Does Psychology Matter in Business?

  1. myalmighty profile image60
    myalmightyposted 23 months ago

    Businesses run because

    Thousands of businesses are being run today just because you and I want them to run. Because they know that we want their businesses to run. Because they know, what we want. This is solely because our psychologies are being studied and worked upon by the companies of today. Does it apply within the business setup to run it successfully? Yes. Up to a large extent.

    You and I can never run a successful business unless we know what and how our customers want the products to be. And for this, we execute surveys, form fillings, one-on-one discussions, so on and so forth. This is how we get to know the insight of our customers and the psychology behind choosing one product, but not another. I, on the other hand, have always been on the other side of the business; the purchasing side. This gives me an opportunity to let you understand how knowing your supplier’s insight may help you attract further more profits for your company.

    The psychology of the employee

    Businesses are operated by highly qualified, efficient and experienced managers. They deal with conditions and manoeuvre their most important resource, the humans, by coordinating their activities efficiently, controlling them, deciding in advance about the tasks to be performed by them, and of course, by leading them to the accomplishment of the result, all of which requires psychology. The employees' behaviour on the other hand also performs the similar role as that of their managers, and that is also nothing but psychology.

    Know your customer very well

    The marketing department is the most closely connected department to psychology, through which it tries to get the insight of the requirements of the customers and develops the ways to realize these requirements in the most cost-effective manner. Through marketing, businesses develop an understanding of their consumers' needs and knowing the market conditions, they are able to develop the best product and deliver it to their consumers. This is all a psychological game.

    Another point to look for is, how does the psychology play its role in making the right purchase at the right price? It may take years of interactions and convenes with your vendors to understand their mind-set, their tricks of the trade, and in what way to persuade them to your terms. Not just knowing the psychology of the supplier helps, but playing with one also comes handy while negotiating for your terms.

    Saving that extra penny

    Psychology, in business context is the thorough understanding of physical and emotional moves of the party on other hand and the tact of targeting moments of weak moves to bring them to use for your profit. For example, you are in a negotiation session with the supplier and you understood that the vendor is very well capable of providing you the supply within the stipulated time-frame and of the right material. Now, the only thing that matters is the price. You notice that the market is full of manufacturers ready to serve you and this particular supplier does not want to lose the opportunity and shows his eagerness to clinch the deal. He has made several pleading eye contacts with you, he has put forward his best price, which is indeed the best in the market and he has shown his keenness to work for you! Bang on! You now know that this is the time to save those extra $500! "Listen Mr. Parker, you bring the price down by another $500 and it is a deal." And, it is a deal! So, here you caught the moves, understood the desire, read the psychology and made it all in your favour.

    But here is the catch. You need to be extremely careful in finalizing any such deals where the supplier goes out of his way and proposes for a discount which was rather hypothetical for you to get before you sat in for this negotiation meet. The cases can be that the supplier may give you a good deal, price-wise; but may compromise with the quality, or the quality, or may even deprioritize the order for delivery!

    In summary, for a successful business to run, internally as well as externally, the psychologies of the employees, the clients and the suppliers need to be brought to their advantage for the multi-fold profits for the company, but with precaution.