Cognitive biases are those little tricks our mind plays on us. Now, our mind is capable of some very powerful processing work. Despite this, it is prone to making bizarre assumptions and jumping to conclusions every now and then. They are so built into the fabric of our thought, that they seem very normal and don’t even realize when they take over. We can’t fight them. Like it or not, these biases are a part of us. Developed due to a variety of factors that influence us.
But, did you know that you can leverage these cognitive biases to your advantage in marketing your small and medium business? You don’t have to be a victim of these biases, but can get them to work for you. Curated from the best on the web, listed below are 9 such cognitive biases that may help you understand why people make the choices they do. I have tried to summarize a marketing takeaway for each.
- The “We Just Cannot Lose” Effect
As human beings we hate losing. And when faced with a situation of losing, we put in the extra energy and crave for it with all our heart. The possibility of losing something can very often change our preferences and our priorities.
Takeaway: when positioning your offer, make the prospect feel that turning it down will be a great loss for them. This, in itself, can create a compelling reason for them to accept your offer.
- The “Fear of Unknown” Effect
This effect causes people to avoid options with unknown results or those about which they lack information. Not knowing a particular outcome makes you stick with what you know – even if that does not really satisfy your needs.
Takeaway – you must ensure your prospects and buyers are clearly informed about what results they can expect. Move quickly to answer questions or fill in the gaps they might have.
- The “I like it as it is” Effect
When faced with change and status quo we are wired to choose the default option – status quo. Even if the change is better. And this is because change requires energy.
Takeaway: Don’t force change upon your prospect or buyers. Don’t overload them with decisions. For, when they are overwhelmed, they will stick to the tried and tested. Underline how easy your product or service is and how it does not require any (or too much) energy to make the shift. The lack of aggression will force them to look at your business with a new set of eyes.
- The “Anchoring” Effect
Even though we know that a book cannot be judged by its cover, for good or bad, the
first piece of information we receive about something tends to colour our perception. The initial details acts as an anchor to which everything else is compared.
Takeaway – always remember, you never get a second chance to make a first impression. Very carefully plan as to how you will introduce yourself and your product / service to your prospect. Make sure that the very first piece of information your prospect receives about you is positive and sets the expectation for the buying process. You can, very often, direct this anchoring effect by getting your prospect to see the right competing offer that clearly sets the comparative process in your favour.
- The “Law of Social Proof” Effect
Since the beginning of the human race, the majority of us have always wanted to conform to the group we belong to. Often, just so that the group as a whole functions well. The other reason is that in moments of uncertainty there is a natural tendency for others to serve as a cue as to how we should behave.
Takeaway – the law of social proof is a very powerful motivator. Present your product or service to your prospect in such a manner that they see the majority of those who matter in their decision process, use it. In moments’ of hesitation, showing your prospect that a large number of people have done business with you and are happy, may be reason enough for your prospect to join the bandwagon and go with you.
- The “Decoy” Effect
This was postulated by Dan Ariely, Professor of Psychology and Behavioural Economics at Duke University. Ariely stated that when confronted with making a decision between two choices, it is best to introduce a third option which forces the person to make a decision between the original two.
Takeaway – study the situation and always introduce a third “decoy” option so that your prospect, one that automatically reinforces their innate predisposition.
- The “Illusory Truth” Effect
Dr. Jeremy Dean, noted psychologist with University College London, states that “repetition is one of the easiest and most widespread methods of persuasion”. The more times a person hears a statement, the truer it becomes.
Takeaway – determine your core message and the deliver it over and over and over and over again. The prospect will then come to believe it.
- The “IKEA” Effect
The IKEA effect refers to the fact that people value things that they were highly involved in the creation of. Often, they value these more than superior products that could have been created by others. Small businesses can exploit this bias on the part of the prospect to market their products / services appropriately.
Takeaway – Get prospects involved in customizing or putting their unique spin on your product or service. The more they feel like the offering is “theirs,” the more positively they will feel towards it.
9. The “Serial Position” Effect
It is an established fact that, in a list, people are inclined to remember what they encounter first and last rather than what they see in the middle. Research has established that the memory high points are always at the beginning and end of a list.
Takeaway – if your prospect communication has a sequential listing of your product / service features, instead of organizing them in order of priority re-organize them to position the key elements in the beginning and end of the list.
These are the most common cognitive biases, that often work against you. By curating them here in our blog, I hope that you, as a small and medium business person, are able to turn them to working for you and help you in your marketing strategies. Now, go implement!!