Psychology of Marketing
How customer-facing strategy leads to customer-informed marketing.
Marketing can use behavioral psychology to interpret and predict human behavior by focusing on observable actions and the conditions that produce them. The most effective campaigns don't simply persuade, they shape environments that make desired behaviors more likely.
Behavior becomes useful to Marketers when it is translated into something observable and measurable. Instead of only asking, “what is this person feeling?” , we examine the conditions that precede the action, the behavior itself, and what follows after - the antecedent, behavior, and consequence - scientifically known as the A-B-C equation.
Think of the A-B-C equation as such, the antecedent is the precursor that influences the behavior to happen, for example, an easel on a canvas. The antecedent becomes the set-up that influences the behavior, to paint, to occur. Without the antecedent the behavior to paint becomes less likely occur. The antecedent, an easel on a canvas, influences said behavior, painting, which leads to consequence, the result, what happens after you painted, which influences whether you will repeat it.
In marketing, the antecedent could be an ad, notification, price change, social proof, or product recommendation. The behavior could be clicking, purchasing, abandoning a cart, or subscribing. The consequence could be a discount, confirmation, reward, or satisfying product experience.
This becomes useful because consumer behavior can be tracked through signals such as clicks, engagements, searches, etc. Online advertising can incorporate these behavioral signals to tailor advertisement’s to a user’s demonstrated preferences and interests, making the ad more impactful. Rather than simply observing these behavior signals in a silo, the real impact derives from designing antecedents and consequences that make a behavior more likely. In this sense, Marketing becomes not only a way to interpret behavior, but a system for constructing it.
Behavior Modification & Reinforcement
Behavior modification can be found not only in psychology, but in marketing tactics. Behavior modification involves changing the most important antecedents and consequences that control said behavior. As well as, systematically applying behavior principles to the task of changing someone’s target behavior, by setting up valued reinforcers to be contingent upon.
For example, a marketing campaign within my current role for our IT / Spend products are incentivized through gifts for high meeting conversion; the attendee receives airpods after joining the meeting. The gift is a value reinforcer and receiving it is contingent upon the client attending the call. This can be found by increasing the desired behavior in small increments. The desire is for the client to purchase the Rippling product stemming from the marketing campaign, and by increasing the likelihood of accepting the meeting in the first place through a value reinforcer, like a gift, increases the overall likelihood of the client taking the call, learning about the product, and recognizing the value enough to convert.
How does one identify target behaviors and create behavioral definitions of them?
The behavior we wish to change is a target behavior. Target behaviors are designed to make it easy to measure behaviors in numerical units. We begin with a baseline measurement of the target behavior before initiating behavior modification. Once identified it needs to be defined as accurately as possible with a concise behavior definition. It is important to focus on objective goals, the more specific the better because it will benefit from the scientific use of behavior principles.
There are 3 benefits for using objective behavior definitions:
First, objective data gives us the basis for rewarding a job well done and not rewarding suboptimal behavior. For example, setting a goal for 100 different clients to attend the IT or Spend meeting from the incentivized campaign. If only 30 clients join the meeting, it is objectively clear, you still need 70 others to complete the meeting in order to receive the reward, Airpods.
Secondly, objective records help us ask questions and create rules for correcting problems we may encounter during behavior modification. For example, tracking campaign data within its duration to help refine strategy. Asking, what did these 30 clients have in common to convert to meeting joined? Are IT buying trends impacted by seasonality? Are there certain industries more interested than others? By triggering questions when a behavior was not completed, helps you realize other behaviors that are preventing you to reach the conversion goal of 100.
Thirdly, objective data helps people evaluate their relative merits of different behavior modification programs. For example, increasing the target pool by adding additional clients into the campaign. Keeping data objective enables clear results to help refine strategy. If targeting an additional 600 clients does not improve conversion rate this objective data reveals targeting additional clients does directly lead to a higher meeting conversion rate, and encourages strategy to be refined in other areas.
Identifying the Weakest Link
Complex target behaviors can also be broken into smaller operant behaviors that form a behavioral chain. Rather than attempting to modify the entire behavior at once, each link can be evaluated individually to identify where the chain is breaking down. The weakest or neglected behavior then becomes the new target behavior. Careful evaluation can help us identify neglected behavior that becomes the new target behavior in the chain, polishing all the links in the chain. By strengthening individual links, the entire behavioral chain becomes more effective.
For example, a campaign where the target behavior is attending a product meeting. The behavioral chain might be: see campaign → open message → click CTA → schedule meeting → attend meeting. If 300 people click the CTA but only 30 schedule, increasing campaign reach may do little to improve the final target behavior. The weakest link is no longer awareness; it is the transition from interest to scheduling. That intermediate behavior can then become the new target for modification.
The weakest link is the transition from interest to scheduling. The focus is to now modify that step in hopes of reducing friction like, shortening the booking form, embedding available meeting times directly into the CTA, triggering an MQL notification to sales to contact directly, changing the next campaign step in relation to the action of scheduling drop-off with a follow-up explaining the meeting agenda, and more.
Therefore, behavior modification, in conjunction with objective data, enables marketers not only to track measurable outcomes, such as the number of emails converted to meetings schedule and attended within a given week, but also to create systems and rules based on behaviors that have previously produced successful results. Marketers can then build on that baseline by experimenting with variables like booking forms, email formats, language around CTAs etc. By comparing scheduling rates before and after these changes, one can determine which intervention improves conversion.
Buyer Personas & Targeting
Specific buyer personas will resonate with certain product value props within a campaign that are unique to them. It is critical to narrow down your audience to a specific target in order to “control” the likelihood of a certain consequence to occur from a specific behavior, and in this instance not waste precious ad spend /budget on the wrong decision maker.
For example, targeting only active admins within the Rippling platform, with IT titles director and above. For further tailoring, targeting IT admins on accounts with previous IT engagements, as well as targeting clients in high yield industries like growing SAAS / AI companies.
Expanding the Behavioral Chain Through Channel
In my role within channel partnerships, the end client also works with a referring partner, and in some cases the Partner’s team includes a fractional IT leader, who supports various clients only for IT purposes. Targeting the Partner in addition to the end client opens up more whitespace. This campaign could be strengthened through the ripple effect of the channel. With partners it’s more intentional targeting as they receive additional incentive of co-selling Rippling through our rev-share agreements. The partners can range from Supporting 5-100+ Rippling customers, and also, they have direct insight into the end customer’s sentiment / growth phase / strategic needs and beyond. If the partner recognizes the product value, they become an additional vessel for revenue generation across their supporting accounts, as this becomes mutually beneficial for the operations with their Partnership with the client, and partnership with Rippling, which fuels their partnership business in return.
As the second founding member of the Accountant Channel team, I helped define our partner tiers and its correlation to our rev--share policies. Our partner tiers were constructed through data insights of total accounts referred, cumulative CX entitlement of their referred accounts, as well as current percentage of paid invoices on Rippling services. With a minimum requirement of Annual Recurring Revenue (ARR) to ensure consistent growth. Including per customer payout breakdowns, on specific product services. Specifically highlighting high-return product add-ons, such as, IT & Spend products. An important data insight to help inform marketing strategy.
The roadmap follows, define the pillar & tier the partner situates themselves in, understand the maturity model for partner expansion from standard to platinum status, conduct product activation and growth through launching their partnership and exploring the proven path our 1,500+ partners using to scale their firms. The foundation is built on mutual success.
Using co-selling as a method to market Rippling to key stakeholders can accumulate compounded growth because the conversion of a partner recognize product value will influence, recommending Rippling as a key provider beyond HRIS tech, influencing multi-threading within the platform itself, and within it’s supporting accounts, deepening customer loyalty and trust through higher overall adoption rate, while also becoming a super user yourself, from the partner business model, further influencing product and customer experience. It’s a domino effect.
This is why partner education (and customer education) is very important deepening trust and loyalty long term. We host Executive business reviews quarterly to walk through new product releases, align on mutual accounts, review commercials & refine collaborations for agreed wins. The conversion for a partner champion is less often, but compounded in effect. The motion is more strategic and timely, but higher reward potential.
From Individual Behavior to Business Value
Zooming out, the strategy behind the incentization campaign is to capture more market value for Rippling as a whole. The IT/Spend products are newer skus at Rippling so they have a lower adoption rate across our customer base. As adoption rises with IT/spend products within Rippling’s new and current customer base, Rippling’s market valuation increases dramatically. The lead conversion for these products results in a higher ROI than the initial investment for Airpods within the campaign. In addition, Rippling partners with Apple within our IT product offering, specifically, Inventory Management which assists with the logistical component of administering and re-administering tech products (laptops, phones) to their workforce. A customer of Rippling Inventory Management has a direct data connection the Apple store, encouraging active customers to purchase Apple products in app. Therefore, the IT product incorporates partnership lead generation and co-selling oppotunities within the app, beyond initial sale of Inventory Management. Therefore, leveraging this partnership agreement within the campaigning of Rippling IT product, and continuously within the product enables further negotiation for utilizing apple specific products to drive conversion rates. Alternatively thinking, you can get people to use more tech, and subconsciously more tech will become required in their life and in their business.
Applying the Framework at a Micro Level
In my current day to day, an email campaign tactic I consistently utilize is centered on contract restructuring. Looking at a consistent pattern in my BoB, some of my clients undergo reductions in their workforce, this can result in a seat delta of active seats in the platform versus the billed seats. For example, a client could have signed for 50 seats, but had to conduct a series of lay-offs within that same year, which results in 30 active seats. This means there is a delta of 20 seats that are being billed and under-utilized. In order to right size the seats and re-allocate spend towards something meaningful, I guide the client towards a specific product investment that aligns with their business needs + strategic priorities. By targeting accounts that have a clear reduction of workforce, this campaign tactic increases the likelihood of product conversion through clear objective goal to reallocate spend in their current seat delta towards a product add on, completed by processing a renewal contract with a product ad-on as holistic contract restructuring. At a micro-level, I view my Bob to produce and refine marketing strategies, enabling success to reach my individual sales objectives.
