The Secret Strategies of Marketing: How Brands Use Cognitive Biases to Win Your Wallet
Cognitive biases refer to systematic patterns of deviation from norm or rationality in judgment, whereby inferences about other people, objects, or situations may be illogical. These biases are a natural part of human thinking and can significantly impact consumer behaviour. Brands and marketers have long been aware of these biases and have been using them to influence consumer behaviour through their marketing, advertising and persuasion efforts. Individuals need to understand how brands use these cognitive biases to make more informed decisions about the products and services they purchase. Additionally, this understanding can help individuals develop a more critical eye when evaluating advertisements, making them less susceptible to manipulation. Knowing how brands use cognitive biases can also benefit individuals working in marketing, as it can help them create more effective marketing campaigns.
Marketers, business owners, entrepreneurs, salespeople, and startup owners should also be aware of cognitive biases in marketing and advertising to create more effective campaigns. By understanding how to exploit these biases, they can create advertisements more likely to influence people’s behaviour. Knowing these biases can help them avoid common marketing mistakes, such as using language or imagery likely to turn off potential customers. By understanding the psychology behind consumer behaviour, they can create more effective marketing strategies, leading to increased sales and revenue. Additionally, being aware of cognitive biases can help these individuals create marketing campaigns that are more ethical and less manipulative.
01 Anchoring bias
Anchoring bias is a cognitive bias that occurs when an individual relies too heavily on the first piece of information they receive when making decisions. This initial information, known as the “anchor,” serves as a reference point and can influence the individual’s subsequent judgments and decisions.
To Read Further —
Anchoring Bias: How Brands Influence Your Decision?
Anchoring Bias, Example, Decision Making in Business
02 Availability Heuristic
The availability heuristic is a cognitive bias in which an individual estimates the likelihood of an event based on how easily examples of that event come to mind. This bias can lead to inaccurate judgments and decision-making, as people may not consider all relevant information or alternative perspectives.
To Read Further—
Marketing Mind Games: How Brands Use the Availability Heuristic to Persuade Consumers
03 Bandwagon Effect & Social Proof Bias
Bandwagon Effect is a form of groupthink. The bandwagon effect is a cognitive bias in which people do or believe something because they think many others do or believe the same. This can create a self-fulfilling prophecy, as more people adopt a belief or behaviour because they think it is popular, which in turn causes it to become even more popular.
To Read Further—
The Power of Peer Pressure: How Brands Leverage Bandwagon Effect to Drive Sales
04 Confirmation bias
Confirmation bias is a psychological phenomenon in which people tend to favour information that confirms their beliefs or hypotheses.
To Read Further —
How Brands Play on Our Beliefs: The Art of Confirmation Bias in Marketing
05 Framing effect
The art of presenting information, or “framing,” significantly influences how individuals perceive and act upon it. This phenomenon is particularly prominent in advertising and marketing, where companies often use different framing techniques to sway consumer behaviour. Negative or Positive framing is one such technique used by the brands. Positive framing emphasizes the advantages and benefits of a product, while negative framing draws attention to the risks and drawbacks. Positive framing can entice customers to lead a more positive lifestyle by highlighting the benefits of using the product or service. Meanwhile, negative framing leverages the concept of fear or urgency to drive sales.
To Read Further —
06 Gain vs Loss Framing
The art of presenting information, or “framing,” significantly influences how individuals perceive and act upon it. This phenomenon is particularly prominent in advertising and marketing, where companies often use different framing techniques to sway consumer behaviour. Gain vs Loss is one such framing technique where a problem or choice is presented or framed in terms of potential gains or losses. For example, presenting a situation as a potential gain (e.g. “you have the opportunity to earn an extra $100”) may elicit a more favourable response than presenting the same situation as a potential loss (e.g. “you could lose $100”). This effect can have a significant impact on decision-making, particularly when it comes to risk aversion and motivation.
To Read Further —
The Duality of Desire: How Brands Use Gain vs Loss Framing to Influence Customer Behavior
07 Decoy effect
The decoy effect, also known as the asymmetric dominance effect, is a cognitive bias where people’s preference for one option changes based on the presence of a third, less attractive option.
Brands use this effect in persuasion by presenting consumers with a decoy option that is less attractive than the desired option but more attractive than the least desired option. This causes consumers to perceive the desired option as more attractive in comparison and, therefore, more likely to choose it.
To Read Further —
The Decoy Effect: How Brands Manipulate Consumer Choices
08 Endowment effect
The endowment effect is a cognitive bias where people place a higher value on things they own or have an emotional connection to, compared to things they do not own. Brands can use this effect in their marketing and advertising by creating a sense of ownership or emotional connection with their products or brand.
To Know Further —
Unlocking the Secret to Consumer Loyalty: The Endowment Effect
09 Sunk Cost Fallacy Bias
The sunk cost fallacy is a cognitive bias that refers to the tendency for people to continue investing in a decision or action because they have already invested resources into it, even if the decision or action is no longer rational or beneficial. Brands can use this bias in their marketing and advertising by appealing to consumers’ tendencies to justify their past investments.
To Know Further —
The Sunk Cost Trap: How Brands Keep You Hooked
10 Contrast effect
Contrast effect bias refers to how people perceive things differently based on the context in which they are presented. Brands can use this bias in marketing and advertising by comparing their product or brand with a less favourable option to make it appear more appealing.
To Know Further —
Contrast Effect: How Brands Influence Consumer Choices
11 Choice Overload Bias
The choice overload bias refers to the phenomenon where people can become overwhelmed by too many options and, as a result, have a harder time deciding. Brands can use this bias in their marketing and advertising by limiting the options available to consumers. This can make it easier for people to decide and make a brand’s products or services seem more attractive by comparison.
To Know Further
Choice Overload Bias: The Paradox of Too Many Options
12 Peak-End Rule
The peak-end rule is a cognitive bias that refers to how people tend to remember the most intense or emotional moments of an experience and the final moments of the experience. Brands can use this bias in their marketing and advertising by creating memorable and emotional customer experiences and ensuring that the final touchpoints with customers are positive.
To Know Further —
Why The End Matters: Peak-End Rule for Business Success
13 Focusing illusion
The focusing illusion is a cognitive bias that refers to the tendency for people to overestimate the importance of an isolated piece of information when making decisions. Brands can use this bias in their marketing by highlighting certain features or aspects of a product while downplaying or ignoring others. This can make the product seem more attractive or valuable than it actually is.
To Know Further —
The Marketing Magic: How Brands Use Focusing Illusion To Persuade You
14 Halo Effect
The halo effect is a cognitive bias that refers to the tendency for people’s overall impression of a person or thing to be influenced by a single characteristic or trait. Brands can use this bias in their marketing and advertising by highlighting their product or company's positive attributes, which can create a positive overall impression.
People have a tendency to assume that someone attractive or successful in one area must also be good in other areas. In advertising, this can be used by using attractive models or celebrities to endorse a product or show a successful person using a product. For example, a company might use an Olympic athlete to endorse their sports drink because the athlete’s success in their sport will be attributed to their product use. A brand may use a celebrity or spokesperson with a positive reputation to promote its product. These things can create a halo effect, where the positive reputation of the spokesperson influences people’s overall impression of the product.
To Know Further —
The Power of Halo Effect: How Positive Associations Drive Brand Success
15 Zeigarnik Effect
The Zeigarnik effect is a cognitive bias that refers to the phenomenon where people tend to remember incomplete or interrupted tasks better than completed ones. Brands use this bias in their marketing and advertising by creating a sense of unfinished business or a sense of urgency that encourages people to take action.
To Know Further —
The Zeigarnik Effect: How Brands Keep You Interested and Coming Back
16 Recency Effect
The recency effect is a phenomenon in which people tend to remember and give more weight to information they have received more recently. Brands can use this in marketing, advertising and persuading customers by emphasizing the most recent and relevant information about their products or services, such as new features, promotions, or customer testimonials.
To Know Further —
Strike While the Iron is Hot: Recency Effect in Marketing
17 Averaging Heuristic
Research in social psychology has shown that we tend to integrate the traits we observe by averaging them when forming people’s judgments. This process is known as the “averaging heuristic” and is a mental shortcut that allows us to quickly and efficiently form impressions of others.
The averaging heuristic involves combining multiple traits or characteristics to form an overall impression of a person. For example, if we observe someone friendly, outgoing, and confident, we will likely form a positive overall impression of that person. Alternatively, if we observe someone rude, selfish, and dishonest, we will likely form an overall negative impression.
To Read Further —
Beyond First Impressions: How Brands Use Averaging Heuristic to Win Customers
18 The Foot-in-the-Door Technique
The foot-in-the-door technique is a persuasion strategy that involves making a small request initially and following up with a larger one later. The idea is that people are more likely to comply with a larger request if they have already agreed to a smaller one. This technique is based on the principle of consistency, which suggests that people tend to behave in ways consistent with their past actions and decisions.
To Read Further —
The Foot-in-the-Door Marketing Technique: How Brands Use it to Win Customers
19 Hyperbolic Discounting
Hyperbolic discounting refers to the phenomenon where people value receiving a reward in the near future more than the same reward in the distant future. Brands can use this in marketing, advertising, and persuading customers by creating a sense of urgency or limited-time offers to encourage immediate action.
To Know Further —
How hyperbolic discounting affects consumer behaviour and marketing strategies
20 Illusory Superiority
Illusory superiority is a cognitive bias that refers to people overestimating their abilities or performance relative to others. Brands can use this in marketing, advertising and persuading customers by positioning their products or services as superior to their competitors.
To Know Further —
The Art of Deception: How Brands Use Illusory Superiority to Sell the Dream
21 The Horns Effect
The Horns Effect is a cognitive bias in which a single negative trait or experience negatively influences a person’s overall impression of someone or something. For example, suppose a person has a bad experience with a customer service representative. In that case, they may view the entire company negatively, even if their experience with other aspects of the company has been positive.
To Read Further —
The Horns Effect: How Brands Shape Perception
22 Reciprocity Bias
Reciprocity bias is a psychological phenomenon in which people feel a sense of obligation to return a favour or act of kindness that has been done to them. In the context of marketing, brands leverage this bias by offering free samples, gifts with purchase, or other forms of generosity that create a sense of indebtedness in customers.
To Read Further —
The Power of Giving: How Brands Use Reciprocity Bias to Win Over Customers
Stay Tuned! We’ve got exciting updates coming your way on biases! Over the next few weeks, we’ll add new content to this page to explore the many cognitive biases that brand leverage to persuade customers. We’ll dive deep into each bias mentioned below and provide insights and perspectives to expand your understanding of the human mind.
23 In-Group Bias
24 Negativity Bias
25 Illusion Of Control
26 Authority Bias
27 Liking Bias
28 Fundamental Attribution Error
29 Consistency Bias
30 Outcome Bias
31 Inductive Thinking Bias
32 The Winner’s Curse
33 Survivorship Bias
34 Conjunction Fallacy
35 Action Bias
36 Association Bias
37 The Forer Effect
38 Volunteer's Folly
39 The Affect Heuristic
40 The Sleeper Effect
41 Black Swan
42 Forecast Illusion
43 The House Money Effect
44 Dunning-Kruger Effect
45 The Lag Effect
46 Primacy Effect
47 Priming
48 The Spacing Effect
49 Salience Bias
50 The Pygmalion Effect
51 Serendipity Bias
52 Story Bias
53 Social Identity Bias