Digital Marketing

The Power of Leveraging Consumer Psychology in Digital Marketing

At the time of writing (2nd January 2020), there are 1.8 million active websites on the Internet, with 1.6 billion in total existence. This means that catching attention, generating interest and retaining customers is becoming more and more difficult.

That said, there is a secret weapon to cut through those 1.8 million sites. That secret weapon is digital psychology...

What is digital psychology?

Psychology isn’t a new phenomenon. Psychologists, behavioural scientists and neurologists have spent centuries picking apart the endless maze that is the human brain to discover how our minds function and what makes us tick.

Digital psychology, however, is a relatively new concept. It combines digital marketing with behavioural economics and psychology to uncover how people behave specifically online. 

The role of digital psychology

We live in a world full of numbers and statistics. Tools like Google Analytics make it easier than ever to track WHAT your customers are doing, however, digital psychology looks at unearthing WHY they are doing it. 

Ultimately, digital psychology strives to give an explanation as to why your customers behave the way that they do and identify how you can create a form of online communication that is persuasive to the unconscious mind.

Digital psychology helps optimise digital marketing strategies where raw numbers can’t. This deeper level of understanding lends itself to multiple fields within the online world. 

From customer acquisition, through to user experience and retention, we see digital psychology techniques such as social proof, effort, validation and reciprocity. These tactics fall across many areas of marketing, for example, sales, branding and user experience design, each aiming to increase conversion. 

Digital psychology’s role in the digital marketing landscape is a strategic vision piece. Digital psychology isn’t a tactic in itself – it’s a way of thinking that can be applied across the digital marketing mix at a strategic level. Any and all marketing efforts should take into account psychology in the planning phase. 

Why is digital psychology important?

Digital psychologists look at the way Internet users browse search engines, how much content they consume, how they interact with information and when they purchase products/services so that businesses like yours are better able to position themselves in the digital ecosystem.

It is essential for marketers to understand the psychological factors that influence consumers’ decisions, also known as consumer psychology. This has been widely studied in-store with traditional marketing methods, but the online world is still a few steps behind.

Whilst we could argue that it is easier to influence a customer’s decisions in-person, there are tactics we can use online to be just as influential, if not more! In some ways, influencing online decisions leads to a better customer experience.

Picture this: you visit a car dealership for a casual browse and get approached by a pushy salesman with his awkward face-to-face sales conversations and pushy lines. We’ve all been there. And 9 times out of 10 it’s a turn OFF. Hard sales tactics are a thing of the past. 

Priming, prepping and persuading are key. And these techniques involve a level of psychological understanding. Encouraging customers to make their ‘own’ decisions in their ‘own’ time is far more effective than ramming sales spiel down their necks. 

A good marketer understands the consumer's emotions and uses these to form a bond between the consumer and your product/service. To understand the buyer's emotions, you need to find out the psychology behind their behaviour. Understanding how your target market and customers think will make it much easier to come up with a marketing strategy that will bring the desired results.

By understanding consumer psychology, marketers can predict and influence consumers’ behaviour through their digital marketing strategies. Pair consumer psychology with digital marketing and there you have it; digital psychology. The pot of gold at the end of the rainbow!

Digital psychology can help marketers:

  • Understand why their customer buys products/services online
  • Increase conversion rates
  • Reduce bounce rates 
  • Increase average spend per transaction
  • Retain current customers 
  • Increase repeat purchasing
  • Apply testing methodologies

Digital psychology and cognitive biases

Often, consumer behaviour and decision-making are based on heuristics. These are subconscious decisions your mind makes without consulting the rational, logical part of your brain (the conscious mind). Heuristics are mental shortcuts that we rely upon to save time and effort because they avoid thinking through the next course(s) of action. 

digital psychology and heuristics
Common uses of heuristic [image credit]

Heuristics have formed over millennia as humans have evolve, and although they often make day-to-day decision-making and general life much easier, they can lead to errors of judgement. We can become reliant on these heuristics which in some instances lead us to make rash, emotion-led decisions or express irrational behaviour. These errors of judgement are known as cognitive biases and are hardwired into our brains. 

Savvy marketers know that tapping into these cognitive biases can have huge gains in the digital marketing industry. Playing on the power of cognitive biases is an extremely effective way of incorporating digital psychology into your marketing strategy...

5 areas of consumer psychology to leverage in digital marketing

Whilst well over 100 cognitive biases exist, we want to take a look at a select few that have proven to be particularly effective in digital marketing. 

There’s no one-size-fits all approach to companies and, in an ideal world, you would intertwine multiple techniques to achieve your goals.

1. Scarcity as a psychological tactic

If you’re not familiar with the psychological tactic, you must have been living under a rock for the last decade. The scarcity ‘trick’ creates urgency which in turn increases consumers’ desire to buy so as not to miss out on the opportunity. 

Using scarcity is a particularly effective aspect of digital psychology for ecommerce businesses where products can be presented as ‘low in stock’ or ‘in high demand’. However, service-based businesses can also take advantage of the scarcity tactic by offering limited time discounts or a limited number of appointment slots for consultations, for example. 

Research shows 4 main ways that the power of scarcity was used:

  • In Short Supply: ‘only 1 room left’ ‘only 10 in stock’ ‘limited supply’ increase urgency to buy before stocks deplete  
  • For a Limited Time: ‘24 hour flash sale’ ‘1 week only’ ‘early bird special price until x date’ increase urgency to buy before the end of the limited time period
  • High Demand: ‘1,437 sold today’ ‘5 other people are looking at this right now’ emphasises popularity and increases the likelihood of buying
  • Unique Opportunity: ‘members only’ ‘unique discount code’ ‘VIP access’ make individuals feel privileged to have such an offer presented to them, making them more inclined to buy 

Booking.com is a genius at incorporating digital psychology into their marketing. Try to make a reservation anywhere and you’ll be told something along the lines of: ‘only 1 left on our site’ ‘43% of hotels for your dates are already booked’ or ‘300 apartments like this are already unavailable for your dates’. 

Not only does this create an incredible sense of urgency, it also positions them as credible, trustworthy, reputable, reliable and popular - hitting that human need for social proof! 

Scarcity increases urgency to book

2. The decoy effect in digital marketing

This cognitive bias forms the foundations of many pricing models. As the term ‘decoy’ suggests, it is a lure or a trick to encourage customers to make a guided decision. 

Specifically, the decoy effect refers to adding a third pricing point into the mix in order to make one of two others appear more attractive.

Take a look at monday.com’s pricing below - given the choice between just a Basic (£7) or Pro (£14) subscription, a customer may feel that paying double the amount for the Pro membership isn’t really justified. 

Enter the Standard subscription. This falls somewhere between the two (usually closer in cost to the lowest price point), and suddenly the Pro subscription seems like a great option. It’s just £5 more than the middle tier, as opposed to double the cost of the lowest. It immediately feels like great value, especially considering the extra features you get for just an additional fiver!

This rule of 3 price-pointing model is an effective digital psychology strategy that, when deployed correctly, can not only increase sales and revenue, but can encourage consumers to purchase exactly the option you want them to. 

decoy effect as a digital psychology method
Decoy effect in pricing influences purchase-decisions

3. Loss aversion in digital psychology

Loss aversion bias refers to our human tendency to prefer avoiding losses to acquiring equivalent gains. In other words, the fear of losing far outweighs the pleasure of winning.

Think about it: losing £100k would hurt much more than the joy of receiving £100k.

The psychology of loss aversion

You can harness this psychological phenomenon in the way you position your product or service. For example, many SaaS companies offer free trials as a way of priming a new customer. The free trial requires very little commitment from the consumer with nothing to lose, or so they think...

The loss comes when their free trial is over! During the course of their free trial they will have built a subconscious emotional connection. Not emotional in the sense of attaching ourselves to another human being, but emotional in terms of reliance and dependency. Their everyday lives may have become a little less stressful, their everyday tasks more efficient, all thanks to the software or platform. Therefore, paying a measly £10 or so per month to keep said software/platform avoids the much bigger loss associated with losing access. 

SaaS marketers know that free trials are the best hook for long-term subscription commitments because once a potential customer becomes an actual customer, there’s also upgrade opportunities within the platform. Don’t underestimate the power of a free trial.

Ecommerce stores with tangible products can also take advantage of this cognitive bias. One of our favourite brands of 2020 does exactly this in a completely innovative way that makes them stand out in their industry.

Snif. A fragrance-buying experience like never before! Get free samples straight to your door, alongside the full-size perfumes. Don’t like the sample? Send the big bottle back. Like the sample? Keep the big bottle and pay for it.

loss aversion in digital psychology
Snif uses loss aversion to increase sales and revenue

The digital psychology associated with this? The loss of the big bottle. Once it’s in the clasp of your palm it becomes so much more difficult to return. A great tactic! 

4. Reciprocity as a psychological technique

Giving and receiving. It’s a natural balance of human life. When we receive something for free, we feel indebted to that person or organisation, meaning we want to give something back (usually financial remuneration). 

We experience reciprocity in our everyday lives. For example, have you ever invited someone to a party just because they invited you to theirs? Ever bought a Christmas gift for someone because they bought one for you? It's a human tendency to feel a sense of obligation to do something for someone when they’ve done something for you.

In a consumer society, the principle of reciprocity is a powerful tool. Giving away freebies builds relationships and loyalty, ultimately priming the recipient for becoming a paying customer. It’s not only effective in the acquisition of new customers, it can also facilitate longer-lasting relationships with existing customers. Reciprocity is a fantastic way to build advocacy. 

Consider these 5 core pillars of reciprocity:

  1. Make customers feel special and unique - personalise correspondence and outreach 
  2. Give customers a gift of value that benefits their lives - don’t give away pointless stuff, target your customers’ pain points. Free education is a winner.
  3. Suggest ways that customers may reciprocate - a donation, a discounted purchase, a trial.
  4. Be the first to give - don’t wait for an enquiry for more information, provide a free download.
  5. Don’t let the circle end - keep giving until they convert! A prime opportunity for some email marketing.

5. Social proof in digital psychology

One final, sure-fire way of using digital psychology is showing social proof of your product or service. Studies show 92% of online consumers read at least one product review prior to making a purchase, with the majority of shoppers reading between 1 and 6 reviews before committing to a decision.

social proof reviews in digital psychology
No. of product reviews typically read before making a purchase decision

We humans like to follow the crowd, so if we see that someone has had a positive experience of a product or service, we are far more inclined to try it for ourselves.

There are a number of ways you can showcase social proof:

  • Testimonials and customer reviews 
  • Total subscribers 
  • Total number of social shares 
  • Success stories by your customers 
  • Third-party certifications 
  • Security badges 
  • Client logos 

A great example of a company who uses reviews as social proof is Amazon. See pretty much any product listing and you’ll have reviews into 3, 4 and 5 figures to scan through before making a purchase decision.

social proof in digital psychology - amazon
Amazon uses social proof to increase conversions

Digital psychology and customer experience

The ultimate goal of digital psychology is to optimise your digital marketing strategies to increase conversions.

With that in mind, it is key to create a seamless user journey where you subconsciously target all the right psychological spots to make them become a customer, without being overt or explicit about them. Remember the pushy sales guy we’re trying NOT to be like!

Digital psychology is about targeting the subconscious and incorporating techniques seamlessly into your marketing.


I hope you enjoyed reading this blog post.

If you want Beyond Agency to do your marketing for you, click here.

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