Promotions can play a significant role in the success of e-commerce websites, and by strategically offering discounts, deals, and special offers, businesses can tap into the psychology of consumers in order to drive sales.
On-line promotions can be a powerful tool for influencing customer behaviour, and understanding the psychological factors that influence the decision-making process when products are on promotion is crucial for maximizing the effectiveness of promotional campaigns.
Below, we’ll cover some of the psychological factors that influence user behaviour when it comes to the perceptions of promotions, and making purchasing decisions.
Creating a Sense of Urgency
One of the key psychological drivers in for online promotions is creating a sense of urgency. Time-limited promotions or limited stock availability can trigger the fear of missing out (FOMO) among consumers, and by instilling a sense of urgency, businesses can motivate customers to make a purchase decision promptly, fearing they might lose the opportunity to secure a good deal.
Time-limited promotions can also generate excitement and a sense of exclusivity, driving impulse purchases and increasing conversion rates.
Perceived Value and Discount Framing
When products are put on promotion, customers perceive them as having higher value compared to their regular price. The perception of value is influenced by the concept of discount framing. Presenting a product’s discounted price alongside its original price creates a contrast that enhances the perceived value of the promotion.
For example, a product priced at R50 with a 50% discount seems like a better deal than a product priced at R25 with no discount, even though the final price is the same. By leveraging discount framing, businesses can influence customer perceptions and make promotions more enticing.
Social Proof and Influence
Human beings are social creatures, and our decisions are often influenced by the actions and opinions of others. Promoting products on an e-commerce website can leverage the power of social proof to drive sales. Including customer reviews, testimonials, or showcasing the popularity of a product through ratings and “bestseller” labels can enhance customers’ trust and confidence in making a purchase.
When customers see that others have benefited from a promotion or have had a positive experience with a product, they are more likely to follow suit, increasing conversion rates.
Anchoring is a cognitive bias in which people rely heavily on the first piece of information they receive when making decisions. When products are placed on promotion, the original price acts as an anchor, influencing customers’ perception of the discount.
For example, if a product is initially priced at R100 and is then marked down to R75, customers perceive the R25 discount as more substantial compared to a product originally priced at R80 with the same R25 discount.
By strategically anchoring the original price and highlighting the discount, businesses can influence customers’ perception of value and incentivise purchases.
Reward and Pleasure Seeking
Promotions tap into the innate human desire for rewards and pleasure. Offering discounts and special deals triggers the brain’s reward centre, releasing dopamine and creating a positive emotional response.
The pleasurable experience associated with getting a good deal enhances customer satisfaction, and strengthens their connection with the brand. By leveraging the psychology of rewards and pleasure seeking, businesses can build customer loyalty and encourage repeat purchases.