Psychology in Product and Sales

I’m experimenting with a new blog post format. Often times I’ll read a multi-paragraph essay and feel frustrated because it could have been condensed into a series of bullet points. So that’s what I’ve made here. Let me know what you think, hopefully the concepts will be intuitive and this bullet-style list will enumerate relevant ideas and examples. This is a list of principles of psychology in product and sales. (I’ve been reading Robert Cialdini and Daniel Kahneman recently!)


  • Signaling
    • Doubling the price on jewelry signals quality, so people will buy more of the same good if it’s priced higher. This is the opposite of what you’d expect.
  • Reciprocation 
    • “Take this thing, no-strings-attached” creates a feeling of debt and favor.
    • Hare Krishnas greatly increased their fundraising efforts by handing out roses for free at airports.
    • Putting a sticky note in a mailed survey request will greatly increase response volume/quality. Response is even better if the note is handwritten.
  • Concession
    • Related to anchoring, people often feel bad or indebted for not being able to fulfill a request.
    • Salespeople start with a big ask for making a purchase but plan on it failing, then say something like okay would you at least be able to give me referrals to three friends who would find this product useful?”
  • Commitment 
    • Having people say they’re in support of something ahead of time (even days or longer) makes a future ask much more successful.
    • Canonical example is political campaigns asking people days before an election will you vote?” and people tend to overcommit and say yes. Then when election times comes, they’ll actually vote to stay true to their word.
    • Once someone goes to the bathroom in a new house or says they’ll buy a car, they’ve already made a decision in their head.
      • Salespeople know this, and will look for signs of mental commitment before jacking up prices.
  • Group initiation 
    • Soldiers go through bootcamp, frat boys haze, and Catholics baptize. Initiation builds critical bonds, and the more intensive/costly the initiation is, the stronger the effect.
    • Products like Stack Exchange make you take steps (earn some amount of reputation, in this case) before becoming a part of the community and having full access to the product.
  • Publicity effect
    • If somebody makes a statement publicly, they’ll think the statement is true even if they’d otherwise rationally find it to be false. Sales tactic would be to get someone to say they have a need for the product out loud.
    • Corollary: be reluctant to publicly share works in progress which would create biases for yourself.
    • If you can get a user to somehow indicate that they use your product (to other people, online, or by having some sort of public profile,) they’re much less likely to churn.
  • Internal vs external beliefs
    • Canonical example: experiment where kids were left in a room with a bunch of lame toys, and one cool robot toy. They are told not to play with the robot, then the experimenter leaves the room.
      • Kids played with the robot if they were told it was wrong and they’d be punished (even though they couldn’t be caught since they were alone in the room)
      • Kids didn’t play with the robot if they were simply told it was wrong
      • People can blame bad external rules for behavior, but it there’s no punishment they would have to do something only a Bad Person™ would do.
    • This backs the socially positive slant that companies like Patagonia or Lyft build their value props on.
  • Inner circles
    • This is related to the group initiation topic. Being in an Inner Circle makes the product much more sticky and drives engagement from users within it.
      • This is particularly important in products where a small group of power users greatly influence the direction and quality of the product.
    • Examples: Reddit’s gilded club, Quora’s Top Writers
    • Inner Circles can come in many layers.
      • Some startups have tried create multi-functional social platforms (meeting new people, messaging friends, etc)
      • But people use these layers to clearly define the relationship: coworkers use LinkedIn, friends/acquaintances use FB Messenger or GroupMe, and close friends use phone numbers/iMessage. This removes ambiguity and says “we’re friends because we use this medium reserved for friends of only this type”
  • Risk aversion
    • People hate losses more than they like gains.
    • “This offer is only open for a limited time!”
    • “The special edition only has 100 copies”
    • “Thanks for joining, here are 50 in-game coins to get started!” (you’d give up this arbitrary freebie if you stopped playing the game)
  • Moral-threat vs consequence-threat
    • People don’t mind taking risks if the expected cost of the consequence is low.
    • But not imposing any punishment shifts the act to a social-signalling/moral burden (rather than a financial one) which has much higher intangible costs and an unlimited downside.
    • Canonical example: a daycare had lots of late child pickups so they started charging $5 each time that happened. Parents were late more often since they had an easy out to their lateness which was simply paying the five bucks.
  • Having an excuse 
    • 6-8% of Gerber baby food is consumed by people who aren’t babies. Gerber actually tried marketing a product specifically for seniors but it failed. People didn’t want to admit they needed that sort of food, so they stuck with the baby product (plausible deniability — lots of seniors have grandkids!)
    • Most hookup apps market themselves as dating apps. While many users are actually focused on dating, nobody wants to tell others they’re only looking for hookups.
  • Anchoring
    • This effect is pretty well known.
    • I was chatting with a guy in SF who was asking for donations for a hip-hop related community org. He challenged me to donate $100 which was crazy, and I ended up donating $10 which in hindsight was twice what I’d otherwise choose to donate.
  • Self consistency
    • People have a need to be self-consistent in their beliefs and actions.
    • The question “why do you want this job?” is also a sales tactic. The candidate will be forced to articulate good reasons out of politeness – and the desire for internal consistency will make them believe these reasons. (source)
    • Unethical example: if you conduct a fake survey about lifestyle, people will hype up and inflate their lifestyle to create a compelling narrative about themself. If you follow that with an expensive ask that would validate that lifestyle, they’ll often go along to not sound self-contradictory.
      • Wouldn’t make sense to say yeah I travel all the time, but this packaged travel money-saving deal isn’t something I want.”
  • Social proof and social pressure
    • Tip jars are seeded” to give the appearance that many other people tip. 
    • Some products with FB login will show you that your friends use it too.
    • Google glass became associated with glasshole” nerds, but Snap Spectacles marketed with attractive and well-rounded models from the start.
    • “Endless chain” where you make a sale, then go to their friend and say your friend John recommended this for you.” This makes it turning down your friend instead of turning down the salesman.
  • Liking
    • Being attractive, personal and cultural similarity, giving compliments, contact & co-operation, conditioning, and association with positive ideas all make people much more open to trying a product or buying something.
    • GitHub’s Octocat is a friendly and fun mascot which users like and build an attachment to
  • Authority
    • This one is obvious. Companies plug high-profile clients whenever possible.
    • Twitter has the blue checkmark to make users feel like they’re getting higher quality information from those people through the platform.
  • Scarcity
    • Robinhood’s famous growth hack where you needed to refer people to move up a spot in the waiting list. Access to the early product was scarce.
    • New coke vs old coke
      • In the 80s, Coca-Cola tried changing the Coke recipe because it had done better in blind taste tests with consumers. But people rejected the New Coke because the Old Coke was then scarce and people wanted to keep what they knew
    • Much stronger to say you’re losing X per month” instead of you can save X per month”
  • FOMO and security
    • Uber guaranteeing people an arrival time increases number of rides since people feel the security associated with having an upper bound.
    • GroupMe SMS’d people who didn’t have the app. This made them feel like their friends were on the app but they weren’t. (Houseparty makes it easy to inspire FOMO with SMS too).

P.S. get new high-quality posts directly to your email