Cognitive Biases in marketing; Marketing techniques have evolved a lot in the modern era. What was once limited to the traditional idea of advertising and selling branded products is now focused on creating product awareness in the consumer’s mind.
The techniques seek to influence potential customers who are more likely to buy. This segmentation can be done in different ways. One of the most common techniques used is the use of cognitive biases. Want to know what cognitive biases are and how to use them?
What are cognitive biases?
Therefore, a cognitive bias is a systematic error in people’s thinking. This happens when they process and interpret information from the surrounding environment and influence the moment to take action and make decisions.
Sure, the human brain is mighty, but that doesn’t mean it doesn’t have limitations. For example, cognitive biases are the result of the brain’s attempt to simplify information processing. As a result, they tend to function as general rules that help you understand the world and make decisions quickly.
On the one hand, some of these cognitive biases are related to memory. The way a person remembers a situation can be biased for several reasons, and this bias will make us think tangible things and make decisions subjectively.
On the other hand, they can also occur due to attention issues. Since attention is a limited resource, we are often selective in determining what we pay attention to in the world around us.
Prejudices are usually subtle. They can infiltrate without us noticing and directly influence the way we see and analyze the world.
How it influence the mind
We all have mental biases. It’s usually easier for us to detect them in others, but it’s essential to know that it happens to all of us. Among other things, cognitive biases:
- Affect when making decisions
- They limit our ability to solve problems.
- They hamper career success
- Impair the reliability of memories
- They challenge our way of reacting to crises
- Increase anxiety and depression
- They affect personal relationships
Here are some signs you may know some mental bias influences you:
- Attributing other people’s success to luck, but personal to your effort
- Finding that other people share your same opinions or beliefs
- Blaming external factors or situations when things don’t go the way we want or expect
- Pay attention only to the news that confirms our opinions
- Learning about a subject and assuming at this point that we already know everything there is to know about it.
In short, when we make decisions or judge situations of others or the world around us, those with cognitive biases tend to think they are objective, logical, and capable of assimilating and evaluating all the information they have. However, in many cases, these prejudices lead us to make wrong decisions.
What are the causes of cognitive biases?
Age or culture can determine the degree to which we experience some cognitive biases. Even so, these aspects cannot be directly attributed.
There is no single cause that allows us to determine the action of all cognitive biases. According to scientists, this is due to faulty intuitions or inadequate analytical reasoning.
This is attributed to the desire to confirm pre-existing beliefs to avoid psychological distress or the difficulty associated with quickly processing large amounts of information.
If we had to stop and analyze all possible options before making a decision, it would take us a long time to choose due to the world’s complexity around us and the amount of information we are exposed to. Therefore, the brain depends on mental shortcuts that allow us to act quickly.
Several factors can cause cognitive biases. These are mental shortcuts, known as heuristics, that play a critical role. While they can often be accurate, they can also lead to mistakes.
Other factors that can also cause bias are:
- individual motivations
- Limits on the mind’s ability to process information
- social pressure
- Cognitive bias may increase as we age, as cognitive flexibility decreases.
How to avoid it
The reality is that we cannot escape cognitive biases. The human brain seeks efficiency, which means that much of the reasoning we use to make decisions is based on near-automatic processing.
However, scientists believe that there are ways to improve recognition of situations in which our prejudices are most likely to operate, and thus take steps to recognize and correct them:
- Studying cognitive biases can help us recognize them in our own lives and act on them once we detect them.
- If we suspect that we are in a situation where bias is likely at work, we need to slow down decision-making and consider scaling up from credible sources.
- Bring together a group of experts with different points of view to help you consider perspectives you might otherwise miss
- To reduce the chances of falling into gender and race stereotypes and prejudices, select your sources well.
- Use checklists, algorithms, or other objective measures to help focus on important factors and reduce the chance of being influenced
Types of cognitive biases in marketing
Considering that these biases are inherent and can influence a consumer’s rational and reasoning ability, they must be regarded in marketing campaigns. Therefore, below we explain the most important ones:
Encouraging fear of possible loss is one of the most used tricks in marketing. If a brand can create the mental image that they are likely to lose something by not buying a product, it will achieve tremendous sales success. But, unfortunately, people are more willing to avoid a loss than to win. Some of the most used techniques are:
- Show stock level: If you show that there are few items in stock, undecided people may buy because they don’t run out.
- Choice of words that create urgency: “Sale ends in three hours,” “last available units,” and “limited stock” are some formulas.
- Offer discounts: If prices change over some time, we create the feeling of now or never.
- Other users are searching: this is when notice is given of how many users are interested in the same product.
Here is an example of availability level in the hotel search:
Support in decision making
Many consumers make illogical decisions and then present logical arguments to justify their purchase based on this bias. So, as a result, people are more likely to decide first and then explain it to those around them. In terms of marketing, if a product creates a feeling of desire in the consumer’s mind, he will buy it and justify his decision.
According to this effect, one of the most important factors when purchasing is disposal based on how the product is presented. For example, if the deficiency of a product shows as an advantage thanks to the use of puns, it is more likely to be successful.
In other words, it is how information about two different possibilities is presented and how they can influence the choice of one; or the other, even though both convey the same message or probability of becoming a reality. It must take the framing effect into account that the data must always be present positively. Here is an example:
Anchoring creates a brand memory in the minds of consumers. This results in the sale of the product. Sellers use this bias in stores to ensure that a product comes under more pressure.
In other words, it is about using the first information provided to us as a starting point for the rest of our decision-making. This first piece of information anchors us to report a price or a product characteristic. From here, it becomes the basis for the rest of the judgments we make.
Companies use it to guide our decisions. A classic example is telemarketing. They first present the product and post a price that serves as an anchor. Let’s imagine that a television costs 500 euros. During the ad, they will decrease this amount until they reach 200. What do you think is most reasonable?
Cognitive Biases in marketing
According to this bias, new information processed by the human mind confirms pre-existing beliefs. As a result, human beings tend to cling tightly to their ideas and seek confirmation from others.
It distorts our perception of reality and ensures that we selectively internalize concepts, matching our beliefs. To use this cognitive bias in marketing, you must:
- Capitalize on clichés
- Appeal to customer issues
- Offer positive experiences
- Take care of your current customers
- Question your hypotheses
It is a cognitive bias used especially by consumer products companies and political organizations. According to theory, a consumer is more likely to buy a product than others because this creates the illusion that it is functional.
An excellent way to take advantage of this effect is to create ad content that focuses on high sales and popularity graphs. This attracts new customers and increases sales.
An example of this bias occurs when there are elections. People are more likely to vote for the candidate they think is winning. We also see this in fashion, when many people start to wear a particular clothing style when others wear it.
They are also called relevance attribution bias. It originates from the human tendency to buy products that stand out from the rest. Marketers take advantage of this trend by providing attractive packaging or branding for their products. If a product has a unique packaging or label, it is likely to stand out in the consumer’s mind.
On the other hand, it is more likely to purchase if it also has features that differentiate it from competitors. Marketers use words such as special to take advantage of this bias and drive product sales. Apple is an expert in this area:
Cognitive Biases in marketing
Members of a group tend to favor, benefit, or better value the members of their group. In other words, they prefer to benefit those in their group than others.
An example is in football. First, fans identify with their team, then create a category that includes fans from their squad, excluding fans from other teams.
If my team is from Barcelona, we will have disagreements with other fans, mainly if we think they have a high chance of winning.
Belonging to a group is a social need that encompasses two of the primary needs of people: to have self-esteem and the perception of our social identity. Therefore, making a user feel that they are part of a community is essential for brands.
Done right, loyal customers will consciously spend less and tell other users about your business, product, or service. An example of how to increase visibility by offering group packages:
Zero risk bias
Zero risk bias is a cognitive bias in which people feel better if a risk is eliminated rather than reduced.
An excellent way to use this bias is to minimize the risk perceived along the sales funnel, highlighting all the benefits that the brand brings, even small and previously a chance.
Effect of mere exposure
Finally, the most relevant cognitive bias is the mere exposure effect. As a result, this is a psychological phenomenon in which people prefer objects or people they are more familiar with than others. Constant touch will lead to a greater level of familiarity.
For example, when you see your favorite athlete drinking a soda, you won’t be in a hurry to buy it. However, the next time you make a purchase, you might consider trying that soda. When hundreds of thousands of people around the world do the same, advertising becomes profitable.
For this reason, meaningless but fun ads, such as the well-known “Redbull gives you wings,” work wonders. They don’t explain the product but register that brand in your brain.