One of the most influential forces in marketing is the power of psychology.
In recent years, neuroscience has changed the way in which we view marketing, approach customers, and run our businesses. A deeper understanding of the human brain will dramatically impact your marketing success.
One broad area of psychology deals with cognitive biases. A cognitive bias is "a type of error in thinking that occurs when people are processing and interpreting information in the world" (source).
Everyone is prone to exhibit cognitive biases. This is not due to lack of intelligence or awareness, but simply because the brain is wired in surprising ways.
Here are four cognitive biases that will affect your marketing strategies.
1. Loss Aversion
Loss aversion is a bias that causes people to avoid loss more strongly than they pursue gains.
For example, taking $50 away from a person will prompt greater excitement than giving them $50. This bias and its corollary, the status quo bias and endowment effect, cause us to prefer things we already own.
In marketing, you should present your product or service as something that could be lost if the customer doesn't act. Causing them to feel a sense of loss will evoke a stronger response than offering something for them to gain.
Triggering this cognitive bias in landing pages, ads, or web copy can turn casual browsers into zealous customers.
The anchoring bias causes people to rely on the first piece of information they hear or see about a product or service.
If you walk into a store and see a sweater for $500, then $500 is your anchor for that particular product. If you continue walking and see a similar sweater for $250, then your mind immediately makes a comparison, causing you to perceive it as inexpensive. Your decision is swayed by your focalism on the first sweater's price.
Anchoring impacts more than price perception, of course. A person whose mind is anchored on one point of information may be blind to more important points of consideration.
Someone in the market for a car may be focused on leather seats. This fixation anchors her mind to only observe the car's interior, making her oblivious to issues such as the quality of the engine, the odometer reading, and the gas mileage.
An awareness of anchoring can allow you to implement techniques that will cater to this human bias. Marking down prices, setting quantity limits, or focusing users' attention on the primary consideration point in a purchase will affect how they buy.
3. Choice-Supportive Bias
All of us hold preferences that have little factual evidence to support them. We will defend a preferred flavor of ice cream, type of phone, favorite sports team, political ideology, superstitious hunch, or worldview because we focus on its positives, not giving much consideration to its negatives.
We've made a decision to be a fan of, say, the Yankees. Therefore, we tend to discount a losing streak, poor pitching performance, or incompetent management. Instead, we praise their star batter, laud their fielding, and admire their history. This is a simple example of the choice-supportive bias in action.
This bias affects marketing in the following ways:
- People tend to buy products and services with which they are familiar.
- People tend to trust any piece of information that seems to support this choice.
- People tend to forget any information that opposes a strongly held viewpoint.
The choice-supportive bias works in your favor once you've gained a customer. Using email marketing methods, you can reinforce the customer's perception of your brand by sharing testimonials, evidence of your product's superiority, and reminders of why the customer chose your brand.
Before a customer converts, however, you can trigger the choice-supportive bias. You can do this by creating micro-conversions--an email opt-in, a social media like--thus causing him or her to make a decision that he or she will unconsciously defend.
When customers' progress and decision-making are confirmed, they will move seamlessly down your marketing funnel.
4. Framing Effect
Framing is one of the most common cognitive biases used in marketing. Simply put, framing influences how people make a choice dependent upon the way it is presented, worded, or framed.
The famous framing effect experiment by Kahneman and Tversky presented subjects with two choices:
- Option 1: There is a 33% chance of saving 600 people, but there's a 66% chance of saving no one. Outcome: 200 lives will be saved!
- Option 2: There is a 33% chance that no people will die. There is a 66% chance that everyone will die. Outcome: 400 people will die.
The two choices have similar outcomes but are framed in different ways--one positive and one negative. The vast majority of respondents selected the positively framed treatment.
Framing makes a difference.
Simple wording changes have a framing effect:
- Global warming vs. Climate change
- Save 50% vs. Half off
- You won! vs. She lost!
- Pro-choice vs. Abortion
- 30% full vs. 70% empty
- No military experience vs. Extensive political experience
- 90% chance of survival vs. 10% likelihood of death
The framing effect is widely used by politicians, salespeople, parents, and everyone in between to shape the way that people respond to information. Facts are facts, but the way you present those facts influences how people respond to them.
In marketing, loss framing can be used to present information that could trigger the customer's loss aversion bias. Alternately, you should present other facts in a gain framing format to influence a higher perception of your product or service. Statistical framing allows you to present a picture of your product as positive or negative, depending on the positive or negative terms you choose to highlight in the statistic.
To sum up:
- Loss aversion causes customers to tenaciously cling to what they have.
- Anchoring causes customers to focus on the first information that they receive.
- Choice-supportive bias means customers are comfortable with the familiar and blind to opposing evidence.
- Framing influences the positive or negative perception of a product, service, or fact.
These cognitive biases are present in varying degrees in nearly every customer. You simply need to be aware of them and work with them, creating a psychological framework that helps customers make the best decision.
What cognitive biases do you use in your marketing?