Buyer Psychology

Buyer psychology is a fascinating subject that is studied extensively by marketers and researchers over the years. In a SaaS product, understanding the underlying motivations and decision-making processes of consumers is essential to sell effectively. In this blog, we will look at examples of buyer psychology that impacts the customer journey through the path to purchase.

Social Proof

Social proof is a powerful psychological phenomenon that influences buyer behavior. It refers to the tendency of people to look to others for guidance on decisions making. Positive reviews, ratings, and testimonials from other customers can serve as social proof, increasing the likelihood that a potential buyer will make a purchase. Social proof is particularly effective when it comes from sources that the buyer trusts or identifies with, such as friends, family, or influencers. By incorporating social proof into their marketing efforts, businesses can establish trust with their target audience and drive more sales.

Example: Asana

A great example of social proof in a SaaS subscription is the project management tool Asana. Asana uses social proof in several ways to encourage more users to subscribe to their service.

One way Asana does this is by prominently displaying the logos of well-known companies that use their service, such as Amazon, Spotify, and PayPal etc. This provides social proof to potential customers that Asana is a reliable and trusted service that is used by successful businesses.

Asana also uses social proof through its user ratings and reviews on third-party websites, such as G2 Crowd and Capterra. By maintaining high ratings and positive reviews, Asana is able to provide social proof to potential customers that their service is well-regarded and worth subscribing to.

Urgency

Urgency is often used as psychological tactic to encourage customers to make purchases quickly. Companies tend to adopt FOMO (Fear of missing out) that is a based on time or scarcity which motivates customer take action before the deal is gone.

Example: Amazon

Amazon often uses countdown timers or limited stock warnings on their product pages to create a sense of urgency. For example, a product might have a message that says “Only 2 left in stock – order soon” or “Sale ends in 2 hours”. This creates a sense of urgency in the customer, making them more likely to make a purchase before the product runs out or the sale ends.

By using urgency as a buyer psychology tactic, e-commerce websites like Amazon are able to improve their sales by motivating customers to take action quickly before a product or sale is no longer available.

Price anchoring

Purchase anchoring is a psychological phenomenon that refers to the tendency of customers to rely heavily on the first or prominent piece of information they receive when making a purchase decision. In other words, the initial price or feature presented to the customer becomes the anchor against which all subsequent prices or features are compared. This can significantly influence a customer’s perception of value and their willingness to pay.

Example: Asana offers several pricing plans, each with different levels of features and functionality. However, they anchor their pricing on their “Premium” plan, which is prominent and highlighted as the valuable option presented to customers. This plan sets the anchor price against which all other plans are compared.

By anchoring their pricing on the Premium plan, Asana creates a perception of value for their other plans. For example, their “Business” plan is priced higher than the Premium plan but includes additional features that are perceived as valuable because they are presented as a significant upgrade from the Premium plan.

Furthermore, Asana uses purchase anchoring in their feature offerings. They anchor their feature set on the core features included in their Premium plan and then add additional features to their more expensive plans. This makes the additional features in their higher-priced plans appear more valuable and enticing to customers because they are presented as a significant upgrade from the anchor plan.

By using purchase anchoring in their pricing and feature offerings, Asana is able to influence customer perceptions of value and increase the likelihood of customers choosing a more expensive plan than they might have otherwise.

To summarise, the psychology of buying is a complex and multi-faceted subject that has important implications for businesses and marketers. By using buyer psychology tactics like Social proof, urgency and Anchoring, companies can create effective marketing strategies that resonate with their target audience and lead to increased sales.

Thanks for reading!