As humans, we are not always rational when it comes to decision-making. We get influenced by so-called cognitive biases—or mental shortcuts—that help us process information quickly but can also lead to errors in our judgment. In the following, I will explain 10 cognitive biases brands can leverage.
By tapping into our cognitive biases, brands can influence consumer behaviour and increase sales. But they should always do this responsibly and genuinely.
Let’s dive right in.
1. Social proof
Humans tend to adapt to the behaviour of others, especially those who are similar to us or whom we perceive as credible.
Brands can take advantage of this dynamic by highlighting positive experiences from satisfied customers or showing how many others have already benefited from their offer.
A good example is Airbnb, which uses reviews from previous guests to give potential customers a sense of security and assurance before booking a stay.
2. Scarcity
Brands can harness our human tendency to place a higher value on rare or limited items by creating a sense of urgency around their products or services.
This can be achieved by offering limited-time deals, producing limited edition products, or emphasising the limited remaining stock of a popular item. These tactics can motivate consumers to purchase before the product runs out.
For instance, in 2020, Adidas released a limited-edition shoe collection in collaboration with a popular anime series. These shoes were only available for a short period, resulting in high demand from collectors and fans of the series.
But brands should be careful when employing scarcity tactics, as they can quickly become manipulative. The key is being honest and transparent about product availability. Don’t pressure customers into making a purchase they may regret.
By being upfront about scarcity and offering fair pricing, brands can build and uphold the trust and loyalty of their customers.
3. Halo effect
We often believe that people or things that do well in one area also shine in other areas, or vice versa, that those who do poorly in one domain also do worse in others.
Brands can take advantage of the halo effect by focusing on a positive aspect of their product or service, such as a high-quality design, which makes the product perceived as more valuable overall.
For example, a shampoo in well-designed packaging may be perceived as being of higher quality than a shampoo in poorly designed packaging, even though both may contain the same ingredients.
Want to learn more about the halo effect? See my previous blog post for five ideas on how to leverage the halo effect in branding.
4. Anchoring
People tend to trust the first information they learn about something when deciding. Brands can take advantage of the anchoring effect by presenting their product or service as the first option in a comparison, placing a more expensive product first as a reference point, or communicating their key benefit upfront.
Many software companies use the anchoring effect. They offer different price tiers and present the cheapest offer first, which makes the other options seem more attractive. Thus, customers tend to pick a more expensive option.
5. Reciprocity
People tend to feel obliged to return favours or kindnesses. By providing valuable resources such as free downloads, samples or trials, brands can create a sense of indebtedness in their customers.
Adobe and many other software companies offer free trials that allow customers to test the product before they buy it. Thus, the customer feels obliged to reciprocate this gesture and buy the product or at least engage more with the brand.
6. Authority bias
When people perceive individuals as credible or authoritative, they tend to trust those individuals regardless of whether their opinions are objectively correct.
Brands can leverage this tendency by engaging industry experts, thought leaders or celebrities to increase their own perceived authority and credibility.
An example is Colgate, which features dentists in its advertising and marketing efforts. By introducing experts, the perceived authority and credibility of the Colgate brand are enhanced, too.
7. Bandwagon effect
People tend to share opinions or behaviours just because they are popular.
Brands can take advantage of the bandwagon effect by creating a sense of exclusivity for their products or services and emphasising their popularity, especially among a specific social group.
An example is the Sephora Beauty Insider programme, which rewards loyal customers with exclusive benefits, such as early access to new products, gifts and invitations to VIP events. This way, Sephora taps into customers’ desire to be part of a community.
8. Confirmation bias
Confirmation bias describes how we take in, interpret and remember information in a way that confirms our existing beliefs.
Brands can take advantage of the confirmation bias by running ads that match our beliefs, reinforcing positive associations and thus increasing the likelihood of a purchase.
For example, if a person values sustainability, the brand might show them ads highlighting their eco-friendly practices, reinforcing the customer’s belief. There is nothing wrong with this as long as it remains honest and authentic.
9. Framing
The way information is presented or framed can influence our perception.
Brands can take advantage of the framing effect by presenting their products or services as a solution to a specific problem, triggering emotional responses in customers.
For instance, Dollar Shave Club, a men’s grooming brand, positioned itself as an answer to the problem of overpriced razor blades. By offering high-quality razor blades at an affordable price, the brand addresses the concerns and needs of its customers and creates a positive association with its product.
10. Loss aversion
Loss aversion describes our tendency to feel the pain of losing something more strongly than the pleasure of gaining something of equal value.
Brands can tap into this human tendency by offering a money-back guarantee or trial period to encourage customers to try new products or services free of risk.
Take, for example, my experience of buying an Ecosa mattress. The company offered a 180-day money-back guarantee. But if we are honest, how many people would make use of the policy, especially if they are satisfied with the product?
After six years, I still love my Ecosa. But I probably would not have bought it hadn’t they offered the trial.
When brands tap into these cognitive biases thoughtfully and responsibly, they can build trust and foster long-term relationships with their consumers.
By understanding how people think and feel, brands can create experiences that resonate with their customers on a deeper level and provide them with genuine value.
But, the key is to be transparent and candid about the brand’s marketing tactics. Brands should never deliberately manipulate consumers. This honesty, in turn, can improve the brand’s reputation and credibility with consumers who appreciate transparency and authenticity.
If you found this article interesting, you would also enjoy 25 Cognitive Biases That Explain the Irrational Behaviour of Consumers.
References
Title image by Kaboompics
