6 Cognitive Biases Used In Marketing To Increase Sales

Human beings are not as rational as we think they might be. 

This is because of the common mistakes in reasoning that occur when one values perception or beliefs over reality, which can significantly influence decisions thanks to cognitive biases. The research has shown decades ago that even simple tweaks have a significant impact on choices consumers make and this still holds true today! Researchers have found that we all make mistakes in reasoning due to our own biases. For example, when the color of an item is changed just a little bit it can lead you to believe that they are more valuable because there's less supply or something like this. 

These types of simple tweaks influence choices and decisions thanks largely in part from cognitive biases which happen at times when people value perceptions over reality- often without even realizing it! 

The research has shown that even simple tweaks have a significant impact on choices consumers make and this still holds true today! Cognitive biases are the reason we believe that a product is better or more expensive than it actually is. They can also cause us to buy something because of its name, color, shape and other irrelevant information. 

This article explores six cognitive biases you should use in your marketing strategy for success!

#1. The Mere Exposure Effect

One crazy experiment conducted showed that just seeing something repeatedly can turn from hesitation into curiosity and friendship. 

With no explanation, Professor Charles Goetzinger had one student come to each meeting in a black bag with only their feet visible and then observed how his students reacted as time went on.

At first, they treated him like an outcast but soon enough curiosity turned to friendly chats as the students began getting used to seeing the blackbagged person over and over again.

The study conducted by Goetzinger is interesting because it shows that familiarity breeds content.

How To Use This Tactic To Increase Sales?

• Retargeting is a form of advertising where advertisers will target website visitors who have already visited their site. These types of ads are significantly more effective than traditional display advertisements because they're only being shown to people who've expressed interest in the product or service before and by visiting the company's website again, it shows that person has some level of curiosity about what you're selling. One study found that retargeted campaigns yielded 10 times higher CTRs (click through rates) for an ad compared to raw prospects with conversion rates 70% greater when displaying these ads on websites! Retargeting allows companies like yours to get past all those pesky "cold" leads sitting out there not knowing whether your products are worth checking into.
  

• Repurpose and distribute existing content. Creative ideas to repurpose your content is a great way for you to boost sales. A simple blog post can be turned into an infographic, video, podcast, slide presentation and so much more! This means that people see it in multiple places which increases the likelihood of them viewing or purchasing.
  

• The more we see something, the better it can perform on social media. You might be wondering how to get your posts seen by everyone in a way that will generate engagement and reach? Well we told you there is an easy hack for this called “the mere exposure effect” or resharing content already shared before. Research has shown that just 686% of people who saw an article would like it after being exposed again!

#2. Loss Aversion

Did you know that people prefer not to lose something they already have than to gain an equivalent value? 

In 1979, psychologists Daniel Kahneman and Amos Tversky found this phenomenon when looking at loss aversion. 

This means most people will find it more difficult if they were offered $10 but lost their current possession instead of gaining a new one. It turns out we are all hardwired for these types of things!

If you want to be successful in sales, remember that your prospects will go out of their way to avoid risking a loss. 

They'll do this by avoiding making any changes from the status quo and thus holding back progress for themselves as well as those around them.

How To Use This Tactic To Increase Sales?

• Studies show that when someone tries out something for themselves before committing, they are more likely to be committed because their ties go deeper than just a purchase agreement from afar. Give them this opportunity so you can cultivate lasting relationships! Offer free trials and samples of your product or service to give people the chance to fall in love with it. 
  

• If you give your customers the impression that they are getting an exclusive, high value offer for a short time period, then it encourages them to make their decision quickly and commit to making purchases now rather than later on. For example: if we’re only giving away 50 free T-shirts today then people will buy one before supplies run out even though they may not need another shirt at this moment in time but would have liked that same deal tomorrow or next week when there is no rush of other buyers also trying to get into the shop because all offers end tonight! A limited-time bonus. Offer a limited-time offer that’s only available for a short time to encourage consumers to buy now or they might not get it again.
  

• The countdown timer is the ultimate tool for turning a cold lead into an eager customer. When someone sees how many hours are left until they can't buy your product, it's hard not to want it anymore! It's the end of the day, and you're racing against time. You have a few minutes to make an offer on something before it goes away forever. Wouldn't that be stressful? That feeling is what countdown timers are for! Why not use one in your marketing campaign so people can see how fast they need to act if they want this amazing deal?

#3. The Compromise Effect

In a 1992 experiment, researchers gave participants the opportunity to choose between 35mm Minolta cameras. 

In the first test, participants were presented with two options: either $169.99 for a Maxxum 3000i or $239.99 for an X-370 camera; they split 50/50 on both models of cameras in this initial trial phase of testing (1). 

However when comparing these results against those from another round that offered what is considered by experts as a “compromise” option.

Which was priced at only slightly higher than the cheaper model but still very much affordable and would not have resulted in any buyer's remorse later down the road.

The study showed that 57% of the participants went for a middle ground option. The other two options were almost evenly split, with 22% selecting the lowest priced camera and 21% selecting the highest-priced one. 

Simply adding this sort of compromise can significantly increase sales as seen by these results!

How To Use This Tactic To Increase Sales?

• Options are an essential component of decision-making. In order to make the best possible choice, it is always important that there be a variety of options available for consideration. Keep in mind: some people might not like extreme choices and will never choose them; they may prefer more moderate options on either side so as to avoid extremes altogether which can sometimes lead to disappointment or regret later after choosing one option because you feel someone else would have been better suited for your needs/wants than what was chosen. There’s no perfect way when it comes down to deciding between two equally great items but taking into account all aspects before selecting something helps mitigate potential risks with any decisions made moving forward.
  

• Creative pricing is a great way to reel in the customers, but it has an extra benefit that may not be immediately clear. When you place your compromise option (or main product) in the middle of choices, it actually draws more attention than if they were on either side. This placement also tends to prompt people into considering this featured option first rather than other extreme options which are often less appealing and too expensive for many consumers looking for something affordable or cheaper altogether; saving them from what could have been a wasted purchase decision down the road!

#4. The Framing Effect

Psychologists Daniel Kahneman and Amos Tversky asked participants a question about an impending outbreak of an unnamed disease in the U.S.

Asking them to imagine that the US was preparing for 600 people to die due to outbreaks, but had two alternative programs which could save 200 or 400 lives respectively. 

They were then given estimates from scientists on each program's success rates: Program A would only be able to stop 100 deaths, whereas Program B has a one-third chance of saving all 600 peoples' lives if it is enacted properly.

So what do you think they chose?

With the options provided, 72% of participants chose Program A while 28% chosen Program B. 

However when different phrasing was used with nearly identical choices (Program C would save 200 lives at a cost of 400) 

Only 28% preferred to take on this riskier option compared to those who were faced with an alternative choice that had twice as many people dying from either program being adopted and less ambiguity in probable outcomes.

You have more power than you think when it comes to how your customers respond. 

Whether or not they accept the offer should depend on what is in their best interest, but if we're being honest that's rarely going to happen since people are often putting themselves first. 

So instead of wasting time figuring out all those complex human emotions, just focus on framing your product appropriately so it'll be accepted by most of them!

How To Use This Tactic To Increase Sales?

• People are more concerned about losing something they already have rather than acquiring a new thing. A 2009 study in the Journal of Economic Behavior & Organization found that when Ph.D students were told to register for an economics conference, more people registered as soon as possible instead of waiting and having their registration fee increased if they waited longer. In other words, framing your offer so it is clear not taking up on what you're offering will lose them out may encourage customers enough to take advantage before time runs out!
  

• Frame your offer in comparison to something similar and mention the value of what they will be getting. For example: "We have a new line of boots that are just as durable, but retail for $150 less." or "How does your offer compare to the likes of Tesla, Audi, or BMW? Find out! We pride ourselves on being less expensive than any other electric car with our price starting at $xx.xxxx. This is not a car- it's an investment in sustainable transportation for today and tomorrow. Join us now because we can't wait for you to drive one yourself! Do I have your attention yet?" It's all about the way you frame things that change a buyers perspective.

#5. The IKEA Effect

In a 2011 study, researchers observed consumers as they assembled IKEA boxes, folded origami, and built Lego pieces. 

They found that participants saw their “creations” similar in value to the more expertly crafted products of others. 

More interestingly though was what these individuals expected from other people – an expectation which proved true! 

The IKEA effect is when one values a product even if it's possible for them not to be interested at first because of its personal connection with oneself. 

The IKEA effect is a well-known phenomenon in the psychology world. 

When you involve your audience by making them more aware of their input, they are much less likely to reject it. In this way, marketing strategies can be significantly improved with just one small change.

How To Use This Tactic To Increase Sales?

• Involving consumers in the process of building your products is an excellent way to keep them engaged and excited about it. Consumers can be involved by committing time to product development, giving input or ideas during its creation, or improving their favorite brands with new features they may have been involved in! There is a trend in the tech industry of involving consumers, or customers who use and buy products from these companies. This can be done by committing time to product development, giving input into its creation process with feedback on improvement ideas for new features as well as complaints about current bugs that need fixing.
  

• Coca-Cola’s Share a Coke campaign is one of the most successful campaigns in history. When Coca-Cola launched this initiative and allowed users to have their own customized version of Coke, sales exploded. And the results were almost instant. Just within the first year, Coca Cola saw significant measurable success with increased revenue as well as a 9% increase in global market share according to Forbes. The implementation of customizable options resulted not only an uptick on social media platforms but can also boost customer engagement while providing potential customers with something that differs from competitors products thus generating more interest for your company.

#6. Peltzman Effect or Risk Compensation Theory

Professor Sam Peltzman, a brilliant scholar and thinker in the field of automotive safety research.

He found that when laws were introduced to regulate driving habits for the sake of ensuring drivers' safety- such as mandatory use of seatbelts or other devices designed with this goal – drivers would become emboldened once again. 

This was because they felt like their actions were no longer being regulated by law enforcement officials and government agencies; even if it meant taking risks while wearing these said devices.

The insights from this theory have been applied across industries - with great success in many cases.

Including things like increasing conversion rates through making transactions secure and easy-to-navigate websites where customers can avoid potential scams online as well as physical stores which offer lower prices but less personal attention due to automation.

How To Use This Tactic To Increase Sales?

• People are judged by their covers - so it's important to have a professional and well-designed website. A study of 2,000 consumers found that 32% pay attention to how good the site looks before deciding whether or not they trust it. Trustmarks can also help with this risk perception; 48% find sites safer when trusting marks are used and 23.65 percent feel more comfortable shopping on websites if they load quickly! If you want your visitors to convert, then reduce the perceived risk by having a high-quality design for your site.
  

• Contacting someone is a sign of trust. For 46% of people, not displaying contact details on your site makes you less trustworthy. Make it easy for prospects to reach out so they can feel confident in their decision and know that if any issues arise, there will be an option for contacting them!
  

• Offering a no-risk return policy is just one way to make it easy for customers to trust you. By giving them the opportunity of receiving their money back, they are more likely to buy from your business - decreasing risk on that end as well.

In Conclusion

One of the most important parts to setting up a marketing strategy is figuring out what cognitive biases you can use in your favor. 

If not, then it could be detrimental for success because they are so powerful and persuasive that if overused will backfire on them instead. 

So before applying any of these tactics make sure you consider your target audience and goals first- which ones would work best with their demographics?

 Then try those one at a time until finding the perfect match after all, there are always exceptions!