Cognitive biases – tendencies to think a certain way

In last weeks blog post, we talked about pains that consumers have and how you can help ease that pain through your marketing.

To be able to better market and sell to your prospect, it can be helpful to understand some tendencies they may have.

Luckily, wikipedia has amassed a list of cognitive biases for us.

These are “tendencies to think in certain ways that can lead to systematic deviations from a standard of rationality or good judgment.”

Here’s a link to that list : https://en.wikipedia.org/wiki/List_of_cognitive_biases

Here are my favorites as they pertain to marketing your business.

Bandwagon Effect

Wiki definition:

The bandwagon effect is a phenomenon whereby the rate of uptake of beliefs, ideas, fads and trends increases the more that they have already been adopted by others.

For example:

Amazon does a lot of things well; one of the best is their customer reviews. It becomes a lot easier to buy the product everyone else is already talking positively about.

Use for your business:

The more unclear a decision, the more likely people will rely on the actions of others. Infusing customer reviews or testimonials into your sales proposal and website will help reaffirm people that it is okay to jump on your bandwagon because there are plenty of people who already trust you.

 

Confirmation Bias

Wiki definition:

The tendency to search for, interpret, prefer, and recall information in a way that confirms one’s beliefs or hypotheses while giving disproportionately less attention to information that contradicts it.

For example:

The way two people with opposing views can use the same statistics to support their case, similar to the same glass being half full or half empty.

Use for your business:

If someone has a preconceived notion about your business or industry, you may want to confront that notion or everything might become white noise.

One way to do this is to admit to the downside. By openly addressing the downsides in your industry, you’re giving credibility to the upsides you present.

Southwest is taking this approach with their new “Transfarency” commercials. They’re addressing the downsides in their industry as well as what they’re trying to do about it.

 

Contrast Effect

Wiki definition:

The enhancement or reduction of a certain perception’s stimuli when compared with a recently observed, contrasting object.

For example:

Oddly enough, I saw the contrast effect in action on the wikipedia page for contrast effect. At the top of the page, they were asking for donations to keep the site ad free; here was the copy:

DEAR WIKIPEDIA READERS: To protect our independence, we’ll never run ads. We survive on donations averaging about $15. Now is the time we ask. If everyone reading this right now gave $3, our fundraiser would be done within an hour. Yep, that’s about the price of buying a programmer a coffee. 

You can see how they started with a larger number of $15 to establish what average donations are, and then used a cup of coffee as contrast to your possible donation. So, instead of asking for $15, or even $3, they ask if you can simply spare a cup of coffee.

Use for your business:

One way to use this to your advantage is to sell your large ticket item first and then up-sell with add-ons. Two examples of this are car dealerships and tailored suits.

The dealership sells you on the car first and then incrementally increases that monthly lease with upgrades. That’s because the leather seat upgrade doesn’t seem that expensive in contrast to the overall cost of the car.

A store that sells suits will sell the suit before selling the socks, belts, and ties that go with it. Because, once again, those items don’t seem so expensive in contrast to the expensive suit.

Consider the order of the way you’re presenting your product/service and how you can introduce contrast into the way people perceive the price.

 

Decoy Effect

Wiki definition:

The phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.

For example:

Have a look at the current subscription options for the New York Post below. You will notice that either option under “Good” is a decoy.

It doesn’t make any sense to pay $2.50 for Saturday-Sunday when you can pay the same amount and get Friday for free.

The same goes for paying $4.99 for Monday-Friday when you can pay $4.99 for Monday-Sunday.

The Good option was purely created as a decoy effect to make the Better and Best options more attractive.

Use for your business:

Sometimes, it can be difficult to make a decision even when we’re motivated to do so. If you can add a decoy as an option, it makes it easier for the consumer to come to a conclusion. Consider adding a decoy into your options to help encourage a favorable decision.

Framing Effect

Wiki definition:

Drawing different conclusions from the same information, depending on how that information is presented.

For example:

A picture frame is an obvious example in that the frame can add or subtract to the beauty of the image. An example in business would be the presentation of the bill at dinner.

Scenario 1: You have a nice dinner and the waiter comes over and says, “Have a nice day, folks,” and throws the bill onto the center of the table.

Scenario 2: You have a nice dinner and the waiter comes over and sincerely expresses his gratitude for dining here tonight. He gently places the bill on the table and thanks you one more time before leaving.

Both scenarios are presenting the same information (the cost of the dinner) but are framed in two entirely different ways.

Use for your business:

If you have a pivotal moment with your customers, you may want to look at the lead-up to that moment. How can you change the frame for them to view the information you’re providing in a better light?

This can be done through physical means, such as getting a much nicer folder to put the quote inside, but just as important is the presentation of that quote to the consumer. The way you present the information will help frame the importance and significance that it represents.

Which cognitive biases do you think could help sway your customer into seeing how great your brand truly is?