Good marketing

is often about using

skills associated with
the creative mind:
storytelling, imagination,
intuition, etc.

But great marketing

includes the other side
of the coin as well.
Table of Contents
01 Marketing Psychology
I. Intro
II. A quick introduction to marketing psychology
III. Case study: One of Central Europe’s largest e-shops

02 The First Visit

IV. Principle 1: Social proof

03 Product Browsing
V. Principle 2: Hyperbolic discounting
VI. Principle 3: The scarcity effect
VII. Principle 4: Reciprocity

04 Consideration
VIII. Principle 5: The framing effect
IX. Principle 6: The center-stage effect
X. Principle 7: Anchoring
XI. Principle 8: Nudge theory
A. Doubt-avoidance
B. Loss aversion
C. Salience
D. Least effort

05 The Purchase
XII. Principle 9: Subliminal stimuli
XIII. Principle 10: The sunk cost fallacy
XIV. Conclusion
XV. Glossary
XVI. References
1
Marketing
Psychology
Intro

Good marketing is often about using skills

associated with the creative mind: storytelling,
imagination, intuition, etc. But great marketing
includes the other side of the coin as well.

We’re talking science, of course. A closer look at

human behavior and why it is we do the things
we do reveals a number of concepts that can be
applied to marketing messaging and content. The
results not only manifest a strong sense of creativity,
but also trigger inherent behaviors in consumers
that can work to a business’s benefit.

Luckily, you don’t need to be a psychologist to

understand these behaviors. In this guide, we’ll
review a number of behavioral principles and show
you exactly how one leading e-commerce store
has successfully applied them to their marketing
efforts for greater conversion rates and an improved
customer experience.
A Quick Introduction
to Marketing Psychology

Marketing psychology borrows from behavioral

sciences in order to analyze how a person’s feelings
and perceptions influence their buying habits. This
is because while we consumers might think we’re
making carefully considered and rational choices,
our brains are using a number of shortcuts to
manage the onslaught of information and efficiently
process it.

Heuristics are one such tactic. These cognitive

processes allow the brain to ignore information in
order to reach a decision faster. For example, let’s
say a freshman in college is shopping on his own for
the first time.

He heads down the detergent aisle and passes 10

different detergents he knows nothing about in order
to get to the Tide section, which is a brand he trusts
simply because it’s what his parents use at home.
If he knew more about the 10 different brands he
ignored, there’s a good chance he’d choose to try
one of them over his old standby, but this mental
shortcut prevents that.

While you might assume less processing reduces

accuracy in judgment, lucky for us, the opposite is
often true: the study of heuristics shows that less
information, computation, and time can improve
accuracy (1). At the same time, however, heuristics
result in cognitive biases – another layer of
processing that greatly influences decision making.

A cognitive bias is a systematic pattern of deviation

from a norm or rationality in judgment (2). Cognitive
biases are essentially well-worn paths that the brain
repeatedly takes when doing things like evaluating,
judging, remembering, or making a decision. We
can chalk these up to the evolution of one of our
basic instincts: if we don’t have to think as much for
every decision that we make, then we can conserve
our precious energy.

The application of psychology to marketing is by

no means a new enterprise. Business organizations
and professionals from all over the globe have
endeavored to use behavioral patterns to their
advantage over the years. The difference now, of
course, is that there’s technology sophisticated
enough to support these initiatives in a much more
effective way.

Case Study: One of Central

Europe’s Largest E-Shops

Now that you have a basic understanding of

marketing psychology, let’s dive into the actual
application of it.

In the following chapters, we’ll walk you through a

typical online buying process: the first website visit,
browsing products, consideration, and, finally, the
purchase.

At each step, we’ll analyze the strategies our

selected business (an e-shop in Europe that we’ve
anonymized for the purposes of this guide) uses
to nudge website visitors toward a purchase, and
explain how and why they work according to
marketing psychology.
We’ll also give you specific tips on how you can use
Exponea to replicate these strategies in your own
marketing.

Let’s go shopping!
2
The First Visit
Principle 1: Social Proof
So let’s say you’re in the market for a new mobile
phone. You begin your journey by searching for cell
phones on Google and land on the homepage of our
customer, an e-shop called Fresh Electronics.
Though Fresh Electronics is a global company, the
first thing you see is a landing page tailored to your
country, including reviews from customers in the
local language. Even if it’s your first time on Fresh
Electronics’s site, you won’t find it hard to trust their
offerings if you see positive reviews from like-minded
consumers.

Here, Fresh Electronics is relying on social proof.

It’s the well-known theory that people will adopt the
beliefs or actions of others.

Essentially, the more you see others do something,

the more you perceive it as correct behavior
because your brain assumes that they know more
about the situation than you do. In other words, it’s
the “me too” effect.

In Fresh Electronics’s case, the more positive reviews

you read, the likelier you are to trust the e-shop with
your purchase.
How-to in Exponea:

Exponea customers have used Exponea Experiments

to modify their site so that it displays customer
reviews to first-time customers, establishing trust.

Experiments enables marketing teams to make

changes like this without needing to rely
on IT or development resources.
 3
Product Browsing
Principle 2: Hyperbolic
Discounting
You’ve decided Fresh Electronics is trustworthy, so
now it’s time to look through their offers. As you’re
browsing through their products and categories,
you might not realize it but these too have been
deliberately organized to influence your decision-
making process.
Let’s look at each section in detail.

Starting with the left-hand banner ad, there’s

a message that reads: “Night pick-up is available
in your region.” Here, Fresh Electronics is employing
a cognitive bias called hyperbolic discounting.

This bias explains our tendency to value the

immediacy of time over the higher value of money.
For instance, if someone offered you $100 today or
$200 one year from now, which would you take?
$200 is obviously a greater amount, but would you
wait that long for it? Statistically speaking, probably
not. Similarly, if you’re eager for a new cell phone
and there’s a model available for pick-up in your
area that very same evening, there’s a good chance
you’ll pay a little extra for it rather than pay less to
wait, say, a week for delivery.

What this means for your business is that you should

always offer fast delivery options, even if the cost is
higher. To give you another example, a limited-time
offer of next-day delivery if the customer purchases
your product immediately will have a similar effect.

How-to in Exponea:

Exponea Web Layers lets you add hyperbolic

discounting messages directly on your site, shown
to the audience of your choice. This lets you show
messages like “Night Pickup in Your Region” only to
customers living in a specific area.
Principle 3: The Scarcity Effect
Next on the Fresh Electronics site, you notice
their “Blockbusters of the week” section.
These are temporarily discounted products.

The deals could last a few hours, a day, a week, etc.

After that, their price goes back to normal.
This strategy, which aims to encourage you to
purchase immediately, is rooted in the scarcity
heuristic. The scarcity heuristic says that humans
place a higher value on an object that’s scarce,
and a lower value on those that are in abundance.
For example, gold is more valuable than copper
because gold is not as abundant. (3)

These short-term deals can also drive people back

to your site by playing on the fear of missing out.
The fear of missing out can lead to concerns that
one might miss an opportunity for social interaction,
a novel experience, or a profitable investment. (4)
In this case, you wouldn’t want to miss out on a
great deal, so you might check back regularly to see
what’s on sale, or if something you wanted is still on
sale.
How-to in Exponea:

Exponea customers regularly use the scarcity

effect to drive conversions. A particularly popular
technique is a countdown banner, which can be
created with an Exponea Web Layer.
Principle 4: Reciprocity
At this point, Fresh Electronics seems like
a trustworthy shop for the purchase you have
in mind, and there are good deals to boot.
But there’s still room for more convincing.

When you get to the bottom of the page, you notice

a menu of links with different education-based
pages for you to explore: Why Fresh Electronics,
How to choose a phone, and How to recover data.
The first page lists the benefits of shopping at this
particular site, the second offers tips on choosing the
type of device you’re in the market for, and the third
gives advice on how to switch from your existing
device to the one you’re about to purchase. All in
all, it’s everything you need to know to make a well-
informed purchase and the transition to your new
device much easier.

The principle being utilized here is called reciprocity.

The rule of reciprocity says that people will feel a
sense of indebtedness if you give them something,
even when faced with an uninvited favor (5). In
this case, Fresh Electronics is using the reciprocity
principle to trigger purchases in exchange for clear
and valuable instructions. Doing something extra
for your prospects in this way, such as guiding them
through the purchase process, can help you turn
them into loyal customers.

Bonus! Educational articles like these can also work

double time by boosting your SEO, or as repurposed
content in your marketing campaigns.
4
Consideration
Principle 5:
The Framing Effect
You’ve narrowed down your decision to a couple of
different options and now it’s time to decide how
much money you’re willing to spend on this phone.
At this stage of the process, Fresh Electronics offers
an assist by categorizing their devices into three
different pricing groups: Traditional, People’s Choice,
and Deluxe. The principle used here is called the
framing effect.
The framing effect is a cognitive bias in which
people decide on options based on whether they’re
presented with positive or negative connotations;
e.g. as a loss or gain (6). In our example above,
the least expensive option on the far left is named
“Traditional” rather than “Cheapest” in order to
soften the potentially negative connotation that
being cheap might evoke.

Its opposite, the most expensive category, is called

“Deluxe” in order to appeal to the high-end buyer
who’s willing to spend a premium. By not outright
saying the devices in the third category are
extremely expensive, instead, the category appeals
to the desire for a luxurious experience.
Principle 6: The Center-Stage
Effect

Let’s say that when it comes to your mobile

purchase, you don’t want to spend too much but you
also want something of good quality. You’d be in the
same boat as the majority of consumers who, when
presented with a number of offers, have a tendency
to choose the middle option.
This principle is called the center-stage effect, which
says that consumers believe options placed in the
center of a simultaneously presented array are the
best bet. This belief translates into their choosing
options placed in the center more often than those
at either end of the display.

You’ll notice how many companies will give their

middle-road pricing package special treatment
when it comes to design, like a “Most popular
choice!” banner, or something to that effect.
Following suit in your own pricing package design
can help you to increase the sales of certain
products or services.
Principle 7: Anchoring
Imagine that while you’re browsing Fresh Electronics,
you’re also checking out another shop in the next
tab. They too have a lot of offerings in the mobile
device category, but they’re not presented in an
organized way.

You can’t sort products by their value or their

condition, so there’s no telling which is high-end,
which is middle-of-the-road, which is used or new,
and so on. Without categories, the number of
choices ultimately feels too great so, overwhelmed,
you close out of the window and head back to Fresh
Electronics.

The reason the Fresh Electronics site is so much

easier to visually and mentally process is because it
employs a principle called anchoring.

Anchoring tells us our brains don’t consider the

value of an option based on its intrinsic value.

Instead, we compare different offers against one

another and ultimately make decisions based
on those comparative values. In other words,
we ‘anchor’ our decision-making process to the
surrounding situation, rather than thinking rationally
to make the best decision overall.

Fresh Electronics anchors you by showing only four

products to start, categorized into three groups.
This creates a baseline to which you can compare
all other mobile offerings. In the end, it’s likely this
anchor that will influence your perception of value
and final purchase decision.
Principle 8: Nudge Theory
It’s not just the anchoring that makes you feel
secure with your shop of choice. There’s a whole
microcosm of activity happening on the site; small
things you might not be able to place or articulate,
but somehow they add up to a strong preference for
Fresh Electronics. This is known as nudge theory.

A nudge makes it more likely that an individual will

make a particular choice, or behave in a particular
way, by altering the environment so that automatic
cognitive processes are triggered to favor the
desired outcome (8). Most important to remember:
it’s a gentle suggestion, not a mandate.
Let’s look at some of the nudges our e-shop uses in
the ad below.
Doubt-avoidance

When your brain feels uncertain about something, it

will often simply avoid decision making. This is called
doubt avoidance.

Using icons on your product or service banners such

as “Over 98% reliability” is a great way to instill trust
in your customers’ minds. It creates a positive notion
or feeling about the product, removing doubts and
encouraging decision making. Other icons that
highlight product benefits can include: waterproof,
eco-friendly, and so on.
Zero-price effect

By highlighting free benefits, you can create a

positive response in the customers’ minds while
they’re browsing your products. This is explained by
the zero-price effect, which suggests that people do
not simply subtract costs from benefits but instead
they perceive the benefits associated with free
products as higher (9).

Not only that, but free add-ons are fast becoming

a consumer expectation. According to a recent
report from NRF, 75% of consumers surveyed expect
delivery to be free even on orders under $50, up from
68% a year ago. What’s more, “unexpected costs” is
the top reason why people abandon shopping carts.

If you’re offering freebies as a purchasing incentive,

try showing a slash mark through the original
price of the item. A better understanding of exactly
how much they’re getting for free will persuade
consumers to follow through with their purchase.

Loss aversion

Loss aversion refers to our tendency to prefer

avoiding losses to acquiring equivalent gains. For
example, it’s better not to lose $5 than it is to find $5.

You can achieve a similar effect in your marketing

by including the count of an item, such as noting “7
left in stock” or something to that effect. The mere
possibility of losing the chance to buy what you
want can be an incredibly strong driver to purchase
-- in fact, some studies have even suggested that
losses are twice as powerful, psychologically, as
gains. (10).
Salience

The salience bias predisposes us to focus on items

that are more prominent or emotionally striking
and ignore those that are unremarkable, even
though this difference is often irrelevant by objective
standards (11).

Fresh Electronics uses this tactic to bring your

attention to a special deal by highlighting it in yellow.
You’ve also probably seen this tactic used in brick-
and-mortar stores -- most likely in the form of signs
calling out a sale in bright, contrasting colors. Next
time you see this bias demonstrated, do the math to
figure out how much the discount really is. Chances
are, it won’t be as significant as the loud and colorful
sign makes it seem!

Least effort

Finally, Fresh Electronics demonstrates an awareness

of the principle of least effort. This theory postulates
that animals, people, and even well-designed
machines will naturally choose the path of least
resistance or “effort” when setting out to accomplish
a task.

In the case of our e-shop customers have the

ability to choose the “Buy Quickly” option. This lets
customers who have previously saved their details
on the e-shop’s site to skip a few steps ahead in the
purchasing process. Reducing the process to only a
few clicks removes unnecessary friction and creates
a better customer experience.
5
The Purchase
Principle 9: Subliminal Stimuli
You’ve made it to the homestretch: your cart has a
phone in it and you think you’re ready to purchase.
Suddenly, you see a banner advertising free delivery
if you use the code “ONLINEPAYMENT” at checkout.
Rather than abandon your cart (which happens
in the e-commerce world 76% of the time), you’re
excited by the free shipping deal so you continue
with your purchase. The tactic Fresh Electronics is
using here is called subliminal messaging.

Subliminal stimuli are any sensory stimuli below an

individual’s threshold for conscious perception (12).
The discount code “ONLINEPAYMENT” is a message
designed to bypass the conscious mind, appealing
to the unconscious and pushing you to a single
action: online payment, even though it’s not a
condition of the offer.

Another common form of subliminal messaging

in marketing is the “frequently purchased with”
approach. You see that Fresh Electronics employs it
as you prepare to enter your payment information.
When you look at the items in your cart, you’ll notice
this section just underneath, inviting you to add a
few related extras before you checkout.
How to in Exponea:

Fresh Electronics is using an Exponea feature called

collaborative filtering to generate these personalized
recommendations, which are partially based on
the preferences of other customers with similar
characteristics. If they’re relevant, they can increase
the time customers spend on your website and
prompt them to make more purchases.
Bonus!

See how an Exponea client used

collaborative filtering to increase the
click-through rate on recommended
products by 460%.
Principle 10: The Sunk Cost
Fallacy
Your mobile device of choice is in your cart along
with any accessories you decided to tack on and
your free shipping coupon has been applied. You
click the checkout button. Instead of giving you the
option to pay, Fresh Electronics asks you for your
email in order to confirm your order. Doing so will
create an account and register you on the e-shop’s
website.
You’re so close to making the purchase at this point
you go along with it, even if you don’t really want to
spend the extra time registering for an account. This
is known as the sunk cost fallacy.

The sunk cost fallacy says that people demonstrate

a greater tendency to continue an endeavor once
an investment in money, effort, or time has been
made. (13) In other words, you’re likely to figure that
you’ve made it this far, so you might as well finish.

Fresh Electronics knows this, so they don’t ask you

to register until you’re at the end of the process.
This way, they’re more likely to obtain you as a new
contact in their database in addition to making a
sale.
How-to in Exponea :

Exponea Experiments makes it easy to change every

step of your checkout process to find what works for
your customers. Different customers have different
needs, which is why Exponea lets you AB test
different checkout paths to see which works best
for your business. The best part? It can all be done
with a visual editor. No need for lengthy hardcoding
processes.
Conclusion
Exponea makes it easy to incorporate marketing
psychology-based strategies into your sight and
marketing materials, all from one platform.

Learn how to apply insights from behavioral psychology to your

site. Our free email course will walk you through each section
of a typical e-commerce site, with tips tailored to each section.
Register and get our top tips straight to your inbox.

SIGN UP TO FREE EMAIL COURSE

Once you have knowledge of marketing psychology,

using it requires you to be able to do three things:

• Collect data about your customers and visitors.

• Analyze your data in meaningful ways.
• Act on your analysis.

Exponea is purpose-built to help you accomplish

each of these steps.
Collecting data

Exponea can ingest your customer data from all

sources. Web data is easily captured using a short
piece of tracking code. Other data, like in-store,
call center, CRM, or anything else you collect, can
also be sent to Exponea using either a flexible data
import option or native integrations.

Since Exponea can collect data from any imaginable

source, it lets you build the most complete picture of
your customers possible. Demographic, behavioral,
transactional, event data, campaign-level data and
more give you a 360 degree customer view.

Analyzing data

Exponea offers more than just data collection and

retention. It also provides a full-fledged analytics
suite to help you uncover insights hidden in your
customer data.

The fundamental building block of Exponea’s

analytics is the customer (unlike other analytic
solutions that start with the “session”).
This customer-centric architecture gives you deeper
insights into how your customers behave, and how
to best reach them.

This data can help you discover both how your

marketing psychology-inspired tactics are working,
and where you can potentially try out new tactics for
the biggest impact.

Acting on your data

Exponea gives you all the tools you need to turn your
customer data and insights into high-performing
campaigns, sites, content, and more.

With Exponea, you can easily transform your content

so that it adapts to the customer that’s seeing it. Is
someone a first-time visitor to your site? Exponea
can detect that, and then show them user reviews
on your home page to create social proof.

Creating such a campaign can be done easily with

Exponea’s drag-and-drop campaign editor. You
can even enhance these campaigns with AI-driven
recommendations and predictions.
Imagine being able to predict a customer’s
likelihood to purchase during their browsing session,
then automatically changing site content based on
that prediction. You could, say, show a countdown
banner to customers with more than a 50% chance
of purchasing to nudge them towards taking an
action.

Exponea’s total flexibility lets you act on your data in

almost any way you can imagine. Comprehensive
customer knowledge combined with a complete
execution solution makes Exponea the ultimate
marketing psychology tool.

If you want to start using psychology-based tactics

for your brand, schedule a call with Exponea.
Glossary
Anchoring: A bias that occurs when an initial piece of information is
used as a baseline for all subsequent judgments or decisions.

Center-stage effect: Research shows that in a vertical or horizontal

lineup of products, we tend to prefer the one placed in the middle.

Cognitive bias: A systematic pattern of deviation from norm or

rationality in judgment.

Doubt-avoidance: A stress-triggered tendency to ignore or remove

feelings of doubt about a situation by making an ill-informed, quick
decision.

Framing effect: A bias in which people decide on options based on

whether they’re presented with positive or negative connotations;
e.g. as a loss or gain.
Heuristics: An approach to problem solving allows the brain to
ignore information in order to reach a decision faster.

Hyperbolic discounting: A bias that says given two similar rewards,

we will show a preference for one that arrives sooner rather than
later, even if the later reward is of higher value.

Least effort: A theory that postulates animals, people, and even

well-designed machines will naturally choose the path of least
resistance or “effort” when setting out to accomplish a task.

Loss aversion: The tendency to prefer avoiding losses to acquiring

equivalent gains.

Marketing psychology: A school of thought that borrows from

behavioral sciences in order to analyze how a person’s feelings and
perceptions influence their buying habits.
Nudge theory: A concept that proposes positive reinforcement and
indirect suggestions as ways to influence the behavior and decision
making of groups or individuals.

Reciprocity: The tendency to feel a sense of indebtedness when

given something, even when faced with an uninvited favor.

Salience bias: The tendency to to focus on items that are more

prominent and ignore those that are less so.

Scarcity: The tendency to place a higher value on an object that’s

scarce, and a lower value on those that are in abundance.

Social proof: The theory that people will adopt the beliefs or actions
of others when presented with them.

Subliminal stimuli: Any sensory stimuli below an individual’s

threshold for conscious perception.

Sunk cost fallacy: The theory that people demonstrate a greater

tendency to continue an endeavor once an investment in money,
effort, or time has been made.

Zero-price effect: The theory that people do not simply subtract

costs from benefits but instead they perceive the benefits
associated with free products as higher.
References
1. Gigerenzer, Gerd; Brighton, Henry (2009). “Homo Heuristicus:
Why Biased Minds Make Better Inferences”. Topics in Cognitive
Science. 1 (1): 107–143.

2. Haselton MG, Nettle D, Andrews PW (2005). “The evolution of

cognitive bias”. In Buss DM (ed.). The Handbook of Evolutionary
Psychology (PDF). Hoboken, NJ, US: John Wiley & Sons Inc. pp.
724–746.

3. Mittone, Luigi; Savadori, Lucia (2009). “The Scarcity Bias”. Applied

Psychology. 58 (3): 453–468.

4. Shea, Michael (2015). “Living with FOMO”. The Skinny.

5. Paese, Paul W.; Gilin, Debra A. (2000). “When an Adversary

is Caught Telling the Truth: Reciprocal Cooperation Versus
Self-Interest in Distributive Bargaining”. Personality and Social
Psychology Bulletin. 26 (1): 79–90.

6. Plous, Scott (1993). “The psychology of judgment and decision

making”. McGraw-Hill.

7. Valenzuela, Ana & Raghubir, Priya. (2009). Position-based

beliefs: The center-stage effect. Journal of Consumer
Psychology - J CONSUM PSYCHOL. 19. 185-196.

8. Saghai, Yashar (2013). “Salvaging the concept of nudge”. Journal

of Medical Ethics. 39 (8): 487–93.

9. Shampanier, Kristina, Nina Mazar, and Dan Ariely. “Zero as

a Special Price: The True Value of Free Products.” Marketing
Science. 26.6 (2007): 742-757. Print.
10. Kahneman, D. & Tversky, A. (1992). “Advances in prospect theory:
Cumulative representation of uncertainty”. Journal of Risk and
Uncertainty. 5 (4): 297–323.

11. “Salience Bias - Biases & Heuristics.” The Decision Lab, (2020),
thedecisionlab.com/biases/salience-bias.

12. Loftus, Elizabeth F.; Klinger, Mark R. (June 1992). “Is the
unconscious smart or dumb?”. American Psychologist. 47 (6):
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13. Arkes, Hal R.; Ayton, Peter (1999). “The sunk cost and Concorde
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