Running promotions is a solid way of increasing revenue for any business, online or brick-and-mortar. Promotions are great because they get your audience’s attention and create events that give your audience a reason to listen to you. To improve the overall conversion rate during promotional campaigns, sales psychology tactics are often used.

What is sales psychology?

Sales psychology or the psychology of selling is a concept that not many online businesses are familiar with. Personally I find this to be a fascinating topic. In this blog post I will share three of the most common sales psychology tactics used in promotional campaigns: anchoring, scarcity and foot-in-the-door.

These are tactics that work very well both with product and service businesses, and apart from being quite popular methods of persuasion, not many businesses are actually using them in their sales process.

That’s because business owners have a lot of head trash around selling and not looking the part of the sleazy sales reps when trying to get prospects to become customers. The psychology of selling can help improve your conversion rates without seeming overly pushy or “sales-like”.

The psychology of selling has been popularized by Dr. Robert Cialdini in his bestseller Influence. There are six key principles that he identified: reciprocity, commitment, authority, social proof, liking, and scarcity.

Types of promotions

When thinking about promotions, the most common come to mind – the seasonal product sales such as Black Friday, Cyber Monday, Boxing Day, Amazon Prime Day, Christmas and New Year, Back to School etc.

This type of promotion is seasonal and has one goal: engage and excite your prospects and customers with big discounts that either convert non buyers to customers or get one time customers back into the offers you sell.

Other promotions are one-time only and are specific to your business model (running a promo for your annual membership, new customer upsells, various launches of new products throughout the year etc). These are referred to as monetization promotions, and they aim to get your prospects to buy your core offer or a new product you are launching.

Regardless of which one you decide to focus on next, there are a couple of powerful sales psychology methods of persuasion that you should not overlook when planning your next promotion.

Anchoring

It doesn’t matter if you are selling online or in-person, sales psychology is what will drive your customers to purchase. There are many techniques that can be used for psychological selling and one of the most common ones is price anchoring. This technique involves displaying a higher priced item next to a lower priced item and then showing them that they can get both items at an even better price by purchasing together.

This psychological tactic is used a lot by online retailers when running promotions. It is a simple, but very effective tactic to inspire action and urgency.

Anchoring is a term used in psychology to describe the common human tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions. Once the value of this anchor is set, all future negotiations, arguments, estimates, etc. are discussed in relation to the anchor.

In other words, people tend to base their decisions on the first piece of information they receive and will hold everything else against that standard.

Online shops will use anchoring to make their sale prices stand out. Here’s an example from ASOS.

Here’s how Amazon does it:

A lot of membership based businesses are using this tactic when they present a client with the option to choose a monthly or an annual plan. The company focuses on converting more of its potential customers to their annual payment upfront than get a recurring monthly payment. So it will use anchoring to create the perception that people would be saving money if they pay for the full year now by displaying how much they are saving with an annual plan vs a monthly one.

Take Zoom for example. The annual plan is $149.90 which split by 12 months goes down to $12.49 compared with the $14.99 monthly payment plan.

How do you use anchoring in your promos?

• By clearly stating the initial price of the product and then display the sale price right next to it.

• You can also use a percentage off type of info to explain the discount.

• In showing how much people can save with a monthly vs annual plan (specific for membership businesses).

How do you convey anchoring in your communication?

• On your product/sales pages clearly indicate the initial price and the discounted price.

• Use color to make the prices stand out (red is most often used, and strikethrough the initial price).

• In any follow up communication that aims to get your customer to take action and take you up on your deal.

Word of caution

Anchoring is highly effective. Studies have proved that we are unduly affected by the first numbers we see. But this means you have to pay attention to your pricing strategy, how you convey the value of your offers, how often and how large are the discounts you are offering.

Scarcity

There’s little more powerful in demanding your attention and action than seeing a message on your screen saying there’s only “3 seats left at this price” as you look for airplane tickets or book seats at a theater play or that awesome concert you’ve been waiting for.

Displayed in the form of a banner that usually employs some sort of attention grabbing color marking the text “3 left at”, this psychological tactic is a great way to get people to pay attention and take action when running your promotions.

The scarcity principle is as simple as it gets – and it plays into some deeply rooted emotions, like the fear of missing out.

Hubspot explains the scarcity principle as “the rarer the opportunity, content or product, the more valuable it is to a consumer”.

Here’s an example from Etsy:

How do you use scarcity in running your promos?

• Low stock notices (only 3 in stock or limited edition – only a few remain)

• Limited quantity (only 3 spots open)

• Next-day shipping countdowns

• End of sale countdowns

• High demand (10 people are looking at this right now, 10 other people have this in their cart right now)

How do you convey scarcity in your communication?

• Have countdowns or scarcity messages in your sales pages and at checkout

• Use emails to remind people that they only have X time left before their offer goes away or go with abandoned cart emails if you have a short time window

• Use retargeting with Facebook to let people know they’ve left something in their cart or that they have only X time left before their desired item/offer goes away

Word of caution

Scarcity is a powerful psychological tactic to use in increasing the performance of your promotions. But do not abuse it, do not fake it. Your clients are not stupid and they will know if they are being played.

Foot-in-the-door

You will see smart marketers do this all the time.

The foot-in-the-door psychological tactic is essentially a compliance tactic that assumes agreeing to a small request increases the likelihood of agreeing to a second, larger request.

What this means is if you get your website visitor, lead or potential customer to say “Yes” to a smaller commitment, you are more likely to get them to say “Yes” to something bigger.

In marketing and selling terms this can translate to entering visitors and leads into a funnel that delivers massive free value in the form of a webinar, checklist, ebook etc and then tries to convert them to saying yes to an offer.

It can also be seen in email marketing segmentation tactics to determine which promotion is going to be received by whom. For example, someone who has bought a lower priced offer, like a tripwire for anything under $27 is more likely to buy something else from you, either priced at a similar point, or higher – if that offer is going to solve a specific pain point.

For someone who is new to your brand (and email list), trying to sell them straight to an expensive offer is going to be a difficult task if you don’t spend time nurturing them, educating them about your product, helping them out with valuable content that aims to solve their problem.

According to the authors of the theory, initially you make a small request and once the person agrees to this they find it more difficult to refuse a bigger one (Freedman & Fraser, 1966). It works because people have a natural need for consistency.

Here’s an example of a simple foot-in-the-door example reflected in a tripwire funnel:

How do you use the foot-in-the-door tactic in running your promos?

• Become familiar with the concept of buyer journey and figure out what sort of micro-commitments leads in each stage will need to advance to a new phase (social media shares, joining a Facebook group, leaving comments, viewing specific pages, adding products to a shopping cart, sending a testimonial, downloading resources, watching videos, etc)

• Use segmentation in deciding who is going to receive your promo by the type of action (or Yes) that got them in your list

• Use tags to keep track of your leads and where they are in their buyer journeys

• Use funnels that start with a free valuable resource as the first step to get people to see your offers

• Nurture your audience and educate them to take micro-commitments throughout time to keep them warm and familiar with your tone of voice, and content

These three psychological concepts are some of the most common, and effective tactics used in promotions by marketers worldwide. Customers sitting on the fence will be more inclined to make a purchase when marketers use these powerful psychological methods of persuasion.

How about you? Are you using any of these three psychological methods in your promotions?

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