Your insightful guide to using competition in B2C marketing

Competition is a results-driven concept — one that originated in the brain and has evolved to be a strong consumer engagement tool. This guide is designed to provide context on the value of competition in consumers and how you can implement this psychology in your campaigns.

To get an overview of what will be included in this guide, check out these links:

• What is competition?
• Why brands should encourage competition, according to psychology 
• Types of competition tactics
• Benefits of competition 

What is competition?

As it relates to consumer psychology, competition can be defined as an innate human emotion driving the desire to succeed above all else in social and physical marketplaces. Within this guide, marketers at consumer-facing brands will gain insight into how the psychology of competition impacts consumer behavior and perceived value of your brand and products.

Why brands should encourage competition, according to psychology 

The human desire for competition has been around just as long as humans themselves. That means this psychological element has a stake in various aspects of human life —  including how consumers interact with brands.

Joseph Michelli, a Ph.D. licensed psychologist and New York Times #1 bestselling author who has written 10 books on customer experience, talked us through the story of competition and why brands should encourage the use of it in their campaigns.

Competition has long roots in marketing. So much so, that Michelli says concepts like game theory were created to understand what psychological principles kept people engaged with a brand. One of those is social proof, the idea that humans base many of their decisions on the actions of trusted individuals they see or know.

The more consumers are able to compete with those around them, the more likely they are to collect proof deeming them as capable, strategic human beings. It feeds their need for superiority and gives them a sense of belonging and mastery. Ultimately, the rewards consumers receive from a competition, big or small, allow them to feel better about themselves and their place in society.

(Read more about why brands should encourage competition, according to psychology.) 

Types of competition tactics

With such a rich history in marketing, competition has taken on many forms as brands work to implement it into their campaigns and promotions. Here are three types of competition tactics — and one honorable mention — that help drive consumer engagement.

1. Getting the best bargain

Competing for a deal is standard practice for many consumers, and it's right in line with consumer psychology. 

These competitions often come in the form of limited-time offers where consumers can “win the reward” of a discounted price before the campaign ends or another consumer buys the product. Publicized examples of this include events like Black Friday and Amazon Prime Day, flash sales and sitewide discounts.

2. Completing a call-to-action

When consumers are given a clear task to perform, they’re also motivated by the benefits that may come from accomplishing any associated goals. 

Having a goal is essential to consumer engagement and it's the foundation of any strong competition. It provides consumers with a clear understanding of what they need to do and why it matters to them.

Consumers who are told to “Act Fast” or “Enter a contest for a chance to win,” are given the opportunity to reach their newfound goal of earning a reward. Other CTAs may include other directives like telling consumers to click a link or go to your website for more information.

3. Racing against the clock

Motivating fast action in consumers is a primary focus for many brands, and it can occur quickly when competitions and rewards are at play. 

Countdown timers, deadlines and other tactics that include racing against a clock can be powerful motivators for quick movement in consumers. This sort of competition can play on a number of psychological principles: the fear of missing out (FOMO), anticipation, scarcity and more. Consumers may get FOMO at losing out on a product, or experience anticipation as they imagine “winning” the competition. When brain science is leveraged in this way, consumers are able to exercise more of their psychological strengths.

(Read more about the 3 types of competition tactics.) 

Benefits of competition

Late last year, we spoke to Joseph Michelli, a Ph.D. Licensed Psychologist and New York Times #1 bestselling author, about the psychology of competition and how it became a staple tool in consumer marketing. He also mentioned the variety of benefits competition has when added to marketing strategies. Here are four of them: 

1. Cultivates emotional investment

“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,” Michelli said.

Competitions are immersive experiences and largely in part to the emotions they create. Consumers must engage in a number of ways: through their actions, mindset and emotions.

2. Encourages higher engagement

“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," Michelli said. "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.”

When customers are aware that a reward, or set of rewards, are available to them, the idea of having that reward encourages them to engage further. And the reward doesn’t have to be big either — it only has to be attractive enough for the consumer to see its value.

3. Creates brand loyalty

“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. 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," Michelli said.

Humans have an innate desire to belong, just as much as they have an innate desire to win. In the context of the consumer’s journey, participation in a campaign or competition allows customers to engage with others who also have an appreciation for a brand. The further they get in the competition, the more accomplished customers feel, and those feelings usher in brand loyalty.

4. Supports conversion rates

“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," Michelli said.

Competitions have a number of benefits, and if executed correctly, they all add up to increased conversion rates. The more customers invest time into a competition and the closer they get to winning a reward, the more they may engage with your brand in hopes of coming out on top.

(Read more about the 4 benefits of competition.)

Competition is a natural human instinct and a common practice in marketing campaigns. Stay tuned to our blog to continue learning about it.