Thinking: Cognitive Biases in Sales and Marketing
From Friday to Sunday 3-day traffic and conversion event Digital Elite Camp 2015. The event is organized by Dreamgrow and ConversionXL. My talk covered cognitive biases and mental heuristics that marketers can use to persuade people. Endowment effect, loss aversion, sunk cost fallacy and others help to make better converting landing pages. In the onboarding process you can use different mental techniques to get users stick with the program.
Here are the slides of the talk: Thinking: People are doing it wrong! How cognitive biases and mental heuristics help to sell more.
- Deeper understanding of human behavior
- Where and when we get the message has an effect on the result. Office, home, car, mobile, desktop…
- People don’t think!
- Anchoring Effect First bit of information establishes a range of possibilities. Everything that follows will be anchored by that opening information.
- Less-is-better effect
- Availability heuristic We overestimate the importance of information that is available to us. Running ads for winter tires when there’s a news about car crashes
- Endowment Effect You are less likely to give up something you own, than you would be willing to pay to get it.
- Using Endowment Effect • Scoring points • Provisionally awarded bonus • Need for consistency • Sunk cost fallacy • Loss aversion
- We aspire to round number goals
- IKEA effect Disproportionately high value on things that you partially assemble, such as IKEA furniture… … regardless of the quality of the end result.
- Just add water! Give people easy first steps to put in their own effort.
- Loss aversion
- Choice-supportive bias When you choose something, you tend to feel positive about it, even if the choice has flaws.
- Post-purchase rationalization People persuade themselves through rational argument that a purchase was a good value.
- Unit bias We believe that there is an optimal unit size
- Small site, no data? Important to understand what makes users tick. Talk with them, involve them in the process.
- Teaching and using statistics did not develope an intuitive sense of the reliability of statistical results in small samples. Our judgments were biased… – Daniel Kahneman
- Confirmation bias We search, interpret, and recall information in a way that confirms our beliefs and hypotheses.
- Observer- expectancy effect When a researcher expects a given result and therefore unconsciously manipulates an experiment or misinterprets data in order to find it
- Hyperbolic discounting People want an immediate payoff rather than a larger gain later.
- The Current Moment Bias Some of us would rather experience pleasure now, while leaving the pain for later.
- Bias blind spots We see cognitive biases more in others than in ourselves.
- Cognitive biases and mental heuristics: 92 Decision-making, belief, and behavioral biases + 26 Social biases + 51 Memory errors and biases en.wikipedia.org/wiki/List_of_cognitive_biases and en.wikipedia.org/wiki/List_of_memory_biases
Homework assignment: Go to Wikipedia list, pick one every day and find ways to use it in your marketing.