I have an ongoing fascination with human psychology — and sometimes it yields really interesting lessons…
My undergraduate degree is in psychology. Though at the time, I was pursuing it more to figure out my own strange mind than because I actually wanted a career in the field. Turns out knowing psychology is really good for marketing though, so that degree has paid off.
Also, my wife is a psychologist — met her in school, and she actually did go into the field, and now runs a successful private practice here in Lincoln.
As part of her membership in APA, the professional association for the field, we get their monthly magazine, Monitor on Psychology.
I was flipping through the latest issue of the Monitor, and found multiple a-ha moments in their In Brief section, about recent research in the field.
And since the research suggests lessons directly applicable to our work in marketing, selling, and other persuasion… Well, I thought you might appreciate me sharing both the research findings and my thoughts.
Call it: 3 Breakthrough Ideas from Recent Research on Psychology.
How price influences perceived value…
Two experiments were profiled together in a study in Psychology of Aesthetics, Creativity, and the Arts. Each experiment asked students with no prior art training to rate how much they liked 90 unfamiliar paintings.
In the first experiment, test group participants were shown fictitious price information for the paintings. Control group participants rated the same paintings without seeing any price attached to it.
In the second experiment, test group participants were shown ratings from art curators as well as peers. Control group participants rated the paintings without anybody else’s rating shown.
Care to guess what they found?
When people saw higher prices, they rated the same art higher. When people saw higher expert and peer ratings, they rated the same art higher. I imagine you’re not too shocked by it, but it’s worth noting and applying to your situation…
This is NOT the first time I’ve seen similar conclusions.
The wine industry is rife with this. And there’s been research.
On price: When told the high price of a bottle of wine (or asked to pay it!) people will rate their experience of the wine higher. Alternately, given a highly-rated bottle of wine disguised as a low-price alternative, wine drinkers will rate that same wine lower.
On ratings: Most smart wine merchants these days track Wine Spectator magazine for its ratings. When a wine is rated highly in Wine Spectator, the merchant prints out the information, and attaches it to the shelf next to the bottles. For most wine drinkers, this is enough to choose one bottle over another.
But it doesn’t just apply to wine.
Both the price and peer ratings are social proof — and you can find them anywhere and everywhere.
One of Amazon’s big game-changers was the star ratings. I remember being in the publishing business when Amazon was still really just coming up, and really liking their star ratings. I looked around at the time, because I was trying to convince the IT training business I worked for to implement them on their own training. Very few people were doing publicly-sourced star ratings on products as recently as 10 years ago.
Today, I know I regularly make purchasing decisions based on the star ratings. I’m willing to pay more for a product that more people have ranked more highly. If a product has enough bad reviews, and I read them and they don’t seem totally off-target, I will choose not to buy it, even if I intended to.
Consider then how you can include peer and expert ratings into your marketing. With technology making it so easy, this is moving more toward minimum expectation, when it used to be a nice-to-have.
Also, price. Don’t be afraid to charge high prices. I’ve written before how I encouraged a client to raise their price by 30%, doubled their per-order profitability, and added half a million dollars to their annual profits by simply raising the price. Today, I sell largely the same amount of work for $20,000 that I used to sell for $2,000. In both cases and many more I could list, consumers are actually happier paying the higher prices. The perceived value is higher, and they trust both me and my client more, and are less nitpicky.
Story trumps substance in persuasive writing…
A study in PLOS ONE looked at writing style in the abstracts of 732 scientific studies on climate change (the abstract is the publicly-published summary of the study itself, which is often hidden behind a pay wall).
Each of the abstracts was coded based on the presence of narrative elements, including setting (time and place), sensory language, and more.
They then compared this score with how many times each study was cited in literature, as well as which journals published the studies.
They found that studies that had more narrative elements were cited in other literature more often, and were more likely to be published in high-impact journals.
Here’s what every academic hates to hear: it doesn’t matter what you discover, if you can’t market it. This applies to science. But it goes so much further.
It doesn’t matter how good your product or service is. The most successful company in a niche is not the one that delivers the best product or service, but the one that markets itself best.
Copy and communication style is key. Telling the story, not just the facts.
If you want to persuade and influence, you can’t just have the facts on your side. You need a clear, compelling presentation. And that most certainly includes things that are considered to be more “story” more than “substance.”
On this same topic, I’m reminded of research my professional friend and mentor Mark Ford (Michael Masterson) did into the readability of editorial content, as it related to newsletter renewals.
In short, they found that newsletter writers who wrote more readable content sold more subscription renewals.
For investment newsletters, it wasn’t about investment performance. It was about how easy it was to read.
(Let that sink in.)
The rule they came up with, that they teach all writers under the Agora Inc. companies, is that your writing should come in at 7.5 grade level or below, on the Flesch-Kincaid readability scale.
Keeping your writing at a 7.5 grade level or below — regardless of message — creates more influence and persuasion.
Emphasizing soft skills yields higher hard performance numbers…
A study in the Journal of Youth and Adolescence compared the values parents instilled in their kids with academic performance.
The research targeted predominantly white, upper-middle-class middle school students.
They were asked about the values their parents were teaching them, as part of a bigger group of questions. Two major value categories they looked at were prosocial (cooperation) values versus achievement (competition) values.
They found that teens whose parents emphasized competition actually fared worse in school than those whose parents emphasized cooperation.
This has less direct relevance to marketing, but I thought it was still fascinating, and applies throughout life — and not just parenting.
We are a social species, though modern Western culture is very individualistic.
What the research is finding is that the outcomes are better if we don’t ignore our nature, and we emphasize working together.
An anecdote: This weekend I was blown away by my son’s basketball team’s performance. During practice before the game, I asked them what they wanted to work on. The stand-out star on the team — who has the most points for the season — said he wanted to work on assists. In other words, cooperation over competition. I was kind of floored (though in hindsight, I wonder if he just wanted others to get better at giving him assists!). We ended up doing a handful of drills where the players worked together. When the game started, this continued — and they were incredibly consistent in playing together. By the end of the game, I was pretty much speechless. The amount of cooperation led to a total blowout.
Note here: cooperation led to better performance in competition.
I’m not trying to make the point that competition is bad. I believe quite the opposite, in fact. It’s obsessive competition that can becomes the problem. When you lose sight of the bigger picture because you’re too focused on the competition, your performance will struggle.
Consider the applications beyond children, and beyond school and sports.
Do you ever have to lead a team? Using this research as inspiration, do you think it’d be better to pit every member of the team against each other, or find a way to get them working together while each trying to bring their best?
When I worked with that IT training company, we had a unique sales commission structure (I worked in sales for my last bit there, after realizing it was the only place in the company I could get performance-based compensation).
There were two tiers of commission.
Whenever a sale came in and was handled by any member of the sales team, it got credited to the team. Each member of the sales team got a small percentage of all those sales in their commission. In other words, if a sales was under the team and you’d never touched it, you would still get some commission.
Also, each member of the sales team had the potential to earn extra on every sale they handled. If you did something extra in closing the sale, you earned a higher commission. This could involve closing a sale that wouldn’t have closed otherwise through extra effort in follow-up or elsewhere, or it could be because you sold the customer a better solution than they’d originally inquired about.
This unique compensation plan encouraged both competition and cooperation. You wanted to maximize your personal sales, for the highest commission possible. But you knew you could help every other member of the sales team and actually get rewarded financially because of it. This meant, for example, that if someone was out for the day, anybody would be happy to take care of their customer, leading to a better customer experience.
Wow — that’s a lot of breakthroughs!
Now, put them to work for you.
Yours for bigger breakthroughs,