A Cheat Sheet to Use Psychology in Business Effectively

Psychology plays an important role in the development of many roles and aspects of our life. The aspect and understanding of psychology in business are similarly useful in the journey of entrepreneurship too. In this article know all about psychology in Business.

What is Psychology?

According to Wikipedia, Psychology is the scientific study of mind and behavior that is how people behave. Psychology includes the study of conscious and unconscious phenomena, including feelings and thoughts.

Benefit of Psychology

The benefit of psychology is very vast but not limited to reducing stress, relaxing you, helping to understand the world well, etc. An understanding of psychology not only helps you to live happily but also helps others to be helped by you because you are now knowing them in a better way.

People Skill:

The whole business world is a manifestation of the people skill that the owner or the founder has. This becomes an integral and inevitable part that needs to be understood. It makes it easy to understand human behavior, interpersonal skill, and so on.

Personal Cure:

When you are able to understand the exact reason for a particular behavior by someone, this gives you an edge over another person who doesn’t know the psychological reasons for a particular behavior. Understanding the same can really help a lot in curing yourself on your own in cases of being hit psychologically.

Communication Skill

For anything to initiate from marketing to deals to sales to everything, there is an important role of communication. Having an understanding of psychology can really help in doing the communicating about things effectively which in return is going to impact the overall performance of the business effectively.

Use of Psychology in Business :

Designing Story and Culture of your organization:

The role of psychology in the designing of the overall story, culture, etc of an organization is seriously important. How the future of the company would be looking alike and how this thing is perceived by the employees is greatly influenced by the use of psychological aspects in designing it.

In marketing:

Marketing is the technique to impart the message that the brand or the organization is trying to illustrate. Again the role of psychology in this message transfer is very essential and pivotal. 

In sales

The representative of the sales department would find it easy to communicate the product idea to the prospect at the right timing with the right tone if they understand the very basic psychological aspects and they would be thus ready for the upcoming action from the other side.

In HR

The understanding of psychology helps a lot in understanding the personality of the candidate while recruiting new ones and it also helps in increasing the engagement rate of the existing employees. It is also helpful in a performance evaluation or reviews of the employees and their talent development.

All this above- mentioned things combined make a long-lasting impact on the whole future of the organization and its success in the long term.

Ways to use Psychology in Business

Social Proof:

You can use social proof to impact the psychology of your viewer to have a high level of trust in the brand. People are assured about the thing being said quite easily when this method of social proof is targeted.

Consistency:

People love it if we put in our regular effort. Commitment and dedication are always liked. Using this psychology and applying the concept of being consistent, a lot can be done to leverage this technique to influence psychology.

Kindness always pays off:

Even a small act of kindness pays a lot in the long term. For example, a small act of kindness to give something extra at the tie of giving the bill increases the amount of chance and magnitude of the tip paid to the same waiter. This is a utilization of the power to impact psychology.

Apart from this, there are aspects of psychology that can be touched to lift the organization and individual to a higher level. For example the use of a smile to lift the positivity level, Making friends using the benjamin franklin method, giving choice to give the illusion of control, etc. Overall, these techniques need to be understood deeply and are very much capable of making a significant impact on the functioning of the organization.

The true Range of Psychology in Business 

1. Six human needs:

Sometimes, it is said that these following six points are the sole reason for the change in the behavior and psychology of the person with the change of time. 

Certainty and comfort: People love getting a standard set of behavior at your different outlets and this creates a sense of surety and trust.

Uncertainty and variety: At the same time of being standard, providing a range of products to choose from to your visitors illusion them of being in control of choice. This helps you to make them feel superior.

Significance: Make the person coming to your organization feel superior. In this, feeling and presenting yourself, your organization superior to other organizations helps and impacts a lot.

Love and connection: Creating a sense and feeling of being loved creates a deep level of trust and love that can lead to a deep and valued deal in the future.

Growth: The ability to expand capacity, capability, and understanding

[Related: Read Marketing articles by Biz Glows that can help in your growth.]

Contribution: A small act of kindness, from the company that shows that the brand loves the people it serves in reality too, develops a deep level of attachment and trust towards the brand.

2. Personalization 

A small mom-and-pop shop or a small hotel or a paanwala, did you notice anything common in all of them? The common thread binding all of them is the personalization that they have with their customer. They have quite a detailed understanding about them and this is one of the things which keeps a small group of people their loyal, consistent customer. The same methodology can be used by the big brands too.

But big brands have got the problem of scale! They can not know the detailed background of their customer. But what they can at least try is to remember the name of their regular customers, to begin with. This is going to create a sense of personalization to the people visiting you and make them happier with the visit. For example, Starbucks, a famous coffee chain, uses this psychology a lot by writing the name of their visitor on the served coffee can. 

3. Mirroring

It can easily be understood by the word that it is an association with the reflection of something. Mirroring is an implication of the understanding of psychology that says you are treated the same way you treat others. If you treat someone with love there is a high chance that you get the same thing back and vice versa.

If the employees and your staff treat the customer with a smile, to spread the vibe of love and happiness, there is a high chance that they will treat your staff and your brand the same way!

4. A fresh experience 

People always look for new experiences, love to visit and explore new places and things. If your brand is serving the same product but there is no excitement left, this can hit your brand adversely. So, do take care of creating a fresh experience or even try to offer the product in a different way like a shuffled menu, new releases, and so on if offering a totally new experience is not possible in your case.

Now you know why the brands like Apple, Samsung, etc always have new releases! You know too why the menu of some restaurants is offered regularly with slight changes! You know it, isn’t it? 

5. Scarcity

The whole game of supply and demand can be played well if this psychology of scarcity can be utilized in favor. If people around us are doing the same thing and if we are not, this gives a sense of scarcity. The sam psychology comes into use when the so-called “Limited Time Offer” or “Limited number Products” Type of deals are introduced in the market to make use of this psychology.

6. Story Telling

Stories are connected to us and we are connected to them because they help us to light up our imagination and think in a way that is more emotional and connecting. Many psychologists believe stories as one of the most powerful mediums of communication just because of this reason.

The history of stories begins with the very first use of language even. These all combined make the story a powerful medium of communication for the purpose of marketing and branding too.

Summary

Psychology is very essential and critical to the workplace and for the whole organization. It is the base upon which there are many departments within the organization are working. In a nutshell, if it needs to be told, it can be said the understanding of psychology helps in the excelling of the organization from the very basic level to the most sophisticated level. So an understanding of it is a necessary element for the success of any venture.