25 Cognitive Biases Marketers Can Use to Their Advantage

Human psychology is one of the most important factors that influence business and marketing yet it is rarely studied in business school or discussed by marketing professionals. It’s likely pushed aside because professors and marketing managers are as guilty of cognitive biases as anyone else.

In the age of digital marketing, you may feel numb to advertisements on the sites you frequently visit or sponsored posts on your social media accounts. It might surprise you how impactful the continued exposure can actually be. These advertisers are exploiting the “Mere Exposure Effect” which is when people express a fondness for things simply because they are familiar with them.

In this visual from GetVoIP you will learn about 25 cognitive biases and how they are leveraged in business and marketing:

Cognitive Biases and how they are leveraged in business

Psychological Hacks for Marketers Recap

Over the past nine weeks, we have featured a new psychological principle that marketers can use to improve their sales.

These principles are shortcuts that the human brain uses to make decisions, sometimes for better but not always. Most of them happen without us ever knowing. And when marketers know the tactics at their disposal to take advantage of these shortcuts, it can really help the bottom line.

In case you missed them, here are all nine parts to the Psychological Hacks for Marketers:

Stay tuned next week for a brand new series.

Psychological Hacks for Marketers – Part 9

Welcome to the latest installation of our weekly blog series – Psychological Hacks for Marketers. Each week we will introduce a new shortcut that the consumer’s brand takes and how the crafty marketer can take advantage. Last week’s topic was Outcome Bias.

This week we are discussing:

Bandwagon Effect

The bandwagon effect in marketing is the increase in likelihood of purchase based on the number of other people who have already purchased (or their desire to purchase) the same item.

In its simplest form, it’s the “cool factor” – the tendency for consumers to want something because other people want it. It explains the trends and the fads, most popular colors and styles, the products that sell out on day 1.

But the bandwagon effect can also be seen in more basic forms of social proof. For example, this effect can help explain why companies show off testimonials and reviews and ratings on their sites. Other consumers are validating the claims that marketers make.

Take advantage of the bandwagon effect by:

  • If you have a high number of customers or products sold, show a running tally, like the old “Billions and billions sold” campaign by McDonald’s. It’s an indication of popularity.
     
  • If you sell physical products, under-supply the market so that your items sell out. Offer pre-orders and allow people to sign up for updates when something sold out becomes available again to create the feeling that something is in high demand.
     
  • When something is in limited supply, tell your consumers they have to act fast or miss out. Again, this makes your offering look popular and in demand.
     
  • Allow and display user reviews like Amazon and Yelp. Lots of reviews mean lots of other customers chose you over your competitors.

If you can use your marketing to show potential customers how popular your products are, you’ll sell more of them.

Stay tuned next week for another installment of the Psychology Hacks series. Have a suggestion? Let us know.

Psychological Hacks for Marketers – Part 8

Welcome to the latest installation of our weekly blog series – Psychological Hacks for Marketers. Each week we will introduce a new shortcut that the consumer’s brand takes and how the crafty marketer can take advantage. Last week’s topic was Authority.

This week we are discussing:

Outcome Bias

Outcome bias is a bit more complex than other cognitive biases that we have discussed in this series. Outcome bias does not come into play at the moment of a decision, but afterward. It is defined as the tendency to view a decision made in the past based on the outcome, instead of on the actual decision process itself.

A common example has to do with gambling. If you bet $500 at a casino and end up winning $500, it’s easy to think that the decision to gamble was a good one. If you bet that same $500 and lose it all, we might then think the decision to gamble was a bad one.

The decision was the same. The outcome decided how we judged the decision.

For marketers looking to use the outcome bias to their advantage, it’s not so complicated. Just focus on outcomes:

  • Use of customer success stories that feature real people who have experienced positive outcomes from your product or service helps to convince prospective customers that the decision to buy from you is a good one.

  • Showcase benefits from using your product rather than the product itself, allowing prospects to “see” what their life would be like with your product.
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  • Use of limited-time trials take advantage of outcome bias by giving someone a positive experience with your product before asking them to pay for it. They judge the decision then on the “outcomes” they’ve already seen.

Smart marketers can use outcome bias to overcome that final hurdle in the decision making process of their customers.

Stay tuned next week for another installment of the Psychology Hacks series. Have a suggestion? Let us know.

Psychological Hacks for Marketers – Part 7

Welcome to the latest installation of our weekly blog series – Psychological Hacks for Marketers. Each week we will introduce a new shortcut that the consumer’s brand takes and how the crafty marketer can take advantage. Last week’s topic was Reciprocity.

This week we are discussing:

Authority

The authority principle is a simple one to explain. People are more likely to trust you if it is immediately apparent to them that you have some authority in the area you are talking about, some credibility.

People trust experts. They don’t trust marketers. They don’t trust companies.

So marketers and companies would be wise to use authority to provide basis for their claims. Using authority can help convince customers that they can trust you.

Here are a few ways companies are using authority in their marketing:

  • Use of a celebrity spokesperson adds credibility, especially when there is some alignment between what the brand offers and the celebrity. For example, fashion brands use stars from Hollywood and social media influencers to showcase their products to consumers. If they wear it, that means its cool.
     
  • Similar to the concept above, the use of industry experts who speak on behalf of your company can also help add credibility to your claims. For example, most ads for medicines or nutritional products feature doctors.
     
  • Some companies simply choose to make up an authority. Flo, from Progressive, is an example of a fictional character who is used for this purpose. She represents the brand, but to many she is simply a real person who knows the deal and likes to help us out.
     
  • Word of mouth, reviews and ratings are also a form of authority marketing. It’s been reported time and again, that consumers trust other consumers’ recommendations. And so when you invest in word of mouth marketing, you are making your existing customers the authority.

Smart companies will recognize that in order to earn prospective customers’ trusts, they should employ some form of authority marketing.

Stay tuned next week for another installment of the Psychology Hacks series. Have a suggestion? Let us know.