From the Flywheel Effect to the Herd Mentality, from the Principle of Burden to the Veblen Effect, from the Birdcage Effect to the Psychology of Free, these psychological effects are constantly influencing our consumer behavior. Understanding these psychological effects can not only help us better understand our own consumption behaviors, but also enable us to more accurately grasp consumer psychology in marketing planning, thereby formulating more effective marketing strategies.

Psychological Effects Commonly Involved in Marketing Planning (Part 2)

In this era full of temptations, our consumption decisions often seem both rational and absurd.

We are willing to spend over 100 yuan to watch a movie with friends, yet hesitate over a 15 yuan video membership service. In the mall, a 700-800 yuan piece of clothing seems easy to purchase, but at the market, we can haggle with the vendor for hours over a few yuan's difference.

Behind these seemingly contradictory behaviors lies deep psychological principles.

Let’s explore some common psychological effects in marketing planning and see how they influence the public's consumer decisions. Today, we’ll discuss six related psychological effects: the Flywheel Effect, Herd Mentality, the Principle of Burden, the Veblen Effect, the Birdcage Effect, and the Psychology of Free.

01 Flywheel Effect – Cultivating Consumption Habits

The Flywheel Effect refers to the need for significant effort in the initial stages to kick-start a process. Once the process begins and reaches a certain speed, it becomes relatively easier to maintain.

For a brand, cultivating consumer habits is crucial. Through continuous marketing activities and discount policies, a brand can help consumers form fixed consumption patterns, thus reducing later marketing costs.

For example, Luckin Coffee attracted users in its early days through heavy subsidies and discount coupons, gradually getting users accustomed to buying coffee through its app, thus accumulating a large base of loyal users in a short time.

Meituan Delivery attracted many users with coupons, new user red envelopes, and reward systems. As the number of users grew, more restaurants were willing to join Meituan Delivery, enriching the platform’s options and improving the user experience, forming a positive feedback loop.

02 Herd Mentality – Queuing, Following Trends

Herds have three characteristics: low intelligence, susceptibility to suggestion, and emotional contagion. For example, if a leading sheep jumps off a cliff in panic, the others may blindly follow. Similarly, humans often exhibit this behavior, tending to imitate those around them, especially when they lack firm ideas of their own. This utilizes people's conformist tendencies, where we instinctively follow the group’s will, often losing the ability for independent thought.

This effect is widely used in marketing. By creating the illusion of a popular product or service, brands can attract more potential customers. For instance, some popular milk tea shops hire people to queue, creating the illusion that the product is very popular, thus attracting real customers to join the line.

The booming live-streaming e-commerce is another example of the Herd Mentality. Hosts display products, share trial experiences, and interact with viewers, attracting a large audience. These hosts leverage their personal charisma and brand, combined with time-limited offers, flash sales, and other tactics, to achieve high sales volumes. When viewers see others buying in the live stream, they are influenced and may also make a purchase.

03 Principle of Burden – The Illusion of Necessary Needs

In nature, some creatures develop “burdensome” features that, though not conducive to survival, help with reproduction. For example, the peacock’s extravagant tail is cumbersome but attracts mates. Similarly, in human society, there are “burdensome” needs—people tend to showcase their advantages through appearances to gain attention or satisfy psychological needs.

Using the Principle of Burden, brands can market certain products as necessities (even if they aren't truly indispensable), triggering consumer desire to purchase them.

Lipstick marketing is a typical example. Brands introduce various colors and styles, align them with specific fashion trends, and give them unique names and meanings, thereby stimulating consumers’ desire to buy—even to the point of collecting them. Consumers may perceive owning different lipsticks as essential for expressing their personality and charm.

04 Veblen Effect – Conspicuous Consumption

The Veblen Effect reveals an interesting phenomenon: the higher the price of a product, the more it attracts consumer interest. Consumers often buy high-priced items not for their practical use, but to fulfill psychological needs, particularly to demonstrate their economic strength to others. This type of consumption is called “conspicuous consumption.”

You may have heard a story where a store, due to poor sales, decided to offer discounts. However, due to a misunderstanding by the staff, the prices were doubled, which paradoxically led to the items selling out. The reason behind this is that for certain goods, especially luxury items, a high price does not deter consumers—it actually increases the product’s appeal.

Therefore, if a brand aims to position itself in the high-end market, it should adopt higher pricing strategies to reinforce its brand image, just as luxury brands like LV and Gucci price their products well above their actual cost yet remain highly sought after, as they symbolize status and identity.

05 Birdcage Effect – Spending More to Avoid Waste

This psychological effect stems from an interesting story: Psychologist James bet his friend Carlson that he would soon keep birds. Skeptical of the bet, Carlson accepted a beautiful birdcage James gave him. Before long, Carlson began keeping birds. This was because he had placed the birdcage in his living room, and whenever visitors asked why there was a birdcage without a bird, Carlson had to explain repeatedly. To avoid this awkwardness, he ultimately bought a bird.

Brands can use this effect by offering or selling certain items to encourage consumers to purchase matching products. This effect plays on people's reluctance to waste, leading them to buy things they don't actually need. Supermarkets often use buy-one-get-one-free promotions, or offer limited-time products that are free with a certain spending threshold, encouraging consumers to buy items they may not need just to "get a deal" or receive a desired product.

06 Psychology of Free – Attracting Users with Free Services, Charging Later or Offering Partial Free Upgrades

The word "free" holds immense appeal for most people, often leading them to spend more for something free. Brands can attract users by offering free services or products, and then generate revenue through value-added services or follow-up products.

The “free” strategy is often used by emerging companies to quickly enter the market and grab attention. By offering free products and services, these brands can rapidly accumulate a large user base. As long as the user base is large enough and the product quality is solid, companies can guide users to make purchases through differentiated, innovative products or premium services.

For example, 360 Antivirus Software used the “free” strategy to defeat competitors like “Rising” and “Kaspersky” in just one year, becoming an industry leader. Today, many online education platforms offer free trial courses or basic courses to attract students to register and experience. Once students find the courses valuable and helpful for their learning, they are likely to purchase advanced or complete course packages.

Conclusion

In marketing planning, understanding and utilizing these psychological effects can help brands better attract and retain customers. However, it is important to note that the successful implementation of these strategies must be based on understanding and respecting consumers' true needs. Marketing is not just about applying techniques; it is an art that requires balancing creativity with ethics, ensuring consumers' interests are protected. On the road ahead, we should focus more on integrity and sustainability, providing consumers with truly valuable products and services.