November 19, 2018
Cognitive Biases For Effective Marketing
The human brain is an interesting thing. Neuroscientists have been studying the way it works for years, yet the workings of the mind are still a great mystery. But there are things we already know about the way people think — and things we as marketers can do to persuade our customers.
What's a cognitive bias?
A cognitive bias is a deviation from rationality that causes a person to regard their subjective perception of the world higher than factual information.
This results in thinking errors. Every day, whether we know it or not, we are susceptible to them. Essentially, a cognitive bias is an unintentional way of thinking that influences how we perceive the world around us.
Experiencing a cognitive bias is the result of your brain trying to simplify information processing. Even the most objective and logical person can be a victim of these biases, leading to judgments or decisions that affect their purchasing habits and intent.
Because of this, cognitive biases can be the marketer's best friend. Talented neuromarketers take advantage of cognitive biases to deliver powerful, high-performing campaigns.
Here are five ways to use cognitive bias to your advantage:
1. In-group favoritism
Feeling like you're part of the "tribe" is a human need that stems from hundreds of thousands of years of evolution.
In the early days of the Homosapien, sticking to a close-knit group was essential for survival. Those Homosapien survivors are our ancestors, and as humans, we share their primal need to be part of a social group.
That's why one of the most well-known and effective marketing strategies is to provide customers with a sense of belonging. People will often purchase products or sign up to services in an effort to feel like they're part of a specific group.
Some great examples of the way marketers use in-group favoritism to capture audiences include:
- Get a Mac: Apple's famous campaign that split computer users into "Mac" and "PC" tribes. It generated scores of loyal Apple users and still inspires heated dinner debates.
- Bernie Sanders: inclusive use of copy like "we" and "us" helped Bernie achieve record-breaking donations from engaged voters (rather than special interest groups).
- Red Bull: The energy drink giant has established a strong brand community around live events and sponsorships that generate strong community buzz.
2. Hyperbolic discounting
Those same loincloth wearing ancestors passed another trait onto us: the need for immediate benefits. For a caveman, immediate benefits were important for survival. Waiting on a meal could mean not making it through the night.
It was useful back then, but now it's a thinking error called hyperbolic discounting. In marketing terms, it's the power of right now.
Presented with two rewards, people will show a preference for the one they can receive right away. Want $50 now? Or $100 next year? Most people will just take the $50 and not worry about doubling their money in a years time.
The usefulness of hyperbolic discount is evident when looking at the increased popularity of Google searches such as "same-day shipping" and "open now."
Take advantage of your audience's preference for immediate gratification by offering quick, tangible benefits.
3. Loss aversion
Loss aversion is a strong emotional trigger that focuses on people's preference to avoid loss rather than acquiring gain.
Imagine you're in the office and you overhear your boss saying she wants to give you a raise of $300 a month. Now imagine another situation. You're grabbing lunch and you overhear your boss saying the same thing — except she wants to cut your salary by $300 a month.
Which situation creates a stronger reaction in you? The feeling of losing out always feels more intense.
Loss aversion is used in classic marketing techniques that we see daily with phrases like "don't miss out!" and "limited time only!" If your audience feels like they're going to miss out on something rare or special, they're much more likely to convert in the heat of the moment.
The concept of loss aversion works especially well for newsletter subject lines and headline copy. It invokes a sense of urgency in the mind of the audience.
Many businesses also have implemented loss aversion on a larger scale. These brands have been wildly successful using the concepts of loss aversion and scarcity:
- Supreme: this streetwear brand sells out in minutes at ridiculous profit margins due to a clever scarcity strategy.
- Snapchat: because of the fleeting nature of Snapchat's content, it's users open the app 18 times per day on average.
- Groupon: this online deal aggregator turns over billions by partnering with businesses to offer deals that are only available within a limited time frame.
4. Status quo bias
As creatures of habit, people prefer familiar and trusted experiences, even if they're not optimal.
Once a customer makes a purchase and has a good experience, they can become emotionally invested in your brand through the status quo bias. They know what to expect, and when to expect it.
Take advantage of the status quo bias by personalizing your landing pages, emails and communications with your customers. Create a sense of trust and familiarity to keep your customers coming back to the experiences that they know and love.
5. Choice supportive bias
Humans have a tendency to ignore mistakes in their decisions. Choice supportive bias is an emotional bias that causes us to think of ourselves as totally rational. Even if we're not being rational at all.
Customers will use this bias to rationalize spending money after the fact, even if they've bought something on a whim. Essentially, people like to feel right.
It's such a strong emotional state that people will convince themselves that they've still made the right decision after discovering that there's a better deal on the market. As a marketer, help your audience confirm they've made the right decision by executing effective onboarding and retention strategies.
Maintain an ongoing relationship with your customers to help them assure themselves they've made the right decision by sticking with your brand.