puffy!”

    27 Jul 2012 at 4:18 pm

  9. Karyn GreenstreetNo Gravatar

    It’s always a fine line between good marketing copy and GREAT marketing copy, Lynn, isn’t it? 🙂 But if YOU aren’t enthusiastic about your product/service, who will be?

    28 Jul 2012 at 8:47 am

  10. Lisa Rae PrestonNo Gravatar

    Karyn, I especially love #4. That’s so true in learning, too. When I taught elementary school, allowing choices along the way motivated children to learn and helped them develop the “life long learner” habit and hunger for knowledge. Amazing what choice and freedom can do for the brain! 🙂

    10 Aug 2012 at 1:37 pm

  11. steve wernerNo Gravatar

    great insight

    learning more and more about marketing daily

    sw

    30 Aug 2012 at 3:51 pm



Category: Internet & Social Media Marketing, Marketing