The Role of Psychology in Business Growth and Research
The role of psychology in business growth is significant as it provides insight into human behaviour, decision-making processes and motivations. This insight can specifically assist in marketing and advertising, through the understanding of behavioural consumerism and targeting audiences to enhance company awareness and engagement.
However, before incorporating psychological theories and models into business growth, it is important to understand how to apply marketing strategies, plans and business models effectively. Once a business examines its operations and propositions, it can conduct an overall plan to reach prospective customers through emotional appeal and personal relevance.
Small and Medium-Sized Enterprises (SMEs) are businesses whose personnel and revenue lie below a certain threshold. They have distinct characteristics that impact their approach to business growth compared to a large business. With limited financial resources, and strong desire for personal customer relationships in spite of this, SMEs require an innovative, economically stable and tailored approach to fostering business growth.
Understanding behavioural consumerism and how decision-making processes impact whether customers prefer a large corporation or SME, psychology can majorly assist in crafting targeted marketing strategies that resonate with customer motivations and preferences.
Mass Customisation
The process of delivering market goods and services that are customised to meet a specific client’s needs. To achieve a sustainable advantage over SMEs and large business competitors, a business must understand the needs and wants of its customers. Mass customisation allows for the personalisation of product features with effective financing, tailoring to individual members of the audience.
The four primary types of mass customisation are collaborative, adaptive, transparent, and cosmetic.
Collaborative:Companies work in partnership with customers to offer unique, specialised products or services
Adaptive: Companies create standardised products that the customer may customise.
Transparent: Companies provide individualised products to customers without explicitly stating that they are customised.
Cosmetic: Companies create standardised products but market them in various ways to different customers.
Benefits of Mass Customisation
Businesses that offer mass customisation give themselves a competitive advantage over other companies as they can deliver a product that is a personalised upgrade from a generic product. They have an opportunity to increase sales and brand loyalty for their customised products.
Marketing Plan
A marketing plan is a document that details the specific types of marketing activities a company will conduct in a given timeframe. It contains vital information about the current and future marketing initiatives, including how and why they will be implemented. The marketing strategy is identified in the marketing plan, where a company may have different strategies for each product.
How to Create a Marketing Strategy
Identify goals: Increasing sales is the ultimate goal but a marketing strategy also includes goals like increasing customer engagement.
Create a customer profile: A company outlines what they need to know about their ideal customer; Who they are, interests, problems to be solved, solutions offered by rivals, and media outlets ideal for targeting them.
Develop a message: A marketing message must communicate how the company’s products will solve the audience’s problems and provide benefits. The company should distinguish their product from the one created by its competitors, ultimately displaying why theirs is the ideal option
Define your budget: Budget for advertising, media profiles and outlets.
Select your channels: The message must be communicated through appropriate channels, which depends on the type of customer, who they trust and the company’s budget.
Track measurable benchmarks: Tracking customer signups, sales of individual products, customer loyalty, etc.
Using Psychology in Marketing Research and Strategy
Conducting market research is a highly effective way for businesses to understand their target market’s attitudes, emotions and motivations. Surveys and focus groups are ways to gather evidence about customers.
Surveys collect qualitative and quantitative data through structured questionnaires. Use of closed-ended questions that offer predefined responses are great for statistical analysis. They can provide clear percentages or averages which is useful for trend analysis, where businesses can identify changes in customer preferences over time by comparing results from different surveys. This allows for benchmarking, helping to establish baseline data for future campaigns. For example, a survey may include a question like “How likely are you to purchase from us again?” with response options ranging from “Very Unlikely” to “Very Likely.” Analysing these responses can determine the Net Promoter Score (NPS) – a key metric used to gauge customer loyalty, satisfaction and enthusiasm. Open-ended questions help businesses explore their consumer’s mind, revealing underlying motivations and emotions. A question like “What do you think our products could improve on?” can provide in-depth insight into the business’ pain points that reduce consumer satisfaction.
Focus groups collect qualitative data through group discussions, stimulating ideas and revealing consumer opinions. This allows businesses to tailor products and services to meet consumer needs, aligning products with customer expectations to enhance satisfaction and loyalty. Participants can reveal emerging trends to allow for businesses to capitalise on new opportunities before competitors. Businesses can build relationships through one-on-one interactions and receive specific answers to improve on their weaknesses.
Data from surveys and focus groups help improve marketing strategies by effectively developing detailed customer personas to tailor marketing messages to connect with particular groups. The interests, pain points and ideal solutions identified by participants in surveys and focus groups provide a detailed customer persona that helps create advertisements, alter product designs and improve customer engagement. Businesses can adapt their mass customisation approaches to align with changing preferences, regularly analysing consumer feedback to keep-up-to-date with emerging trends. Integrating these insights provides a well-rounded, informed marketing strategy to improve consumerism and customer relations long-term.