Many aspects of modern business administration and management come from the world of applied psychology. Here are four examples of applied psychology principles incorporated into modern business.
1. Employee Engagement
A small business is highly dependent on the performance of its employees. If staff members feel unmotivated or disengaged from the company, productivity and quality of work will suffer. In this situation, an expert who has earned a degree from in-campus or online applied psychology schools can come up with a strategy for greater employee engagement; this strategy can not only help to improve the workplace, but also improve employee morale and job performance.
2. Consumer Psychology
Marketing strategies such as A/B testing and storytelling can be effective for some companies, but small business owners who would like to start grabbing significant market share should consider applying consumer psychology techniques.
For example, a neighborhood pizzeria that keeps a blog could formulate a post that highlights social proof, an advanced marketing principle based on our need to see acceptance by people who can be trusted. To this effect, the pizzeria owner can organize a birthday party for a neighborhood child; photos of the event showing happy children with their parents can be shared with blog readers or on social media.
3. Recruiting and Retaining Top Talent
Holding on to valuable employees is something that not many small business owners are able to do. The most talented workers in small companies often leave for opportunities at larger enterprises; most of the time, the motivation to leave is not related to financial compensation.
Very few small business owners are familiar with the negotiation techniques required to retain top talent; a common mistake involves offering higher pay in exchange for a lot more work. With the right negotiation techniques based on principles of applied psychology, a company owner can determine what employees really want before extending offers that will make them feel undermined instead of appreciated.
4. Anchoring and Strategic Pricing
Sales success in the retail industry can be achieved with the right pricing strategy. Most small business owners wish that they could operate as a Walmart store, meaning that they would like to be able to offer very low prices while still extracting major profits. The anchoring principle of applied consumer psychology does not favor low prices across all items in a store. If a boutique sells a jacket for $40, reducing it to $25 for a sales event would work better than a permanent reduction to $15.
In the end, small business owners familiar with applied psychology will always have an edge over their competitors.
Hannah Whittenly is a freelance writer and mother of two from Sacramento, CA. She enjoys kayaking and reading books by the lake.