Monday, May 20, 2024

Leveraging Behavioral Economics to Craft Irresistible Sales Offers


Brand leaders wanting to grow their businesses should turn to consumer behavior to create sales offers their audience wants. Since behavior has a psychological component, digging into the reasons why buyers behave the way they do can help sales and marketing teams craft offers that convert to sales.

People’s days are full of emails, social media messages, and radio and television spots trying to sell them something. Most learn to tune out the noise. If you want to stand out among the cacophony of “buy this” and “try that,” you need to dig deeper and craft your messages to solve a problem the buyer has.

Fortunately, there are some things you can do to make the most of the data you have on your customers’ psychographic traits. Solve customer pain points, overcome objections and add a few things to show them you understand them on a deeper level than your competitors.

1. Leverage the Scarcity Effect

Behavioral scientists have wondered why brands like Shake Shack and Chick-fil-A have people wrapped around the block waiting on food, while other establishments with tastier options lack customers. Part of the reason ties into why and how people spend money. The Product Marketing Alliance reports around 71% of Americans aren’t saving enough money to retire.

Why do humans spend money on things and keep looking for that even more amazing experience? The scarcity effect makes people value things that are limited. So, when a company such as McDonald’s brings back the McRib or a Shamrock Shake for a “limited time,” customers flock to grab theirs before it’s gone.


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2. Build Social Proof

Most people in the developed world are on social media platforms. They may turn to social methods before making a purchase, such as asking a group what others bought and if they liked it.

We are much more likely to believe the words of peers than what the company says about itself. If you want to create irresistible sales offers, you must develop an excellent reputation on social media. Paying attention to what your customers say also gives you valuable insight into how to solve their problems.

The company Bombas utilizes social proof to draw in more customers. They invite people to share images wearing their socks or post reviews. The more people talk about the quality of the socks and why they like to buy them because the company gives back, the more likely others will be to follow suit.

3. Get Personal

Successful salespeople understand you have to know your customer before you can sell them something. Golf is a good example of how to build relationships. Around 90% of top executives play golf, and 80% say it helps them create lasting business relationships.

The golf course is a way to invest time and energy into clients. You talk as you walk from one hole to the next, and you get to see how people play the game and what makes them tick. Of course, golf isn’t the only way to collect customer data. You should also send surveys, host events and call consumers for a talk.

HelloFresh is a meal subscription service. They tap into the power of personalized offers by showing different meals based on different food preferences. If a consumer visits their website, the business also offers options for receiving a discount. The user can select the one that appeals most to them.


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4. Anchor Prices

People love to feel that they’re getting a good deal. An anchor pricing strategy offers a starting point for buying an item, which will serve as the top retail price. The highest cost shouldn’t be ridiculously high but should be the premium the company receives, with all factors being ideal.

Tarte makeup offers a retail price on their cosmetics. However, they then offer discounts, package bundles and other appealing offers.

Start with an anchor price and then offer discounts so people feel they’re getting an excellent value. Combine anchor pricing with techniques such as scarcity for higher conversion rates.

5. Build Relationships

Building strong customer relationships makes your offers seem more attractive. When a client knows you consistently give them excellent value and they can trust you to mean what you say, they’ll be loyal to your brand. It’s much easier to sell to an existing customer than someone who doesn’t know you or your work/product.

Customer relationship management (CRM) software provides two advantages. First, it helps you stay in touch with regular patrons. Second, an excellent CRM system also tracks buying habits and spits out analyses to help you create sales offers customers are most likely to take advantage of.

Chewy sends messages based on customers’ past buying behavior. They also mail birthday cards to registered pets and offer loyalty perks such as auto-ship discounts.


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6. Offer Decoys

The decoy strategy when anchoring prices involves offering something expensive or not as great a value before presenting a better deal that entices the customer. They walk away feeling like they received a bargain.

If you’ve ever visited a product page, scrolled through the details and decided the cost was too much, you may have been hit with a second offer. Apple utilizes decoy pricing. When you click on the latest iPhone, you’re offered a cost-effective, middle- and high-cost option.

Remember the story of Goldilocks and the three bears? Goldilocks found the middle option was “just right” for her. When deploying a decoy, consider that people are most likely to choose the middle choice, and make it highly attractive for more conversions.

7. Use FOMO

Many people experience the fear of missing out (FOMO). The psychology behind FOMO ties to our need to belong or our “social hunger.” When you understand why people respond to the feeling that everyone else is doing something, it’s easier to craft marketing messages that give them an opportunity to belong.

If you’re on Amazon and you notice stock is down to two of an item, you’re more likely to add it to your shopping cart. Other ways to tap into FOMO include doing hourly deals, creating a social media frenzy where influencers post about your item and why they love it, and asking people to tell others about your brand.

Mix Creativity and Psychology for Irresistible Offers

The best offers consider customer behavior and the psychology behind their actions. Marketers then try to come up with something no competitor has tried and that will be unique and fun for users. The more research you do and the better you understand your audience, the easier it is to craft an enticing deal.

Image by freepik





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