Let’s go into two of the most important elements behind the buying psychology: emotions and logic.

Buy on Emotions, Justify It with Logic

Does someone buy a Mercedes because it logically makes sense? No – they buy a Mercedes because of how they believe they’ll feel when they own the car. The luxurious feel. The envy from others. The sense of pride, of power.

Then they tell themselves: “I’m buying it because I need to impress clients.” Or “I’m buying it because if it helps me land just one deal, it’s almost paid for itself.”

The reality is, however, buying decisions are almost always made on desire. Only once a strong desire has made the decision, then logic is used to justify the buying decision.

How can you use this to your advantage?

First of all, perhaps the most important skill you can master as a marketer is the ability to create desire. If you can instill a sense of excitement, of urgency, of tangible desire to own your product in your potential customers, your ability to sell will go up dramatically.

The other thing to take away from this principle is how important it is to help lay out the logic your client needs to justify the purchase. If you can explain why they’ll make their money back from their investment, you make it much easier for them to give in to their desire to own the product.

The Importance of Believability

Marketers and salesmen often try to make huge claims. It’s almost as if they’re in a competition to see who can make a bigger claim that nobody believes.

The most important thing in getting people to buy isn’t making big claims. Instead, it’s getting believability.

If I could convince you that I could show you how to make an extra $2,000 a month for no additional effort, all it would cost you is $50 and you believed me 100%, how likely are you to say yes?

On the other hand, if I tried to convince you I could make you a million dollars and you didn’t believe me, how much would you pay me for that?

The most important thing really isn’t how big a claim you can make, but how big a claim you can make your customers believe.

Desire is built on claims people believe. If someone really believes their lives can be better, they’ll get excited. Logic is also built on claims they believe. If someone really believes that buying that new Mercedes is worth the investment, they’re much more likely to spend the money.

The psychology behind buying is in some ways simple. Get people to want your product and remove the logical reasons why they shouldn’t. It’s also a skill that can take a lifetime to master.

This might seem non-sensical at first. Afterall, the client is the one paying you, so shouldn’t they have complete control? The simple answer is no, and here’s why. Quite often, clients don’t know exactly what they want, and quite often, they have no idea what kind of time or effort goes into the services you provide.

This means that if you constantly defer to the client to ask them what they’d like over the course of your project, you may find yourself giving them choices that they don’t need to be making, and aren’t really necessarily capable of making. This can turn an otherwise simple project into a nightmare.

If you’re working on an hourly basis, then clients making changes left right and center might not be a big deal since the more changes they make, the more hours you’ll bill. However, if you’re working on a per project basis, then the fewer changes and alterations you have, the better. And this means that if you can keep as much control over the details of the project as possible, you’ll end up having to deal with far less revisions.

The reality is, if you defer to the client for input on every small detail, they’ll probably end up asking for things that might be outside the scope of the price you quoted or impossible due to time restrictions. However, had you just made those decisions yourself, you’d never have had to deal with that at all.

Always make sure that everything that you’re going to deliver and all details are worked out and carved in stone contractually before you start a project. If your client doesn’t know exactly what they want, then either have them think harder about their requirements, or make it very clear to them that further revisions or changes will be billed on top of the initial price.

Some clients will try to work you to death for the least amount of money possible, and these aren’t the kind of clients you want to deal with. Avoid that problem by making sure that any time a project isn’t clearly defined from the start, that the clients understand that either a) creative control is in your hands or b) that they have the option of asking for revisions, but they will be billed for any changes that require extra time or work.

The book is a great read for anyone involved in sales or putting together pricing structures, because it touches on one very interesting piece of information that can have a drastic effect on sales figures, if put into practice properly. We’ll examine that phenomenon, which we’ll call pricing relativity, or perhaps better, value relativity.

The book details a set of studies done at academic institutes in the United States in which test subjects were given sets of offers and asked which they would be most likely to buy. The results showed an incredibly interesting trend which demonstrated that people do not make buying decisions based on absolute value, they make buying decisions based on relative value.

Essentially, it’s not the perceived value of the particular item that counts, what matters is the perceived value of that item in relation to other similar items.

For instance, one example used in the book is a magazine subscription ad in which the available subscription options are a) online only for $59  b) print only for $125 or c) print and online for $125. When confronted with this set of options, the vast majority of subjects chose option c, print and online, while some chose option a, and almost none chose option b.

The test was then run again, but this time, option b was removed. If people were making their buying decisions logically, in theory the results should be the same. After all, the absolute value of option c has not changed, and the only option removed was the one that no one chose anyways.

However, the actual results showed that in the second test, the majority of subjects chose option a, the cheaper online only subscription, while only some choosing the higher priced option. What had changed?

The difference in the two tests is that in the second test, option b, the “decoy” had been removed. In the first test, option b was $125 for print only, and option c was also $125 for both print and internet. Therefor, while the absolute value of option c had not changed, the relative value of option c was significantly higher in the first test because it was sitting beside an option of equal price, but less perceived value.

After all, if print only is $125 and print and online is also $125, then seemingly if we choose option c, we’re getting the online subscription free of charge! In the second test, with the decoy removed, people now no longer have that comparison to make, and with the relative value of option C now diminished, many opt to go for the cheaper option.

Understanding this pattern in buying behavior can help you in setting your pricing and in boosting sales for slow moving products. For instance, if you have only one product for sale, and you’ve found that it isn’t selling the way you’d like it to, consider introducing a more expensive version of that item.

While you may sell some of the higher end version, the real effect will be that people will now have a comparison to make, and in relation to the more expensive option, the original item will seem of greater value, and sales may increase substantially.  This very scenario has been tested and proven to work in the past.

This concept of relative value driving people’s buying decisions is an exceptionally important one for any entrepreneur to understand and I’d highly recommend you read into it in depth. The book is called Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely and as well as this topic, it covers many other areas of human decision making that can be applied to help your business succeed.