If you want the secret to building a successful business, you must turn to psychology. Psychology is the study of the mind, how it works, and how its ebbs and flows impact our behavior. Without that understanding, you’re more likely to hit walls, struggle with your people, and ultimately risk losses—monetary and otherwise. Likewise, if you understand yourself, you’ll be more likely to be the leader your company needs. It starts with you and expands to everything you “touch”—interactions with your team, audience connections, and your place in your community.
While turning inward can be a sometimes uncomfortable process, it’s rewarding—and it leads to results. Let’s start broad with marketing and then go deeper.
PSYCHOLOGY: THE FOUNDATION OF MARKETING
Marketing is the behind-the-scenes force, the stage manager, bringing your brand to life so it can engage and delight your customers. It facilitates communication connection and fosters relationships. Without psychology, it wouldn’t be possible.
Marketing 2022 harnesses in-depth data analysis, research, and people-centered strategy to develop a brand presence. Effective marketing leverages a deep understanding of target audience emotions, perceptions, behavior, and more. So here’s why that matters.
You need marketing to build your business. And marketing doesn’t exist without psychology. And a basic understanding of psychology can take your marketing to another level.
Avoid guesswork. A psychology-infused audience survey can tell you:
- Why your customers abandon their carts
- What heartstrings, when pulled, make them a customer for life
- What bells and whistles provide a positive brand experience and inspire them to leave a glowing review
- What needs to happen for them to convert
If you’re selling to people, you need to understand people. You can even take it to another level, understanding what biases influence their purchasing behavior and brand perceptions. But don’t stop there; understand your own biases.
IDENTIFY BLIND SPOTS AND SEE CLEARLY
If you’re human, you’re prone to cognitive biases and heuristics. And once you know them, you see them everywhere you look and in everybody you meet, including yourself. When biases go unchecked, they can leave you with blind spots, and those blind spots can make or break your business.
While you can’t avoid cognitive biases entirely, you can increase your awareness and check yourself so you don’t wreck your business. Here are a few examples:
You have a fantastic idea (you usually do). However, when sharing it with two of your collaborators on the leadership team, one champions your idea while the other questions the viability. Because person one agrees with you, it confirms your own belief in your idea (confirmation bias), and you go ahead with implementing it, dismissing person two’s valid and valuable concerns that could help refine the idea.
Let’s do another.
Your analytics person sends you the monthly report, noting that units sold decreased towards the end of the month. You react to that initial information, calling a sales meeting and brainstorming a plan to push hard for sales in quarter two. Subsequently, you learn that the decrease in sales was due to a coding error in your shop software. Because you’ve fallen victim to the anchoring bias, you can’t shake the need to have a come to Jesus conversation with your sales team, though they’re doing better than this time last year.
Essentially, you can familiarize yourself with the cognitive biases and heuristics (there are a lot), or you can ask yourself:
Am I missing something here?
Understanding how your audience may be influenced by cognitive biases can help you identify oppositions and openings to purchasing.
And if you do slip up, being accountable can help you build your business.
KNOW THYSELF: BE ACCOUNTABLE
Being accountable is a challenging but essential skill to develop when you run a business. Proper accountability requires being vulnerable enough to face your shortcomings, own them to the people that matter, and change your behavior. Again, psychology comes into play here as accountability is the act of reflecting on and adjusting your behavior. And the impact of incorporating a culture of accountability in your business is significant:
- If you show accountability, the people at your side will be more likely to. In one study, 84% of those surveyed said that accountability from leadership was the most important influence on overall accountability at their organization.
- When there’s a culture of accountability, collaboration comes more easily.
- When people take ownership over their workplace contributions, it’s a piece of cake to keep everybody aligned on business goals.
- Accountable workplaces have more transparency. When mistakes happen, it’s a conversation that leads to solutions.
- The give and take of feedback help your business (and its people) grow and develop.
- It’s a snap to measure progress when there’s accountability.
- Communication improves as topics around accountability and workflow become part of everyday conversations instead of avoided or only discussed during reviews or as post-mortems.
- You avoid disasters by having your people on board with accountability—everybody’s more comfortable identifying risks, heading off near-misses, and spotting issues that may impede your success.
Accountability can change the tone of your workplace interactions and lead to everybody ensuring what needs to be done gets done—and on time. And when conflicts inevitably come up, a culture of accountability is an asset.
SOLVE CONFLICT AND CREATE OPPORTUNITIES
How you behave in conflict can make or break trust. If you come to the table with accusations, anger, harsh language, blame, and projection, you can fracture your relationship with your people, the people who keep the wheels oiled and engine running. On the other hand, if you can maintain physiological calm during tense moments, see both sides, and advocate for a solution, disagreements become opportunities. Psychology is the foundation of sound conflict management, as what you do with your mind and behavior can influence the outcome heavily. So here’s what to keep in mind:
- Remember, everybody’s on the same team; resist the urge to “find the bad guy.”
- Focus on the problem as a third party in the room, rather than making it personal.
- Be aware of your physiology; if you go into a fight or flight response, you’re more likely to behave irrationally and in a non-constructive way.
- Work to have a solutions-oriented mindset.
- Be open-minded to others’ perspectives.
- Hone your active listening skills. Instead of responding, focus on hearing what each person says, reflecting back to them to gauge understanding, and then contributing your thoughts.
- Get curious. If you’re willing to ask questions and seek understanding, you’ll be more likely to come to a solution.
- Don’t be afraid to take a break if it’s getting too heated. Sometimes people need to pause so they can contribute fully to the conversation.
And the benefit of developing your conflict management skills is that they’re contagious. If you’re in a calm, considerate place in the context of conflict, the people around you will be more likely to pick up on your energy, too. We just can’t ignore that coregulation happens in the workplace and that each person has the opportunity to be a source of calm—or distress—to the people around them.
When your team is working together, through agreement and disagreement, you have more time and energy to focus on building your business.
BRING OUT THE MOST IN YOUR PEOPLE
The benefits of employing psychological concepts to build your business are extensive. And one of the must-have areas to focus on is using psychological concepts to bring the best out in your people. Your business reaps the benefits when you lead your employees, contractors, and consultants to better performance.
Let’s talk about motivation. Ditch the tired model of reward vs. punishment and treat adults like children. Yes, like children. When motivating your people to do their best work, treat them as capable: motivate instead of reward and help instead of punish. Here are a few psychology-infused tips to get you started:
- Encourage and facilitate their best work instead of reprimanding or pointing out where they fall short; give them a foundation to build upon.
- Have them set goals and follow up with them; they’ll be more likely to be engaged with their work with they have something to work toward.
- Communicate openly, thoroughly, and regularly. Transparency can foster creativity.
- Give respect to get respect.
- Work through your fears and place your trust in your people. About 68% of people say that low trust impacts their performance.
If you can use concepts like goal setting, positive reinforcement, transparency, respect, and trust, you can motivate your people to perform better, contributing to your business’s overall success.
Kiley Small Business Strategist
Kiley Peters is a serial entrepreneur and small business strategist. She built and exited an international award winning agency to launch her executive consultancy helping women live the lives they want through entrepreneurship. She is on a mission to help 1 million women build more financially free and fulfilling lives through her founding of RAYNE IX–an executive consultancy helping women fast-track the launch and growth of their consulting practice so they can have greater flexibility, autonomy, and ownership of their lives –and The 100 Collective, a membership and directory for women service-based small business owners who are committed to helping other women succeed. She’s also the host of Welcome to Eloma, a podcast for visionaries, entrepreneurs, and business owners who want to become better leaders, people, and pioneers.more posts by Kiley →