When it comes to boosting sales, marketing firms and retailers around the world have collectively spent countless amounts of time, money and effort researching consumer behavior to pinpoint exactly what motivates people to make purchases. It’s no secret, for example, that one of the world’s largest e-retailers, Amazon, has spent as much as $6.5 billion on R&D in a single year. And here is one of their key findings: Strategic email marketing is one of the most powerful ways to boost sales.

In fact, many e-commerce businesses tend to underestimate how much of Amazon’s revenue relies on email marketing: About 35 percent of all sales on Amazon comes from its recommendation engine—the majority of which is powered by the company’s email marketing efforts. Furthermore, the Direct Marketing Association has consistently ranked email marketing as the most effective marketing channel with an ROI of $38 for every $1 invested.

So, how do you harness the power of email marketing? It’s not simply a matter of fancy HTML templates or killer copywriting. It depends a lot on how consumers think and act. Here are three psychological tactics for boosting sales through email marketing.

 

Emphasize Scarcity

You’ve probably received an email from a retailer offering you a deal with some sense of urgency or scarcity: “Limited time offer!”; “Only 2 in stock!”; “Act now!”

This tactic works, and there is even a psychological study explaining how the idea of scarcity influences people to add more value to an item or offer. In this particular study, people were offered jars with either 10 cookies or just 2 cookies; but, unbeknownst to the participants, both jars contained exactly the same type of cookie. When asked which “type” of cookie the participants valued more, the clear winner was the jar that had only two. 

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So, how does this relate to your email campaigns? Research shows that adding the idea of “scarcity” can automatically boost  open rates by up to 39 percent. You can create this by offering limited time discounts, by selling products that have limited availability or by introducing offers that are only available for certain periods. No matter how you implement this sense of urgency and scarcity into your emails, it is likely to motivate your customers to act.

 

Tailor & Target Emails Instead of “Batching and Blasting”

Dale Carnegie famously said that the sweetest sound to anyone is the sound of their name; in other words: Personalizing your emails is extremely important. And it’s not as much work as you might think. Luckily, there are lots of email service providers that enable you to automate emails yet still add a great deal of personalizing based on user activity, interests and other unique attributes.

In fact, a core portion of Amazon’s recommendation engine—both on site and in emails—rely on personalization. If Amazon were to remove personalization from its business model, it would likely cut its revenue in half. That’s precisely why if you order a TV from Amazon in the morning, you can count on getting an email that same evening or the following day encouraging you to purchase a DVD player.

 

List the most expensive item first

Assuming you want to send an email promoting a series of products, do you show the more expensive product or the cheaper one first? If you’re like most people, you intuitively want to display the cheaper one first. However, this is often a classic mistake!

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As psychology has repeatedly revealed, you would get significantly better results by displaying the more expensive product first. In fact, intentionally including more expensive products is a proven way to give people a frame of reference for comparing prices, which leads to a boost in sales. Two psychological concepts that explain this are “anchoring” and “the contrast effect.” Both concepts infer that we do not judge anything in a vacuum—instead, we judge one thing in comparison to another. So, your $299 handbag is not necessarily expensive—what matters is how much other handbags are… $29 or $2,999?

When selling expensive products through email, don’t be afraid to “anchor” them by first introducing more expensive products than the actual ones you want to sell. When someone sees a products that costs $1,000, and then suddenly sees other similar products that cost $899—usually, it’s a sign of relief, as if they got a bargain, and it can be very good for boosting revenue.

Robert Mening is a web consultant and founder of the Website Setup project, where he has helped over 25,000 people create their own websites.

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