Why brands should encourage competition, according to psychology

There’s a science to competition, and it’s powerful. Humans have an innate competitive spirit, and it shows in the marketplace.

But why is competition so compelling and what does that mean for your brand? 

With the help of Joseph Michelli, a Ph.D. licensed psychologist  and New York Times #1 bestselling author who has written 10 McGraw-Hill books on customer experience, we’ll uncover the root of competition, its relationship to social proof and what your brand has to gain from implementing this tool into your marketing campaigns.

Why consumers compete

“A lot of the work and competitive motivation for customers has come through game theory,” said Michelli. “If you trace the whole world of game theory [back to its roots], it [was] started to understand what the psychological principles were that kept people engaged in a relationship with a brand.”

Michelli says one of the major brain science connections that makes competition so attractive to humans is its ability to provide a tangible rank of a person’s accomplishments out into the social marketplace, allowing them to demonstrate their mastery for all to see. He also relates much of the impact back to social proof, the idea that humans greatly value the opinions of others in the marketplace. 

“Competition is definitely linked to social proof. It proves that I am capable, that I can progress, that I can make strategic decisions that result in payoffs for me and that generate rewards, part of which is social status,” said Michelli. “Sometimes the benefits are tangible, I get some sort of perk from the brand because I have prevailed in the competition. All of the elements: I am strategic, I know how to plan action, I know how to optimize a strategy that maximizes my payoff —those are all kinds of social proof that I am a competent, masterful human being.”

These thoughts aren’t new. Talks of personal development and its relationship to humans' need for superiority dates back multiple centuries. 

“If we go back post-Freudian there’s a psychologist by the name of Alfred Adler, who once said that whenever anyone walks into a room they may not need to be better than the other people in the room, but they just don’t want to be less than. There’s a psychology of wanting to make sure that I belong, of wanting to make sure that I have some sort of social status in the group that I’m in,” said Michelli. “I think that competition in general, and when brands play competitive activities with customers, is an effort for customers to A.) feel belonging and B.) feel some sort of mastery or non-inferiority, to be able to demonstrate that they have competence and they feel good about themselves if they achieve certain levels with a brand.”

“From a psychological perspective, it activates the pleasure centers of our brain, it decreases our sense of threat or fear or anxiety, and we become immersed in the pursuit of tasks and that flow that allows us to lose track of time once we’re in that gamified relationship.”

Friendly competition is a good thing

Some brands fear the idea of upsetting customers through the use of competition, but Michelli says well-designed competition offers a positive experience.  

“We know that rivalry in the marketplace is a good thing. The goal here is to try and get customers to bid more on a product and spend more money on it or to invest more and more time with a product, to advance in more of a gamified social status that customers can then project out into the world and say ‘Hello, I am a victor, I have accomplished something, I have created mastery’ and it just kind of so happens to be a dynamic or a game with the brand,” he said.

If your competition is carefully curated to meet the needs of consumers, you can engage them in your marketing strategy knowing that they’ll feel positive emotions in the end.

“In a well-designed competition I’m going to be able to get some sort of reward even if I don’t prevail to the dominant one. If I can achieve some small victories along the way, I stay engaged in the hopes that the next time I will play and be able to progress and prevail,” explains Michelli. “If you’ve ever gone in the stores where you try to get the stuffed animal with the claw, you get that sense of ‘I got so close last time, so I’ll put in another couple of quarters’… if every time I put a coin in the machine and I won it wouldn’t be very rewarding in the end. There is a certain challenge element that I have to experience.”

Michelli also notes that competitions can be met with open arms by consumers who look forward to the end result.

“Even though you may be competing in a sense to get to a certain level or some kind of badged recognition, oftentimes we do this in a cooperative way,” said Michelli before offering the next example. 

“Today I got my Starbucks latte and before I ordered from my mobile app it asked me if I’d like to enroll in this competition where if you purchase three items [of your liking] over the next five days you can double your Stars,” he said. “Stripping it away, if they just ran a promotion saying 'if anybody buys three items in the next five days...' it’s really different than getting me to say ‘I choose to play this game’ and I can watch my reward occur from participating. It’s not brutal competition, I’m not out there trying to elbow you out of the Starbucks line so I can get ahead of you, but I am saying that I’m willing to play. I might’ve only gone twice in the next few days [before the competition], but what the heck, I’ll go one more time if I can achieve something.” 

The benefits of using competition in marketing strategies 

So aside from that added motivation, what other benefits will brands who are engaging consumers through competition see?

“The key [benefit] is that you get people emotionally invested. It’s one thing to get impressions on eyeballs, I’ve seen your ad 700 times, but if it isn’t visceral, if it isn’t emotional it’s not likely memorable,” said Michelli. “The psychology of memory is really linked to emotionality. If I asked you all of the concerts you’ve seen in your life, you’d have a hard time listing them, but if I asked you about your favorite one, you’d be able to pull that out and that’s because it’s rich with emotion. It was either a train wreck concert and you'll never forget it, or it was amazing and that’s what we remember — we don’t remember all of the gray.”

Encouraging competition within your brand's promotions can occur between customers or independently with one customer racing to beat a countdown timer. No matter the approach, Michelli says implementing a friendly interactive game can help to strengthen the personal connection customers have with your brand and promote brand awareness. 

“From the standpoint of gaming, the key is for me to get pulled in, this is not something that is happening outside of me, I am a participant in the engagement and as I’m engaged it’s more emotional to me,” said Michelli. “I get the adrenaline, I get the activation of the limbic system, all of which gives me the opportunity to remember this activity and the brand that threw the concert, if you will.”

It’s also important to note that competition is a mutually beneficial idea. Not only does it add to the customer’s experience with your brand, but it also holds the power to motivate consumers in a way that drives traffic, revenue or any other sort of marketing activity.

“The goal is to always know what kind of behavior you want to drive. Do you want to drive urgency, which is [the use of a deadline in your campaigns]? I could drive discovery and say ‘if you buy anything that you haven’t purchased before in the next 30 days, you get triple the stars.’ Now what have we done? We just provoked a customer to get out [of] their old habits, try a new item and maybe add value to what they’re currently getting so now their receipt goes from $7 per visit to $12 per visit because they really enjoy this new item,” said Michelli.

Competition certainly has value and there’s no denying it. Creating a positive psychological response to your marketing campaigns is possible with the added help of a friendly game between your brand and the customers who support it.