9 Cognitive Biases for Superior Marketing (8 min read)
How effective is your marketing? Did you know that you can always make it better? We want to show you some marketing psychology tricks used in businesses to boost sales and increase your chances for success.
These are only some of strategies that may make you really successful with your business. Increasing sales by hundreds percent or attracting tens time more customers is what you can do with these methods.
1. Loss Aversion
Loss Aversion is when people prefer to avoid losses more than earning the same profits. Sounds tricky? This is how it works.
People are just more willing to avoid a loss than to take risks and gain. Simply put, it’s better not to lose $20, than to find $20. We don't like uncertainty when it concerns losing something.
Using such cognitive bias in marketing as Loss aversion is not only useful, but also necessary. Focus on what they can lose if they don't choose your offer. Wordstream compared two of their own search ads. One was positive with the line, “Get the most out of your ads.” The other was negative, reading, “Stop wasting money in AdWords”. It was giving the consumer the negative impression that they’ve been wasting their money. The negative ad received 62% more clicks and pulled 18.8% more conversions.
People feel the need to pay back when they receive something. Whenever somebody get something they will probably want to pay back with what they have.
Reciprocity is just another marketing psychology principle, but this one is just about returning favours, and using such cognitive bias in marketing works really well! For example, delighters are a good way to apply reciprocity in your business. Delighters are small gifts, souvenirs, and other stuff you can offer your customers/visitors.
Delighters should generate more profits than costs for your business. Provide
- free samples,
- free complementary products (of a lower value),
- unexpected coupon codes,
- thank you letters.
Because people won't expect them they will have a great, positive impact on customers' experience.
3. FOMO (Fear of Missing Out)
The belief that others might be having fun while the person is not present. It is when you want to stay connected with the newest information.
Nobody likes to be left behind. The world is fast and everybody wants to keep up the pace. By being absent, one can also miss some important knowledge, which may be useful in the future. People prefer to "know things".Millennials are especially prone to such marketing psychology effect as FOMO. 60% of millennial consumers will impulsively buy an item, within 24h, after experiencing FOMO. The most prominent FOMO cognitive bias in marketing contributors are social media, such as Facebook (72%), Instagram (14%), or Twitter (11%).
4. Endowment Effect
People value something more if they feel it belongs to them. It refers to our emotions when we value an already owned object. We usually find it more valuable than it actually is, depending on our emotional states.
A good way to implement this cognitive bias in your marketing is offering free trials and freemium versions of some products. You want to offer enough that users experience the best of what it has to offer but hold back enough to make serious users want to upgrade their package.
Ikea Place is an app by Ikea that uses the Endowment Effect. It's based on the augmented reality. Consumers can perfectly visualise what the furniture will look like.
5. Social Proof
Social proof is when people adapt their behavior according to what other people are doing.
92% of people trust recommendations from people they know and pay 2X more attention to recommendations from friends.
Social proof as a marketing psychology effect is basically about reviews, opinions and mutual sharing. Building your audience is the key factor in achieving the best results for your business.
Building in public and sharing your results can be an amazing strategy.
When people see that you're getting sales and your numbers grow, they might want to join you. One graphic designer has earned $280k in one month with his iPhone icons project, thanks to that strategy.
6. Fresh Start Effect
New beginnings encourage people to pursue their goals. This can be a new week, month, year, national holidays, anniversaries, and birthdays. “New year, new you!” say various slogans. You can take advantage of this effect to persuade your customers to buy more.
Whether it's a cliché or not, people want to change at the beginning of every year. This is the best time for gyms, gym supplements, activity clubs, etc. The same applies to moving to a new place, expecting a baby, getting married, and many other life situations.
Allstate’s content marketing strategy is a great example of this. They have a whole section of blog posts and resources related to life’s big milestones.
7. Labour Illusion
Customers value more products or services and can be more tolerable when they can see the work behind them. It increases the company’s transparency and reliability. For example, Starbucks requires baristas to steam milk for each drink individually. This process increases wait time, but it also allows customers to see what’s going on.
Subway uses this cognitive bias in their marketing strategy. Their workers prepare sandwiches (Subs) in front of the customers who order them. This way, you can be sure that you get (and eat) what you really want.
8. Charm Pricing
People unconsciously prefer pricing that ends in "9" and "99". This is because such prices “look” as much lower than those ending with zeros.
Charm pricing is probably the most used cognitive bias in marketing, that you see daily, EVERYWHERE.
For example, $299 looks much more like “$200” because our brain acts fast and hooks into the first digit from the whole number. In fact, the price is actually $300, but our brains “reject” the simple calculation of adding $1.
According to CBC Radio, in 2014, over 60% of all products were priced like that. Gumroad has confirmed charm pricing to be working, too.
9. Authority Bias
People have the tendency to attribute greater accuracy to the opinion of an authority figure and be influenced by that opinion. The term authority figure includes teachers, politicians, police officers, bosses, influencers, etc.
Celebrity-endorsed commercials are perfect examples of this cognitive bias in marketing. This also has cons. Influencers may express their controversial opinions about things they don't have much knowledge about. That’s why you should be cautious with this one.
A person with an amazing body telling you about a new supplement or a person in an expensive suit telling you about his new MLM – sounds quite familiar, don't you think?
Become the ace of marketing
As you can see from the article, the psychological mechanisms controlling our behaviour can be powerful tools in the right hands. Of course, there are many more strategies worth learning. They are all pretty useful and most can take your sales ratings flying really high.
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In the first email:
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- cheatsheet (PDF) of 10 biases in marketing used by top 2% companies
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