Believe it! Our brain has certain shortcuts that work against our behavior.
These shortcuts can alter your psychology, and hence, are impactful in all genres of personal and business life.
Most of the times these shortcuts may block all your business marketing efforts and can result in complete failure of your business.
Want to know what these shortcuts are?
Want to know how you can use them in business marketing?
Want to know how your mind is blocking your business efforts?
Read this post to discover everything about the so-called – Cognitive Biases.
What are Cognitive Biases?
Cognitive biases are little psychological tricks that our brain plays against our instinct and efforts. The biggest problem is that we are totally helpless and can do nothing to prevent them. Most of the times, cognitive biases happen and take over before we realize them.
Though you cannot prevent them from occurring, there are certain ways you can channel them in the right direction and bring positives for your business. How to do that? This is what this post will tell you.
How Cognitive Biases Work?
A cognitive bias is a form of error in thinking that occurs when people process or interpret information in the world surrounding them. Our brain is subject to limitations.
Cognitive biases are the result of your brain’s attempt to simplify information processing.
When you are judgmental about the world around you, you need to think more logically, objectively, and must be capable enough to evaluate the information. But sudden cognitive biases can lead to bad judgments and poor decisions.
What is the cause of Cognitive Biases?
When you think too hard about making a decision, you probably need a lot of time to make a simple choice. Because of sheer complexities involved in the world and too much information available, it is necessary sometimes to depend on some shortcuts of the brain that allow us to act quickly.
Cognitive biases can occur because of a number of different things. These are known as heuristics that play an important contributing role. They can be surprisingly correct but most of the times lead to errors in decision making.
The cognitive biases are influenced by social pressures, emotions, individual motivations, and limit the ability of the mind to process the information.
Now the most important thing is to comprehend different types of cognitive biases and learn how you can use them in marketing.
Types of Cognitive Biases and How to Use them in Marketing
1. Fear of Losing:
We all wish to win. We don’t want to experience a loss even in our dreams. When we are the threat of losing something, which is important to us, we put extra energy to retain it.
This indicates, the fear of losing is so strong that we crave to put in all our energy, efforts, and resources. The fear of losing even tends to change our preferences and alter our priorities.
Using Fear of Losing in Marketing:
The same psychological thought would be there in your customer’s minds. Use this to let them feel like a big loss if they are not buying your products or associated to your business.
Develop the same fear among them by showcasing how important your product or service is. Eventually, they would not want to lose a beneficial product!
2. Status Quo:
We don’t like to change. Even if it is for a genuine reason, we would want to continue working with our existing resources and tools. It is because a change needs energy. The same holds true for our mind. It loves working in the same environment and prefers sticking to stuff it is familiar with.
Using Status Quo Bias in Marketing:
Stay connected to your audience by not forcing any changing to them. If the change is necessary, make it as natural as possible.
Highlight how beneficial the change is and how easily you can adapt it. Most importantly, avoid overloading your audience with decisions. This can result in confusion and tiredness among them, which definitely they would want to avoid.
Nothing is fixed in the human mind, be it a person, idea, or a product. We immediately compare such things with other similar items in the market. Be it the flight fare or one of your friend; we tend to compare things before making a final decision.
Using Anchoring in Marketing:
You cannot alter this psychology, but you can control it to some extent. Rather than allowing your customers to search for a better option, suggest them a better option front hand.
For example, if you are selling a product, don’t wait for your customer to compare a similar product from another brand, which is available at a lower price.
Rather point that other products like yours available at a lower price would not deliver listed end results, or have an unhealthy composition, and more. Direct your customer’s mind and stick to the point that you are offering a real bargain.
4. A frame of Reference:
We have a perception of a thing based on how we have perceived it. There is a change in frame of reference based on the way we think about our decisions and preferences.
For example, while one would consider a situation as positive, winning, and successful, others might consider the same situation as a failure, hopeless, and disastrous. Even though two individuals used the same service or experience the same situation, two of them have different perceptions of a thing.
Using Framing in Marketing:
Before you offer your customers a product or service, you need to frame it in a way that you want the customers to perceive it.
If you are selling a product or service, you need to make your customers aware of it why it is important and why it is necessary. You need to present them a problem and then show how your product is the best solution to it.
For example, if you are a website designer using warm, soft colors, you need to create a frame of a friendly, safe, and eco-friendly environment. This way, you would be able to relate to your customers and sell products efficiently.
5. Ingroup Biases:
We always have strong preferences for our group while showing negative behavior towards others. This tribal nature is common among people.
When we are closed to someone or something, we tend to release the love hormone, oxytocin. This makes our bond much stronger with them.
For this reason, we develop negative feelings for another group. We often consider them dangerous, boring, and wrong.
Using Ingroup Bias in Marketing:
If you are targeting a specific group, then strategize your marketing accordingly so that you appear part of that group. Show them that you understand their needs and requirements.
You can use testimonials from people belonging to the same target group. Use design and images that reflect the same thing. You need to focus on positioning yourself correctly with the prospects.
6. Bandwagon Effect:
This sort of effect is a sign of conformity, which is important for groups to work. It is essential so that the group or team can work as a single body.
It is important to adjust our behavior according to the group so that there is no chaos and we don’t feel neglected. Moreover, such an effect helps combat moments of uncertainty.
Using the Bandwagon Effect in Marketing:
Make sure you present your offer in a way that is similar to what other people do. Check that any uncertain decision would work for you or not. If we know someone who has brought your product and happy with it, there will be more other people happy with the offer.
You are now aware of different types of cognitive biases. We have also discussed the ways to use them in marketing to gain effective outcomes. But having this much information is not sufficient. There are more insights you ought to know.
Different Cognitive Biases Influencing Buyer’s Decision:
When you use such cognitive biases in marketing to gain positive outcomes, it is of utmost importance to know about different cognitive biases influencing the buyer’s decision. This would help you frame your marketing strategy accordingly.
1. Sheer Exposure Effect:
The bias is about people’s tendency to develop a liking for a product when they are recurrently visible to it. It is because people get used to the product.
You can use this bias in your marketing strategy by advertising your product more numbers of times. This would develop a familiarity with the product among the buyers.
2. Authority Bias:
In this type of cognitive biases, the people tend to measure the view of an authority figure more heavily. People are more conveniently convinced by authority figures.
One good example of this is the toothpaste where marketers use authority figures like doctors or a famous artist to influence the buyer’s decision. As per the research, when people see these authority figures endorsing the product, then it automatically creates an effect on the subject.
Hence, you can use an authority figure in the promotion or marketing of your product. This would help you influence the buyer’s decision accordingly.
3. Decoy Effect:
Such form of cognitive bias occurs when individuals are influenced to make an unconventional decision to what they have initially selected. It adds a decoy. It is used by lots of advertisers and marketers to influence the buyer’s behavior.
A good example of these various sizes of popcorn buckets available in a movie hall. Lots of people want to purchase the small size bucket, as the big one seems high rated. However, when there is another option to purchase a medium size bucket, it would change the buying behavior of consumers. Because of the third available option of the medium bucket, the bigger size bucket appears a better deal. Hence, more numbers of buyers would prefer buying it.
Therefore, you must offer enough options to your consumers so that the most profitable deal seems most lucrative to them.
4. Humour Effect:
As per this bias, people tend to remember humorous things better than non-humorous things. When there is a funny ad displayed on the screen, then a number of people would watch it, than otherwise.
Hence, plan an ad and marketing campaign that is humorous to the people, but at the same time rewarding and informative to them.
5. Recency Effect and Primacy Effect:
These two effects have a similar nature. They illustrate the ability of a person to remember the first thing mentioned or the most recent thing mentioned. For example, if you display the company’s name at first or the last place, then most of the people would remember it.
Being a marketer you must present the most important information in the beginning and at the end of an advertisement. This could be the company’s name, the name of the product, website, brand or anything. Just make sure you present the information in the right place so that the number of people remembers it.
Cognitive Bias and Decision Making:
A buyer tends to make up to 35,000 decisions on a daily basis. The decision is influenced by numerous aspects of experiences, emotions, and environment. To ensure that you successfully use cognitive biases in your marketing strategy, you must have an idea about such cognitive biases as well.
1. Availability Heuristic:
It is related to overestimating the significance of information, which is easiest to recall. It is natural to make a decision on the basis of easily recalled knowledge, but it is equally vital to think twice.
Hence, if you are in doubt regarding decision making in marketing, supplement intuition with valid statistics.
2. Dunning-Kruger Effect:
This cognitive bias occurs when unskilled people overestimate their ability, and expert people underestimate themselves.
You can succeed in decision making when you avoid taking decisions on self-assessment when you have limited abilities. Equally, if you possess a high level of competence in a particular area then avoid over-thinking about it.
3. Confirmation Bias:
This cognitive bias states that you seek and prioritize information that confirms your current beliefs.
When seeking out the evidence for your belief then you would feel more secure. But this won’t necessarily result in a better decision. Hence, always consider a broad spectrum of opinions and analyze the pros and cons before taking a final decision.
So, this is all about some prominent and valuable cognitive biases that affect business marketing. Having a better understanding of them would ensure you are able to use them efficiently in business practices.
But the degree of presence of these cognitive biases would vary in every customer. You just have to be aware of them and work to create a psychological framework that can help customers take the best decision.