Cognitive biases are errors in the way we perceive our environments and make judgements. And as they affect nearly all of us, marketers are able to capitalise on them.
Marketing techniques have evolved greatly in the modern era. Marketing is no longer limited to just the idea of advertising and branding products. It is about creating awareness about products in the mind of the consumer such that a particular product can resonate better.
Marketing activities nowadays are much more targeted and look to influence the potential customers which are more likely to buy the product. This customer targeting can be done using a number of different ways. One of the most common techniques used for this is the use of cognitive biases.
These biases exist in humans inherently and they can influence a consumer's rational and his or her reasoning ability. For instance, an old adage in marketing strategy is that the more a product is visible, the higher is its ability to generate sales. So let’s have a look at the cognitive biases that will make your marketing strategy more effective:
1. Loss aversion
Creating a fallacy of a potential loss of something is one of the oldest tricks of marketing. The loss aversion bias is responsible for this technique being so popular. If a brand manages to create an image in the mind of the consumers that by not buying a particular product, they are likely to lose out on something, it can successfully manage to achieve higher sales of its products. People are more willing to avoid a loss as compared to gaining a similar amount.
2. Choice supportive bias
Humans are more likely to make a choice and then justify it to their near and dear ones. According to this bias, consumers often make illogical choices and then later on make logical arguments in order to justify their purchase. In terms of marketing, if a product manages to create a desirability factor in the mind of the consumer, they will buy it and then later on justify their decision.
3. Framing effect
According to the framing effect, consumers are more likely to make a purchase based on the way a product is presented. For instance, if a shortcoming of a product is presented as a beneficial feature by making use of wordplay, it becomes more likely to be a success. Framing bias is widely used in the world of marketing.
According to the anchoring bias, a consumer is likely to purchase a product that was presented to him or her as the first piece of information. Anchoring creates a brand recall in the mind of the consumers which results in the specified product being sold. Anchoring bias can be used by salespersons in stores to ensure that a particular product is pushed harder.
5. Confirmation bias
Confirmation Bias is another common form of cognitive biases. According to this bias, the new information processed by the human mind confirms the pre-existing beliefs. Humans tend to hold on to their beliefs strongly and look for confirmation of such beliefs. For instance, if a brand can create a situation where it can affirm the belief of the consumer pertaining to certain ingredients of the product, it is more likely to be a success in the market.
6. Bandwagon effect
The bandwagon effect is a cognitive bias which is well exploited by consumer goods companies as well as political organisations. According to the principle, a consumer is more likely to purchase a product that is being purchased by others. This is because it can create an illusion of being useful. A good way for marketers to exploit this effect is by creating advertising content that is focused on high sales already achieved by the product as well as popularity graphs. This attracts new consumers and helps in achieving higher sales.
This bias originates from the human tendency to buy products which stand out from the others. Marketers can make use of this bias by providing attractive packaging or branding to their products. If a product has a packaging or a label that is completely unique then it id likely to stand out in the minds of the consumer. Additionally, if a product has a unique feature which separates it from the rest, it is more likely to be purchased. Marketers can make use of words such as “exclusive” in order to exploit this bias and boost the sales of their products.
8. In-group favouritism
Consumers look to buy products which are preferred by their group or their circle. For instance, if a product is chosen by the close friends of an individual, they are more likely to go for it, rather than following a person out of their group. In order to exploit this, marketers can promote products based on groups or regions. They can create an illusion that a particular product is favoured by the people of a particular region. This way, new consumers from the area will be attracted to the product, resulting in better sales and potentially more profits.
9. Zero-risk bias
According to the zero risk bias, a consumer is more likely to purchase a product if they feel it is low on risk, even if this is not entirely true. For example, if a brand can create the illusion of durability regarding a product, the consumers are more likely to buy it. This holds true especially in the case of electrical equipment which can have certain inherent risks in operation. If the consumer is convinced that there is zero risk, it helps in driving sales.
10. Mere exposure effect
As the name suggests, mere exposure to a product can help in swaying the purchase decision of the consumers. If a product has high in-store visibility, a consumer is more likely to believe that the product is a popular one, hence creating a trigger for a purchase decision. Such a bias is commonly exploited by the consumer goods industry. Store shelves are packed with goods that have better margins so that the consumer goes for that particular product, resulting in better sales.