Author: Marcus



Honest, ethical marketers use psychology to influence decision-making based on what customers truly need, not what they think the customers need or what they want the customers to need. This is the key difference that separates the good from the bad, but it’s not always easy to tell what’s ethical and what isn’t.


Ethical marketing doesn’t make false or unverifiable claims. It doesn’t puff up or exaggerate. It doesn’t use subjective claims but rather backs up its claims with objective data. If you tell the truth and are transparent in your marketing, you’ll not only stay on the ethical side but also win over customers who will appreciate this honesty. They will come to trust you and be loyal.

Real Needs

Ethical marketing fulfills actual needs. It doesn’t invent a fake need and then try to sell the solution to it. This is why it’s important to know your customers well and understand their real needs. If your products and service address these needs, you won’t have trouble selling them. As long as your customers have this need, they’ll buy from you if you make a good case for your solutions.


Marketers sometimes like to be edgy in order to gain attention, but ethical marketing is never offensive, inappropriate, sexist, racist, or homophobic. As a guideline when reviewing your marketing materials, always ask yourself whether what you say could be taken the wrong way. If it could be taken the wrong way, it is likely that it will be by someone. Everything should be appropriate.

Kind to Competitors

Ethical marketers don’t attack competitors with smear campaigns or make false comparisons between their products and those of another company. Be careful of what claims you make and stick to showing positively how your offerings help meet customer needs, rather than how others don’t.

Rely on Feedback

Ethical marketing is driven by feedback from real customers. Decisions are based on what customers think and feel, rather than what the company believes its customers should think and feel.

What to Consider for Marketing Tactics

We have covered a dizzying array of marketing tactics related to different principles of psychology. Probably some of them set off a light bulb in your brain saying, “We could use that” or “Our market would respond to that.” Here are some considerations to help you choose appropriate marketing tactics for your market.

What are the demographics of your target market?

While this isn’t a course on creating target market profiles, you should be sure to know the basic demographics of your market. These include location, age, gender, income level, education level, interests and hobbies.

What are the psycho graphics of your target market?

This course has been covering basic psychological principles for marketing, but you’ll need to do the research to truly understand what your own target market is thinking and feeling as it relates to your products and services.

This includes uncovering their problems, fears, pain points, and other emotions as they relate to your products and services. Conduct surveys, participate in forums, have discussions with current customers, and connect with your target market in as many places as possible to understand how they’re thinking and feeling.

Where is your market both online and off?

Identify the best marketing channels for reaching customers and explore how to use these marketing channels effectively.

What forms of content does your market prefer?

Gain an understanding of the content your target market prefers and how they use it. Look at which content is most shared, liked, visited, commented on, etc.

What kind of support does your market need?

What you do after a customer buys is just as important since it affects future purchases, the customer’s influence over other buyers, and brand image.

Keep in mind your brand

All of your tactics and marketing channels need to be consistent with your brand image. Review your brand’s vision, goals, and unique value proposition before selecting any tactics.

Be Flexible with Your Tactics

The best tactics to use vary, even for the same product and same customer. You may use one tactic at first contact but then shift to another at a later stage of your relationship with the customer. You may also have different tactics for different demographics of your market, or for different products.

As an example, let’s look at how different tactics could be employed at the five steps we outlined earlier in the buying process.

Recognition – Mere exposure can help your brand come to your customers’ minds when they feel the need for your products.

Information – You can use reciprocity to not only inform your customers about your brand, but also help them with various related problems.

Evaluation – Social influence can be used to show others who have purchased from you. Another example of reciprocity here would be to offer an impartial side-by-side comparison of your offerings and your competitors’ offerings.

Purchase – We discussed how the decoy effect could be used here. Ensuring that your customer service is excellent and the buying process is smooth and simple helps at this stage.

Post Purchase – Consistency can be used to show that you can continue meeting customers’ needs, as well as reminding them that they are your loyal fans.

Learning Activity:

1. Create a profile of your target customer based on their demographics and psycho graphics.

2. Review your work from Module 3 and edit if necessary (how your products and services fit in the hierarchy of needs).

3. Review your work from Module 4 and edit if necessary (where you identified what information your customers need at each stage of their decision-making process).

4. Now, from the list of tactics you brainstormed in Module 5, select 1 to 3 tactics that would be relevant at each step of your customers’ decision-making process.

To Your Success




There are many psychological principles that marketers and advertisers routinely use in order to choose the most effective marketing tactics to reach their customers. In this module, we’re going to explore the most common of these, along with a few examples of how they’re used.

These are powerful techniques and like anything powerful, they can be used beneficially or maliciously. Reading the principles and examples below, it’s easy to understand how marketers use them unscrupulously in order to manipulate people into buying things they don’t need.

However, as ethical marketers, we’re focusing on matching customers to valuable products that actually meet their needs. That’s the ultimate goal of any marketing.

The Endowment Effect

The endowment effect states that we tend to value more what we already own than what we don’t, even if we want it badly. In other words, when you’re selling or trading an item you already have, you’re likely to place a higher value on it than if you’re considering buying it.

In a study by Kahneman, Knetsch, and Thaler in 1990, participants were given a mug and then allowed to trade it for another product of equal price. The study found that once the participants owned the mug, they charged much higher prices for the barter goods. What they were willing to accept was about twice what they were willing to pay.

You can see examples of this anywhere someone trades or sells goods. For example, if you bought a bottle of wine years ago for $10, you’re likely to consider it very valuable now, even if the price has not grown significantly (this is especially so in the case of wine, which is perceived as gaining in value over time).

Marketers take advantage of the endowment effect when they offer test drives or free trials. When you’re driving the car, the salesperson will do everything in their power to make you feel like it’s yours already.

The basis of the endowment effect isn’t anything selfish at all. It’s simply the natural desire to maintain the status quo. You see change, or in this case the giving up of something you already own, as a risk or negative.


Reciprocity is one of the most well-known and widely understood psychological principles in marketing. It states that we feel obligated to give back to people who have given to us.

In a famous study from 1971, Dennis Regan set up a fake art appreciation experiment where the participants’ “partner” (actually Regan’s assistant) bought one group of participants a soft drink; for the other group, the assistant did not buy the soft drink. At the end of the experiment, Regan’s assistant asked all the participants if they would buy raffle tickets. The subjects who had received the soft drink bought more raffle tickets, even though they hadn’t asked for the drink in the first place.

Reciprocity is a key feature of content marketing. In content marketing, you give away free content, either in the form of web content or a downloaded product. This boosts sales because customers who received free content from you are more likely to feel indebted to you and buy from you. Free gifts, freebies, deep discounts, and other “gifts” work because of reciprocity.


We like to keep our actions and thoughts consistent. When we act inconsistently, this causes cognitive dissonance, or great psychological discomfort, so we always try to act the way that we think we always act.

Consistency is the psychological principle at work when you’re leaving a website and a pop-up appears, saying something such as, “Do you want to take charge of your finances and get on the right course for the future right now?” The options are, “Yes, I’m ready to take control of my life”, or “No, thanks. I’m happy staying in debt.”

Any reasonable person who sees this message will instantly think, “Yes, I’m ready.” This is because in your thoughts and actions, you want to get rid of debt and take control of your life. The pop-up encourages you to stay consistent.

The Foot-in-the-Door

Just like a salesperson sticking their foot in your door and physically holding it open so that they can deliver their pitch, the foot-in-the-door technique is where a salesperson asks the customer to make small decisions and then progressively bigger decisions.

Jonathan Freedman and Scott Fraser conducted the first foot-in-the-door studies in the 1960. Their researchers called households to ask about the products they used. A few days later, they called again asking if they could send workers to the house to actually check to see which products the subjects used. The study found that those who received the initial phone call were twice as likely to let the workers into their house.

Charitable organizations often use the foot-in-the-door method by asking you first to sign a simple petition and then moving on to bigger requests, such as asking for money. Another example is a company holding a survey that asks the participants to identify as a fan of their brand. The survey is then followed up with a sales pitch, since the participants have already self-identified as fans.

Freedman and Fraser found that the reason this method works is through the small initial decision, where there is a bond created between the asker and the person being asked. This makes it harder for the person being asked to say no.

The Door in the Face

Foot-in-the-door relies on gaining consent but the door-in-the-face relies on rejection. This is where a person makes a large request first. Once rejected, they offer a smaller request. The person being asked will feel somewhat bad about saying no the first time and be more likely to say yes to the comparatively reasonable, smaller request. In addition, the bigger request makes the smaller request look even smaller than it would otherwise.

This is the technique used when a salesperson starts out offering to sell something to the buyer. The price is too high or the sale to sudden, and after the customer says no, they agree to sign up for the email newsletter instead. If the salesperson had started with the newsletter, the customer might have seen it as a large request.

The Ben Franklin Effect

Supposedly, Ben Franklin was once facing a fierce political opponent who favored the other candidate. Ben Franklin managed to win this opponent over in a very peculiar way. He told his opponent that he’d heard he had a very rare book and being a well-known bibliophile, Franklin asked to borrow it. The opponent obliged and Franklin returned the book two weeks later with a small note of thanks.

The next time the two men met each other, Franklin’s opponent started a conversation with him and offered to help him with anything he needed in the future due to his great fondness for him.

In other words, Ben Franklin won over his opponent by asking for a favor and not returning it. This is an illustration of what has since come to be called the Ben Franklin effect.

It also works in a very similar way to the foot-in-the-door method. When you do a favor for someone, you’re more likely to keep doing favors for him or her. Like the foot-in-the-door, there is also the creation of a bond.

The Ben Franklin effect is being used when a company asks a customer for feedback without offering any compensation or deal in return. The next time the customer has contact with that company, they feel positive sentiment toward it, even though they were the one that helped out the company initially.

Loss Aversion

Loss aversion is similar to the endowment effect. It’s based on the same psychological principle that we value what we have more than what we want. Loss aversion is the endowment effect’s negative; we feel the negative effect of loss much more strongly than the positive effect of gain, so we try to avoid loss.

Consider getting a $10 a month raise or losing $10 a month from your paycheck. It’s likely that you’d see the $10 raise as a small but slightly helpful bump in your pay that you can use somewhere. On the other hand, if your company cuts your pay even a paltry $10 a month, it feels like an outrage.

Loss aversion is used in a variety of ways to sell products by emphasizing what you save rather than what you gain. For example, a cloud storage service might sell itself as a way to prevent losing your data rather than a way to gain more storage.


Scarcity is similar to loss aversion. When the supply of something is limited in quantity or time, we feel a more urgent need to buy. This is why companies advertise that if you don’t act now, you’ll miss this opportunity. In addition to increasing urgency, scarcity also boosts the value of a product because there’s only a limited number.

Scarcity is used often but not always ethically. It tends to play on fear more than the other psychological principles mentioned here, and for that reason it can be easily abused. If misused, scarcity can backfire, so it should be used sparingly.

Social Influence and Conformity

People are more likely to make a certain decision if others have done so. Even if the person believes in this decision, they may feel hesitant unless they see that others have done so before them.

The word “conformity” is often used in a very negative way. People who conform are spoken of as “sheep” and it lends itself to a dark view of humanity. However, this isn’t the case at all. Even the most socially independent of us has a social consciousness. We all have a need for conformity, even if to a very limited degree.

There are endless studies that show how important conformity is to us. Solomon Asch’s study in the 1950s showed that people were willing to give obviously wrong quiz answers just because others had done so. Other studies have shown that people could be influenced to incorrectly identify suspects in a police line-up.

Social influence and conformity can be seen with online reviews. We trust our friends and even complete strangers more then we trust companies. This is why testimonials are powerful, as well as reviews on sites like Yelp!

Mere Exposure

Mere exposure means that the more we’re exposed to something, the more we tend to like it. Perhaps there is a popular song that is played everywhere all the time. At first you hated it and then you started to not mind it so much, and eventually you bought the album. This is mere exposure at work.

Studies have shown that the more frequently banner ads are shown on websites, the more favorably participants think about those ads.

The biggest use of mere exposure is in product placement. It seems strange that simply showing a bottle of Coca-Cola in a scene in a movie could have such a powerful effect on sales, but companies pay a great deal of money for product placement and they don’t waste their advertising dollars.

The Decoy Effect

The Decoy Effect leads customers to change their preference between two options when a third, less appealing option is added. This third option is the “decoy”.

In 2007, Joel Huber, a professor at Duke University, set up an experiment where subjects were given two choices: a nearby 3-star restaurant and a 5-star restaurant that was much further away. Subjects were split fairly evenly between the two options. When he added a third option, a 4-star restaurant that was even further away, many more subjects chose the 5-star restaurant. This third illogical option made the 5-star restaurant seem more reasonable in comparison.

The decoy effect is most commonly seen with price points. For example, a software package may offer two pricing options; one is lower but has fewer features and the other is higher with more amenities. If only the two are offered, the higher priced item looks expensive. But if the company ads a third, higher-priced option and calls it the “Executive Suite,” this will drive sales of the (now) middle-priced model, especially among regular consumers who think, “I don’t need an ‘executive’ package.”

Framing Effect

How a problem is framed can influence perception, especially whether something is framed as a loss or a gain. We covered some of this with the endowment effect and loss aversion, which are both types of framing.

A study by Tversky and Kahneman in 1981 showed that the way a treatment for a deadly disease is framed significantly affects the option that people choose. They were more likely to choose the option that stated X lives would be saved versus the one saying that X people would die, even when the actual numbers were the same.

Research at the Harvard Business School found that people are more likely to buy a TV with all-inclusive pricing ($500 including shipping) versus partitioned pricing ($490 for the TV and $10 for shipping).

In general, products that are positively framed will sell better regardless of the actual numbers. If you have a product that’s 97% fat-free, it is better to say this than that it contains only 3% fat.

Fewer Options

We often take it for granted that more options are naturally better for customers, but this isn’t always the case. With too many options, customers can feel overwhelmed. This can lead them to choose to buy nothing. It’s better to present fewer options.

What if you have a variety of options you want to present, such as a large product line? You could cut out products that aren’t selling, but an even better way to simplify and offer fewer options is to put all of the options together into categories.

This is how a supermarket works. A supermarket has nearly any food item you can imagine, but everything is broken up into clear categories so that you know where to go in order to find what you need. This is why the supermarket has a deli, a produce section, a meat section, bread, and so on. You see this in bookstores and any other retailer that sells a great deal of products.

Cognitive Dissonance

Cognitive dissonance occurs when things somehow didn’t seem to turn out how you thought they would. There is some kind of disconnect between what’s in your mind and what’s actually going on in the world.

Cognitive dissonance can occur after a purchase if a customer feels the product doesn’t deliver on its desired outcome. If you remember the ideal versus real situation, cognitive dissonance occurs when the outcome of the purchase isn’t the ideal situation the customer envisioned (or you told them would occur).

You can prevent cognitive dissonance by offering the same post-purchase care for your customers that you offered before their purchase. Make sure you have customer service that actually helps when your customers need it. Through your interactions with them, try to demonstrate to them how the purchase has met their needs.

You have to avoid cognitive dissonance at all costs because it will prevent customers from buying from you again.

Customer Focus

One final psychological point to keep in mind is that the buyers are thinking of themselves. No matter what products or services they’re considering, they’re always thinking about what it will do for them. Your marketing needs to be in line with this principle or your message will be lost.

Keep everything focused on the buyer and their needs, not your amazing products or your unique brand. Even when talking about your product or brand, always bring it back around to how it helps them with their needs.

Learning Activity:

Pick at least 3 of the principles listed in this module and brainstorm other tactics that you could use.

Keep a running list of tactics in a notebook and add to it as you think of more ideas or see the psychological tactics being used in practice.

To Your Success




Before you can select from all the marketing tactics available to you, you need to understand the process your customers go through in making a buying decision. What they’re thinking and feeling at each stage is what will help you determine the best way to reach your potential customers.

There are five steps to the decision-making process that customers go through when they make a purchase:

1. Need Recognition and Problem Awareness

2. Information Search

3. Evaluation of Alternatives

4. Purchase

5. Post-Purchase Evaluation

Step 1: Need Recognition and Problem Awareness

The buying process starts with a customer identifying a problem or need. It could be something like, “I’m hungry,” “I need a new lawnmower,” or “I don’t feel safe.” The customers may not identify this problem themself, but may be responding to an advertisement or stimulus. For example, you might walk by a chocolate shop and suddenly feel an intense “need” for truffles.

The distance between the current situation of need and the ideal future that fulfilling the need will create determines the strength of the customer’s motivation to meet that need.

Let’s consider an entrepreneur who realizes they need to automate some aspect of their business. If this automation will save her ten minutes a day, she will feel differently about it than if it would save her one day each week. The one day per week option will elicit a much more emotional response from her.

It’s good to understand just how much meeting this particular need will help your customer. A customer whose ideal situation is vastly better than their real, current situation will be much more emotionally motivated. For a customer whose ideal situation wouldn’t be much different than their current one, you would rely less on emotional marketing and more on presenting objective facts and data.

Step 2: Information Search

At this stage, the customer has realized their need and they’re gathering information on how to best meet this need. During this phase, customers pay more attention to information that comes from friends, family, or other consumers than the official advertising message of the company. They’ll also rely on their own feelings about the brand (for example, this security company is known for the strength of its products). In other words, people tend to rely on social information more than information from the marketers themselves.

It’s good to understand the sources that your customers use for their information. These could be:

 Personal sources: Friends, family members, neighbors, co-workers, and other acquaintances they trust.

 Commercial sources: Branding, advertising, salespeople, retailers, and point-of-sale displays.

 Media sources: Any kind of media including the Internet, TV, magazines, newspapers, etc.

 Experiential sources: A customer’s firsthand contact with the product (for example, taking a free trial or handling an item in a store).

As we said before, people tend to rely on personal, public and experiential sources of information at this stage more than commercial sources. People judge information from these sources as being more objective, as they have no vested interest in whether you buy the product or not.

Step 3: Evaluation of Alternatives

At this stage, the customer is checking out alternative brands, products, and services in order to choose what they perceive as the best choice.

Purchases can be divided into two types: High-involvement and low-involvement. High-involvement purchases usually involve those that are high-priced or that involve a great deal of personal risk, such as a house, a car, an investment, or any other major purchase. They can also include items that the customer has a great deal invested in, even if the monetary price is not high.

On the contrary, low-involvement purchases are those that are low-priced or involve little risk. These include choosing basic food products, entertainment products, soft drinks, and so on.

The evaluation stage is much more drawn-out and complex for high-involvement purchases. For example, people spend a great deal of time checking out different models for their next major car purchase. On the other hand, low-involvement purchases are made with little evaluation of alternatives because there is little risk involved.

Step 4: Purchase

At this point, the customer takes the information they’ve gathered and the evaluation they’ve made, and uses this information to make the purchase that will help them meet their initial need.

This is a very simple step, but it’s still important to consider because it can be affected by a number of factors at the point of sale. These factors include customer service, ease of the shopping experience, shipping and return policies, promotions, and so on.

A customer who has chosen a brand for purchase may change her mind at the last minute due to difficulties during the actual buying process. An in-store promotion may sway a customer to change their purchase choice from the one they made at the information and evaluation stage, especially for a low-involvement product.

Step 5: Post-Purchase Evaluation

Once the purchase is made, we’re not quite finished yet. The product needs to deliver on the promises it made. It needs to be in sync with the evaluation the customer made. Other factors like customer support may also play a significant role here.

There are a few things you can do in order to ease the entire process and cut down on buyer’s remorse after the purchase is made:

 Show that you understand the customer’s situation and focus on solutions to their problems.

 Provide clear and easy-to-understand information about your product or service.

 Encourage comparisons with similar products offered by competitors.

 Make the purchasing process as easy as possible.

 Provide an outlet for the customer to leave their feedback, such as through reviews.

Learning Activity:

1. Think about your own decision making process for finding a new dentist for yourself or your family.

What are you thinking, feeling, and asking yourself at each step of the process?

What information do you need at each step?

2. Now think about the decision making process your customers go through when deciding whether to buy your own products or services. See if you can answer the same questions.

If you have access to a few of your customers with whom you have a good relationship, ask them directly.

To Your Success


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