– Adriana González Gil
The way we perceive our environment and make judgments and decisions regarding it, is subjective and imperfect. Today we’re going to talk about one of the many reasons our perception is flawed: cognitive biases.
Cognitive biases are common errors in reasoning that occur when we value perception or beliefs over reality and some of them are common enough that you can count on them to influence consumer behavior and include them in your marketing strategy.
Here are some of the most common examples of cognitive biases and how to use them to your advantage to boost sales.
Bandwagon effect
Have you heard of social experiments where people start looking at the sky or enter an elevator looking at the same spot and just because everyone is doing it other people soon follow suit?
This is because of the bandwagon effect, which is the tendency to do or believe things because many other people do or believe the same. It’s related to groupthink and herd behavior, which comes from the natural human need to belong to a group. So inherently we will make the popular choice just because of its own popularity and not basing the decision on any rational process.
We can use this to generate trust in our consumers by showing our social influence, getting testimonials from consumers or even getting into influencer marketing.
Loss aversion
In a 1979 study, psychologists Daniel Kahneman and Amos Tversky proved that “people underweight outcomes that are merely probable in comparison with outcomes that are obtained with certainty”. Simply put, the “fear of loss is greater than the joy of gain” and that’s why if you were given a choice to get €90, or gamble to earn €100 with a 90% chance of winning, you would most likely pick the sure option.
If a brand manages to create an image in the mind of the consumers that by missing an opportunity and not buying a particular product they are likely to lose out on something, it can successfully manage to achieve higher sales of its products. Good examples of this are “free trial” strategies. When people have the opportunity to try your product or service and really engage with it, they are more likely to form an attachment to it than if they never owned it, to begin with. They will feel more pain in losing the benefits they acquired. The key is that the perceived value of what we’re offering surpasses that loss aversion or to make people feel aversion to losing our products or services.
Confirmation bias
We have the tendency to search for, interpret, focus on and remember information in a way that confirms one’s preconceptions and beliefs. This is why it’s important to know why we do what we do and communicate our beliefs so that they can resonate with those of our buyers. For instance, if a brand can create a situation where it can affirm the belief of the consumer pertaining to certain ingredients of the product, it is more likely to be a success in the market.
Find out what preconceptions your brand can validate and use them and this way you will make an emotional connection that is stronger than rational arguments.
The decoy effect
Have you ever wondered why most subscription plans have 3 options? It’s because in most cases one of the options is not meant to sell, but to influence your choice between the other two.
Basically, consumer preferences for two given options change when presented with a third option that is “asymmetrical”. This third option is added knowing that people won’t buy it but that it will make your preferred choice look better.
For example, if you have a “small” presentation of your product for 3 euro and a “large” one for 7, people will gravitate towards the small one. If you add a “medium” option for 6 euro this one looks expensive now and the large one will look like a deal.
The IKEA effect
Consumers put a disproportionately high value un products they partially created, much like when building IKEA furniture.
This applies to other brands by including your client in your process, making them feel heard and, if possible, give them the option to customize.
A notable example of this is Coca-Cola’s “Share a Coke” campaign, which allowed users to have their own customized version of the Coke. The results were notable and almost instant. Just within the first year, Coca-Cola saw significant, measurable success:
- The Share a Coke campaign was one of the most successful marketing campaigns ever in Coca-Cola’s history.
- Over 500,000 photos were posted online using the #ShareaCoke hashtag.
- Coca-Cola users created over six million virtual Coke bottles.
- Coca-Cola gained 25 million Facebook followers.
Besides these there are many other cognitive biases and the best way of knowing if their application is working in your consumers minds is to measure their effect. In the end, what we aim with them all is to get people to trust us, to feel less stress or anxiety about acquiring our product and to engage with our brand.
To know how we can measure these indicators write to adriana.gonzalez@sferabusiness.ro or go to our neuroscience page.
