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5 Uses of Psychology in Your Small Business

EditorJan 24, 2012

Many developing small businesses simply do not have the funds to invest in a sophisticated marketing department. If your business is amongst this majority, this does not mean that you can’t make some educated marketing decisions by yourself

There are some simple ways to use psychological findings to your advantage; just as most of the bigger companies do. Here are a few simple ways in which you can implement simple psychology to give your small business a competitive edge.

1.Color Perception

The way people subconsciously interpret colors can play a key role in customer behavior. For example, red is recognized as the most visible color in the spectrum and therefore providing a natural draw. This is why the color is often used to mark in-store sales or to draw the eye to specific areas of a store. Orange and other similar colors can be used as well. Blue has a calming effect on people and is said to promote trust. For this reason many companies try to use the color blue in their logo or other areas in which they can make the connection of honesty to their business. It is sometimes cited that many people claim blue to be their favorite color due to this effect. As a final example, yellow is a color associated with hunger and is said to stimulate the metabolism. Because of this, yellow is often utilized in restaurants and markets.

2.Effort Justification

Stemming from theories surrounding Cognitive Dissonance, effort justification posits that people are more apt to appreciate something if it requires work to acquire. For example, sites like Facebook and Gmail implemented a system in which an invitation was necessary to join the service. This meant that people had to actively seek out an invitation in order to be initiated into the website. Once they had achieved the goal, they then had an investment in the product, as they had needed to exert effort to achieve initial access. The same also holds true of companies that limit supplies during the primary rollout of some products. People who had to wait in line to gain access to the limited supply would then value their acquisition more than they would have otherwise. This in turn helps to spread positive word of mouth. These are just a few examples as there are other ways to take advantage of this paradigm.

3.Ben Franklin Effect

As an inventor, Ben Franklin has many developments associated with his name. One of his lesser-known innovations, however, is in pioneering the “Ben Franklin Effect”. Franklin was once quoted as saying, “He that has once done you a Kindness will be more ready to do you another, than he whom you yourself have obliged.” In essence this means that if you ask someone to do you a favor, they will be more likely to feel positively towards you after helping you out. This is explained to an extent by the dissonance that someone feels when doing an action they don’t enjoy, in this case the favor, and the contrasting feeling of having done something nice for you. The result is that they feel that they must have positive feelings towards you. For Ben Franklin, this was demonstrated when he would ask to borrow a pen upon meeting someone whose trust he needed.

4.Informative Social Influence (a.k.a Bandwagon Bias)

People have an underlying need to be accurate and will often look to peers and authority figures to help them achieve this accuracy. Several experiments have confirmed that people are incredibly susceptible to the views of others in forming their own opinions. One such example is the Solomon Asch line experiments in which a participant was placed in a group of people who had been hired by the experimenter. As a group, they would be presented with three differently sized lines, only one of which matched a fourth line. A portion of the time, the hired participants were asked to unanimously make the wrong choice when matching. This would often cause the participant to also guess the same wrong answer, despite making the correct choice when there was no pressure. Participants would later admit that although they suspected the consensus to be faulty, they thought that perhaps the others knew something that they, the participant, did not. Because of this group trust, it is effective to cite surveys, positive critical reviews and other forms of social pressure when promoting your product. People are more likely to believe that a service is positive if other people tell them it is. This is a seemingly obvious trick that is undeniably useful.

5.Mere Exposure Effect

In basic terms, if someone is exposed to an object or idea on a regular basis, it will create feelings of familiarity that will transfer to a general feeling of positivity. Faces on currency provide an example of this. Seeing past presidents Lincoln and Washington on American dollars and cents produces a familiarity and fosters positive connotations. This helps generate goodwill within Americans in remembrance of their government’s political founding and development. As a small business owner, you too can take advantage of this effect. For example, finding prominent places to display your logo can be advantageous. If you have a website, make sure the logo is easily seen by people when navigating between pages. For storeowners, make sure your logo is visible from the street and prominent around the interior as well. You won’t want to hit customers over the head with an overabundance of mass texts and advertisements, but make sure that they notice your business. You may also use familiar stimuli in advertising for added effect. This can be accomplished by utilizing easily recognizable objects in logos and displays. These objects can be as simple as common geometric figures or a familiar sound. A basic piece of advice When promoting your small business, is to avoid being too obscure.

With the implementation of just a few of these techniques, you can hopefully see an increase in business leads. If you do find these helpful, it can be worth further reading to become more familiar with how simple psychology can improve business with customers. Until your company can afford a larger marketing department, try these basic techniques first.