Well, here are a few ideas that may just make for an improved end of Q4, 2015 and start of Q1, 2016.
With Xmas fast approaching and the beginnings of an exciting new year not far around the corner, we thought our December blog should focus on how you can improve your marketing prowess and it’s no surprise that one of the most influential forces is the power of psychology.
In recent years, neuroscience has changed the way in which we view marketing, approach customers and run our businesses. A deeper understanding of the human brain will dramatically impact your marketing success.
One broad area of psychology deals with cognitive biases. A cognitive bias is “a type of error in thinking that occurs when people are processing and interpreting information in the world.”
Everyone is prone to exhibit cognitive biases. This is not due to lack of intelligence or awareness but simply because the brain is wired in surprising ways.
Here are four powerful cognitive biases that should definitely affect your marketing strategies:
Loss Aversion
Loss aversion is a bias that causes people to avoid loss more strongly than they pursue gain.
For example, taking £50 away from a person will prompt greater excitement than giving them £50. This bias and its corollary, the ‘status quo bias’ and ‘endowment effect’, cause us to prefer things we already own.
In marketing, you should present your product or service as something that could be lost if the customer doesn’t act. Causing them to feel a sense of loss will evoke a stronger response than offering something for them to gain!
Triggering this cognitive bias within your marketing collateral can turn casual browsers into zealous customers. Even using the ‘right’ language when in meetings or during presentations can make a huge difference to winning over a potential new client.
Anchoring
The anchoring bias causes people to rely on the first piece of information they see or hear about a product or service.
If you walk into a store and see a sweater for £100, then £100 is your anchor for that particular product. If you continue walking and see a similar sweater for £50, then your mind immediately makes a comparison, causing you to perceive it as inexpensive. Your decision is swayed by your focus on the first sweater’s price.
Anchoring impacts more than price perception, of course. A person whose mind is anchored on one point of information may be blind to more important points of consideration.
Someone in the market for a car may be focused on leather seats. This fixation anchors their mind to only observe the car’s interior, making them oblivious to issues such as the engine, the chassis and the fuel mileage.
An awareness of anchoring can allow you to implement techniques that will cater to this human bias. Marking down prices, setting quantity limits or focusing users’ attention on the primary consideration point in a purchase will affect how they buy.
Choice-Supportive Bias
All of us hold preferences that have little factual evidence to support them. We will defend a preferred flavour of ice cream, type of phone, favourite sports team, political ideology, superstitious hunch or worldview because we focus on its positives, not giving much consideration to its negatives.
We’ve made a decision to be a fan of, say, Arsenal FC. Therefore, we tend to discount a losing streak, poor performances or incompetent management. Instead, we praise style over substance, the manager’s acumen and the club’s history. This is a simple example of choice-supportive bias in action.
This bias affects marketing in the following ways:
- people tend to buy products and services with which they are familiar
- people tend to trust any piece of information that seems to support their choice
- people tend to forget any information that opposes a strongly held viewpoint
The choice-supportive bias works in your favour once you’ve gained some customers or clients. Using email marketing methods, you can reinforce the perception of your brand by sharing testimonials, evidencing your product or service superiority and reminding people why customers choose your Company.
Before a customer or client converts, however, you can trigger the choice-supportive bias. You do this by creating micro-conversions (an email opt-in or social media ‘like’) thus causing them to make a decision they will unconsciously defend.
When customers’ progress and decision-making are confirmed, they will move seamlessly down your marketing funnel.
Framing Effect
Framing is one of the most common cognitive biases used in marketing. Simply put, framing influences how people make a choice dependent upon the way it is presented, worded or framed.
The famous framing effect experiment by Kahneman and Tversky presented subjects with two choices:
Option 1: There is a 33% chance of saving 600 people but there’s a 66% chance of saving no one. Outcome: 200 lives will be saved!
Option 2: There is a 33% chance that no people will die. There is a 66% chance that everyone will die. Outcome: 400 people will die.
The two choices have similar outcomes but are framed in different ways - one positive and one negative. The vast majority of respondents selected the positively framed treatment.
Framing makes a difference.
Simple wording changes have a framing effect:
- Global Warming vs Climate Change
- Save 50% vs Half Off
- You Won! vs He Lost!
- Pro-choice vs Abortion
- 30% full vs 70% empty
- No military experience vs Extensive political experience
- 90% chance of survival vs 10% likelihood of death
The framing effect is widely used by politicians, salespeople, parents and everyone in between to shape the way that people respond to information. Facts are facts but the way you present those facts massively influences how people respond to them.
In marketing terms, loss framing can be used to present information that could trigger the customer or client’s loss aversion bias. Alternatively, you should present other facts in a gain framing format to influence a higher perception of your product or service. Statistical framing allows you to present a picture of your product as positive or negative, depending on the positive or negative terms you choose to highlight in the statistic.
A Game Changer says…
The above four examples are all extremely powerful cognitive biases that when implemented can transform your business marketing strategies and consequently have a positive affect on your productivity and sales output.
In summary:
‘Loss Aversion’ causes customers and clients to tenaciously cling to what they have.
‘Anchoring’ causes customers and clients to focus on the first information that they receive.
‘Choice-Supportive’ bias means customers and clients are comfortable with the familiar and blind to opposing evidence.
‘Framing’ influences the positive or negative perception of a product, service or fact.
Each of these cognitive biases are present in varying degrees in nearly every customer or client. Creating a psychological framework helps them make the best decision. You simply need to be aware of these biases and work with them.
With the new year and a ‘new start’ not too far away, perhaps it’s time to either revisit or implement the above within your marketing plans?
