We are all different, that is a fact. What is even more interesting is that all of us have some form of cognitive biases. These are basically faults in the way we see or perceive environments and situations. Our background, upbringing, and experiences all lead to cognitive biases. We all have them to one degree or another. While we wish and often believe that we are logical and objective, we are all influenced by cognitive bias.
It is basically a coping mechanism as the brain has to filter and process vast amounts of information all the time. These biases “simplify” this process and speed it up but can lead to incorrect or invalid perceptions.
The sad reality is that most of us are not as logical or objective as we imagine or wish to be. Cognitive bias is a powerful force that affects the vast majority of people. Marketers have studied this and use it to their advantage. They make use of these biases to manipulate and influence us to their benefit.
Marketing is part art and part science. While many people consider it to be a simple basic practice, there is a lot of heavy psychological theory that is used to improve the effectiveness of marketing. Using cognitive bias is one of the marketer’s best tools when used correctly.
What is cognitive bias?
To further explain cognitive bias it is important to realize that no one can think completely rationally and logically at all times. As life and the world we live in has become more complex and we are constantly bombarded by a multitude of messages and new information all the time, the brain will make assumptions and generalizations based on past experience, emotion, and instinct.
Some people are better at reasoning and logical thought than others but few if anyone is completely immune to cognitive bias. We often do not have all the facts to process the information correctly and our natural cognitive biases allow us to make evaluations, assumptions, and decisions. These are not always correct.
Types of cognitive bias
In order to better understand cognitive bias and look at how marketers can take advantage of it, it is necessary to look at a number of examples. There are literally hundreds but here are some of the most common and better understood:
This is characterized by focusing on one piece of information while often excluding others. It could be because it is the most recent information received or you have a trust or emotional bond to the person presenting the message or the way in which it was delivered.
This is a popular technique used by salespeople and marketers to anchor a specific brand in your product so that you naturally tend to exclude.
Loss aversion bias
This is one of the oldest techniques marketers have used to give consumers the feeling that they are missing out by not owning this product. A classic modern example of this is FOMO or the fear of missing out. This causes many to believe they will suffer a great loss if they miss a new movie, a concert, the latest smartphone or a range of other items marketed at them and their peers.
The use of cognitive bias in marketing is something that has been extensively studied and the practice has been improved over many years of research and experience. Often, multiple techniques are used simultaneously.
The zero-risk bias, as the name suggests, is a purchase or decision where there is little to no perceived risk. While this is not always reality, marketers will go to great lengths to assure you otherwise. It complements the loss aversion bias perfectly.
“Scientific” research, free trials and money back guarantees are examples of marketers using this bias to drive sales. The lower the perceived risk the more likely we will be to try something. Although these techniques are useful to marketers for a range of products or services, it is becoming more important with dramatic new innovations. A lower risk will convince many people to adopt earlier which will trigger other advantages and biases that marketers can then use to boost sales even more.
This is certainly one of the most common examples of cognitive bias and affects many people, whether they realize it or not. It basically means that most people tend to have the same beliefs as the people they associate with and interact with the most.
Another example of this is people avoiding a queue at an ATM, supermarket or on the subway. If there is a short queue next to a longer one, many will assume, often incorrectly, that there is an issue with that queue so, therefore, avoid it. This is a sheep or herd mentality and is amazingly common. Look out for it you will notice it around you in many day to day situations.
It stems from the idea that the other people must be making the right decisions so we follow them despite not knowing or understanding the facts. Many people will believe that if all their peers drive a particular car or wear a certain watch, for example, that it must be a good product and therefore they desire it. A powerful marketing tool.
This is similar to the anchoring bias and refers to a situation in which people are convinced by the material they have available, even if it is one-sided and does not have all the facts. This is very common in politics where people focus on one point of view without listening to alternatives. It is also often seen with the current vaccination debate or some conspiracy theories. People latch onto one argument without investigating further and become convinced of a fact that might not be true.
Good marketers understand the importance of presentation. Most people perceive a well packaged or classy looking product is better quality or more desirable than one with less impressive packaging. This applies to the words used and brand name, not just the physical presentation.
The halo effect
This occurs when we observe another person’s skills or knowledge in a particular area and therefore assume they are intelligent in other subjects. Knowledge in one subject does not automatically suggest they will be skilled other subjects. The same bias can be applied to perceptions of companies or brands.
Once you have an idea in your head, many people actively look out for or notice information and evidence that “supports” their initial belief. This “proves” they are correct in their mind and reinforces the perception that may well be incorrect. Social media algorithms are amazing at simply reinforcing what you already believe to be fact. This is a common in important cognitive bias and can be very dangerous.
Many people can misinterpret data and information in order to make it fit their beliefs, even if it says the opposite.
The Dunning-Krueger Effect is when people with less competence and knowledge believe that they are more intelligent and knowledgeable than they are. They do not know enough to understand or appreciate their lack of knowledge. They have limited knowledge with a lack of balanced viewpoints causing them to believe in the little they do know.
Pro-innovation or anti-innovation bias
This is becoming particularly evident in modern times as many people desire an object purely because it is new and, in their opinion, innovative. On the other hand, you have more traditional people, often with strong religious beliefs that tend to shy away from and resist innovation.
A pro-innovation is what causes people to cue overnight for the latest version of windows, a new computer game or the latest iPhone.
Fundamental attribution error
Many people believe that the success of others is related to luck while their own victories are the result of their own skill, talent, and hard work. When they fail or have personal setbacks they blame that on bad luck.
Mood-congruent memory bias
This bias is a tendency displayed by some people in which they perceive or interpret memories according to their current mood. These people will reflect their mood, positive or negative onto these memories which will alter the reality or accuracy of the memory.
Many modern marketing techniques, particularly online, allow us to deliver messages when the targeted consumer is engaging in something they enjoy. This is likely more to lead to positive results. This is the main reason Super Bowl advertising is so expensive. While the viewership figures are great, the main point is that most people are having fun and enjoying themselves. All the better if their team wins.
Choices and interpretations are often made on the expected outcome of the situation. This can cause some to not evaluate all information as they are so focused on the outcome that they ignore potential problems that might occur.
As you can see, there many forms of cognitive bias that can affect various people in different ways. These are just some of the more prevalent forms and they will impact most people in one way or another.
As much as many of us believe we are logical and completely rational we are still normally affected by some form of cognitive bias in certain situations. Marketers are acutely aware of this and use these biases to influence options and buying decisions.
Just by reading the above, a brief understanding will probably give some significant clues how savvy marketers to could use these to make us look at a brand in a positive light or feel a burning desire to have a new product. Targeting is very specific and the marketers often know the best buttons to push in order to improve their efforts.
Using cognitive bias in marketing is not evil
What is also important to realize is that while these biases are used by marketers to influence opinions and improve sales, they are not dirty tricks. It is simply a part of marketing which involves playing on people’s emotions, beliefs and yes, biases in order to promote products and services. Many of these tactics are actually to the benefit of the consumer and lead to better quality, prices, research, and many other benefits.
It is easy to think of marketers as evil manipulators but they have a job to do and competitive markets give consumers many benefits.
Restaurants, hotels, subscription services, and other markets use pricing psychology extensively. This is also a form of cognitive bias and has become an important part of marketing strategy. There are many forms of this. Some restaurants have a very high priced item in each category. This makes other, still fairly expensive items to appear to be well-priced by comparison.
There are many other techniques used in pricing strategy and could form a whole study on their own.
The use of cognitive biases is an integral part of marketing. While it has always been prevalent, it has now been studied in more detail and marketers understand it better. Marketing is a multifaceted exercise that calls on a wide range of disciplines and studies to maximize returns. Using cognitive biases is simply one aspect of the entire process. It is, however, one of the most important and most effective.
If you are a marketer, it is important to understand the main biases that affect people and how you can use them to your advantage. This is no worse than having a great brand name or a good logo.
If you are consumer, as we all are, then it is handy to be aware of these techniques so that you can make a more logical and less emotional or influenced decision. Having said that, human nature is such that they cannot be avoided altogether.