May 3, 2013

6 Psychology Studies with Marketing

Implications
In university, I chose to major in psychology because, the way I saw it, psychology is
relevant to pretty much every career path.
Psychology is the study of human behavior, and there are very few jobs in the world
that don’t have to do with human behavior. Unless your job is to count every grain of sand
on a desert island, you’re always going to be dealing with people.
In no field is the overlap between psychological theories and real-world applications more
apparent than marketing. The aim of marketing is to influence human behavior, and you
can’t begin to do that if you don’t understand how humans behave.
Here are six landmark experiments that reveal key insights about human behavior and the
psychology of marketing.

1. Regan’s Reciprocity
Experiment
Reciprocity – the idea that if I give something to you, you feel obligated to give something
back to me – is a fundamental part of human nature. Noted paleontologist Richard Leaky
said that the urge is so deeply rooted, it’s the essence of what it means to be human. And
social psychologist Robert Cialdini identified it as one of his 6 key principles of influence.

In 1971, Professor Dennis Regan at Cornell University demonstrated the power of the
reciprocity principle in what was ostensibly an “art appreciation experiment.” In the
experiment, subjects were asked to rate paintings with a partner, who was in reality a
research assistant.
Halfway through the exercise, the research assistant would leave the room and return a little
while later. For some subjects, he would bring back a soft drink. For other subjects, he
would return empty-handed.
At the end of the exercise, the assistant asked the subjects whether they would be willing to
do him a favour by purchasing raffle tickets from him. As expected, the subjects who had
received the gift of a soda were far more likely to purchase tickets, even though the tickets
were far more expensive than the soda had been.
So what does this experiment tell us about marketing?
If you provide something of value to your customers or your website visitors, they will be
far more likely to provide you with their business in return.
This concept is at the heart of inbound marketing. I offer you valuable content, and you feel
obliged to return the favour in some way.
Reciprocity is also relevant for link-building and relationship-building. If I link to your
website, you’ll feel more inclined to link to my website in return. If I re-tweet you, you’ll
feel more inclined to re-tweet me.
In short, effective marketing is all about exchange. If you give a little, you’ll get a little.

2. Freedman and Fraser’s

Compliance Experiment
People generally like to remain true to their word. Years of psychological research show
that if you first make a small commitment to someone, and then that person then asks you
to make a larger commitment, you will be more likely to comply with their request.
A common explanation for this phenomenon has to do with cognitive dissonance. Once
you make a commitment to an organization, person, or cause, that commitment becomes a
part of your self-image. If you are then asked to further demonstrate your commitment, you
will be hesitant to renege because doing so would conflict with your new self-image and
create a dissonant mental state.
This time-tested truth is commonly known as the foot-in-the-door technique, and is
another of Cialdini’s six principles of influence.
One of the first studies to demonstrate the foot-in-the-door technique was conducted in
1966 by Jonathan L. Freedman and Scott C. Fraser.
The researchers contacted California housewives by telephone and asked them if they
would answer some questions about the household products they used. Three days later,
they called again and asked if they could send a team of men over to go through their house
for two hours to manually take account of all the cleaning products.
Freedman and Fraser found that the women were more than twice as likely to agree to this
larger request than a control group that had not initially agreed to the smaller request.
So what does this experiment tell us about marketing?
Don’t try to sell your potential customers on your product right away; get them to commit
to a smaller request first, like filling out a contact form, and then progressively ask for
more.
Nurturing a lead is a lot like nurturing a relationship. You wouldn’t ask someone to
marry you on a first date. First you get them to commit to seeing you again, then after a
while to meeting your friends or your parents. Slowly, you ask for greater and greater
commitment until (maybe) the time comes to ask for a lifelong commitment.
Guiding leads through your sales funnel follows the same process. First you get them to
commit to giving you their contact information, then you ask them to subscribe to your
blog or to follow you on social media. Eventually, these progressively larger commitments
can lead to a sale.
The important thing is not to go for the gold right away. Get your foot in the door first, and
work your way in from there.

3. Kahneman’s Framing
Experiment
A key insight to emerge from cognitive psychology over the past few decades is that the
human brain relies on basic rules of thumb, or cognitive biases, to process information and
make snap decisions. Daniel Kahneman and his research partner Amos Tversky are
credited with discovering the existence of many of these cognitive biases through a series
of seminal experiments in the 1970s and 1980s.
One of these cognitive biases is known as the Framing effect. The Framing effect means
that people will give different responses to the same problem depending on how it is
framed or worded.
In a key experiment, Tverksy and Kahneman split participants into two groups and asked
them to choose between two treatments for 600 people infected with a deadly disease.
In Group 1, participants were told that with Treatment A, “200 people will be saved.”
With Treatment B, there was “a one-third probability of saving all 600 lives, and a two-
thirds probability of saving no one.”
Presented with this option, which treatment plan would you choose? Most participants
opted for Treatment A – the sure thing.
In Group 2, on the other hand, participants were told that with Treatment A, “400 people
will die.” And with Treatment B, there was “a one-third probability that no one will die,
and a two-thirds probability that 600 people will die.”
In this group, the results were reversed. Most participants opted for Treatment B.
Note that Treatment A and Treatment B are exactly the same in both groups – all that
changed was the wording. When the treatments were presented in terms of lives saved
(positive framing), the participants opted for the secure program (A). When the treatments
were presented in terms of expected deaths (negative framing), they chose the gamble (B).
So what does this experiment tell us about marketing?
Context is everything. How you frame the information you present on your website or in
your ads will change the way people react to it.
Obviously, you want to emphasize the positive effects of your product over the drawbacks
(like cost). But more than that – consider the tone of the language you use on your website.
If it’s very business-like, you’ll put your users in a business frame of mind, and they’ll act
accordingly. If it’s more personal, they’ll be put in a casual frame of mind, and they’ll act
in a different manner.
The type of framing you choose will depend on your goals and on what you are aiming to
achieve.
With your online advertising, consider varying the tone and the frame of your ads and
conducting A/B testing to see which is more effective. A very slight change in language
can have a huge impact on the decision process.

4. Kahneman, Knetsch, and

Thaler’s Loss Aversion
Experiment
Another cognitive bias related to the Framing effect is known as loss aversion: people feel
the negative effects of a loss more powerfully than the positive effects of an equivalent
gain.
If you won $1,000 tomorrow, you’d probably be pretty happy. But your level of happiness
would be less intense than your level of unhappiness if you instead lost $1,000 tomorrow.
Loss aversion applies even for small-value goods. In a 1990 study, Daniel Kahneman, with
colleagues Jack L. Knetsch and Richard H. Thaler, randomly assigned participants to either
a “buyer” or “seller” group. The sellers were each given a mug and the buyers were given
nothing.
In subsequent trades, the researchers found that the sellers required significantly more
money to part with the mugs (around $7) than the buyers were willing to pay to acquire
them (around $3).
So what does this experiment tell us about marketing?
No matter how good your product is, your customers’ fear of throwing away their money
on it is always going to outweigh their desire to gain it.
There are several things you can do to help alleviate your customers’ aversion to parting
with their money. For example, you can offer a risk-free trial period or a rebate.
For e-commerce, consider how you frame your transactions. Loss aversion implies that
customers would rather avoid a $5 surcharge than get a $5 discount.
Also, be careful when initially setting the price of your product. Price increases are far
more likely to influence a customer’s decision to switch than price decreases.
5. Zajonc’s Mere Exposure
Study
“Any publicity is good publicity.” The idea behind this oft-quoted statement is that having
people talk about you, regardless of what they’re saying, beats having no one talk about
you at all. And indeed, a number of psychological experiments have demonstrated that
simply exposing people to something – a name, a person, a product, a song – increases their
positive feelings toward it.

Robert Zajonc demonstrated the power of mere exposure in a famous experiment in 1968.
He split subjects into two groups and showed them a series of meaningless Chinese
characters. He then told the subjects that some of these symbols represented positive
adjectives, and others represented negative adjectives.
The individuals consistently rated the symbols they had previously seen more positively
than the symbols they had not seen. Moreover, after the experiment, the group that had
been repeatedly exposed to certain characters reported being in a better mood than the
control group.
So what does this experiment tell us about marketing?
You can increase the power of your brand simply by exposing people to it.
Thomas Smith wrote a famous guide in 1885 called Successful Advertising that is still
often quoted today:
“The first time people look at any given ad, they don’t even see it.
The second time, they don’t notice it.
The third time, they are aware that it is there.
The fourth time, they have a fleeting sense that they’ve seen it somewhere before.
The fifth time, they actually read the ad.
The sixth time they thumb their nose at it.
The seventh time, they start to get a little irritated with it.
The eighth time, they start to think, “Here’s that confounded ad again.”
The ninth time, they start to wonder if they’re missing out on something.
The tenth time, they ask their friends and neighbors if they’ve tried it.
The eleventh time, they wonder how the company is paying for all these ads.
The twelfth time, they start to think that it must be a good product.
The thirteenth time, they start to feel the product has value.
The fourteenth time, they start to remember wanting a product exactly like this for a long
time.
The fifteenth time, they start to yearn for it because they can’t afford to buy it.
The sixteenth time, they accept the fact that they will buy it sometime in the future.
The seventeenth time, they make a note to buy the product.
The eighteenth time, they curse their poverty for not allowing them to buy this terrific
product.
The nineteenth time, they count their money very carefully.
The twentieth time prospects see the ad, they buy what is offering.”
Advertising is one way to expose people to your brand, but it is by no means the only
way. Blogging, social media, email marketing, podcasting – these are all great ways of
getting your name out there.
The more presence you have, the more people will come to think positively of your
company, and the more business you will get.
6. Asch’s Conformity
Experiment
How much time do you spend thinking about what other people think of you? Be honest –
it’s probably a lot.
Humans are a social species. There’s safety in numbers, which explains why we have such
a tendency to try to fit in. Psychologists refer to this tendency as conformity, and it’s been
demonstrated time and again in cultures all around the world.
In a famous 1951 experiment, Solomon Asch showed that group pressure can override even
the most obvious of facts. He had college students participate in a “perceptual” task along
with a group of other students, who were in reality actors hired by Asch who knew the true
aim of the experiment.
The participants were shown a card with a line on it, followed by a card with three lines on
it, labeled A, B, or C. They were then asked to say aloud which of the three lines was the
same length as the first line that had been shown.
Below is a sample of one of the cards the participants were shown.

Which line matches the length of the first line? Clearly, Line A. But what if everyone else
in the group said the answer was Line B? Would you stick with the evidence of your
senses, or go along with the crowd?
Asch conducted several of these trials in which all the actors in the group were instructed to
unanimously give the wrong answer. He found that a large percentage of the “real”
participants followed the majority in these instances. Only when one of the confederates
acted as a “dissenter” who gave the right answer did the power of the majority influence
decrease.
So what does this experiment tell us about marketing?
If social influence can cause people to ignore even the most obvious truths, you can bet it
has an effect on how people evaluate your business.
The more social proof you can attach to your website and to your brand, the more new
customers you will attract. This social proof can take the form of customer
testimonials, Twitter followers, Facebook fans, or blog commenters. If people see that
others are liking and interacting with your brand, they will be inclined to hop on the
bandwagon.
It’s no coincidence that social signals now play a huge role in SEO. Google and other
search engines recognize the value users place on the opinions and actions of other users.
If you want to attract new business, start by building up a community of followers on your
blog and your social media profiles. Once you get the ball rolling, more people will start to
hop on board and soon you’ll have a dedicated and growing base of brand advocates.

There’s no magic formula that will turn somebody who wants nothing to do with your
business into a devoted fan, but these six experiments reveal fundamental truths about
human nature that you can leverage to your advantage.
Once you understand how your customers behave and what their basic needs, fears, and
biases are, you can start tailoring your marketing efforts around them.
And of course, remember that the goal is never to manipulate your customers, but to use
your knowledge of psychology to create a positive and meaningful experience for both you
and them.

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