Cognitive Biases: Using Marketing Psychology on Your Site
How do your customers think? What do they really want? Marketing teams try to answer these questions every day, but is there a way to actually quantify human behavior when it comes to marketing? Of course you use imagination, creativity, and storytelling to target your customer, but let’s see what happens when we bring psychology in as well.
In the following case study, we will look at the buying process step by step and see how understanding cognitive biases can help shape your marketing efforts and bring your team better results.
But first, let’s clarify what we mean by marketing psychology and take a closer look at why it matters.
Marketing psychology: how your customer is influenced
Marketing psychology explores which factors affect customers’ attitudes toward products and services. How will the customer react based on how a product is presented? What action will they take? Your marketing team can use this to predict how customers will react and find ways to influence their behavior.
Since marketing psychology goes hand in hand with what drives consumer behavior, we can borrow insights from behavioral sciences such as neuroscience and cognitive science to better grasp how a consumer’s feelings and perceptions may influence their buying choices.
Why understanding ‘cognitive biases’ is a necessity
Do we make rational, well-thought-out decisions all day, every day? We’d like to think so, but our brains constantly receive a massive amount of input. In order to keep from becoming overwhelmed by all the potential decisions presented to us daily, our brains have developed shortcuts to help us make faster decisions. These shortcuts are called heuristics.
Take dish soap, for example. When you moved out on your own and you first bought dish soap, did you try each brand and type methodically until you found the one you liked the best? Chances are you simply bought the same type of dish soap you grew up with. Your brain trusts the brand it knows and it used a shortcut to choose it.
But heuristics can lead to errors in judgement – there may be a better dish soap for you but you’ll never know. This is a ‘cognitive bias’, and it describes an irrational tendency in your customer’s decision making process.
Understanding cognitive biases can help you understand how and why a consumer interacts with your brand – and help you tailor your marketing strategies more effectively.
The case study: a deep look into a giant European e-shop
Let’s look at a practical application of marketing psychology. This case study is based on one of the largest European electronics retailers. In 2019, they tripled their annual income – and they set the pace for regional competitors.
It’s safe to say their marketing strategies – based on consumer psychology – are working. Even though your business may not cater to the European market, there are some great insights here.
We’ll look at a version of their e-shop as well (made anonymous) to facilitate the demonstration.
The typical buying process
Let’s dive into the purchasing process of this successful e-shop: you are a customer looking to buy a new phone. Your buying process will break down into these five phases:
- Attention Phase (your first visit)
- Interest Phase (browsing the products)
- Consideration Phase (you consider your options)
- Decision Phase (you make your final decision)
- Action Phase (you pull the trigger and make the purchase)
Now, let’s look at each phase, and how this e-shop uses strategies informed by marketing psychology to guide you toward making that final purchase.
Attention Phase: a homepage strategy
So you’ve found yourself on our e-shop’s homepage, localized for your home country.
Image 1: Anonymized e-shop homepage (source: Exponea)
One of the first things to catch your eye are customer reviews in your native language. This fosters a subtle trust in you toward the site and its products. Marketers know this as ‘social proof’: our instincts drive us toward a positive view of something that is being lauded and approved by others.
This is the cognitive bias of social proof tendency – a tendency to think and act as those around us think and act.
Interest Phase: category page strategies
Now you’re browsing the category pages looking for offers. But what your eye is drawn to here is carefully calculated.
Image 2 – Anonymized e-shop category page (source: Exponea)
Let’s look at each eye-catching section and break down what they are really offering.
Hyperbolic discount example: ‘Night pick up’
You notice the banner in the top left corner of the screen offering night pick up availability. Here is another example of a cognitive bias – that of hyperbolic discounting. This bias proves our willingness to pay for immediacy rather than save money by waiting.
Put another way, would you rather have $200 now or $300 in a year? Most of us would choose the reward now rather than wait, even for a demonstrably better deal. Similarly, a chunk of your customer base will be willing to pay more for a faster delivery option.
To take advantage of this, you can set up delivery options specific to each region, as some marketing software companies offer services such as Web Layers to enable this capability.
The scarcity effect example: ‘Blockbusters of the week’
The best deals the e-shop has to offer, the temporarily discounted products, are front and center here. These discounts could be for the entire week or as short as a few hours. They have a sense of urgency about them that tells you to assign more value to them.
This demonstrates the cognitive bias of the Scarcity Effect: designed to make us place a higher value on something scarce, and a lower value on something commonly available.
Deals like these also foster a sense of FOMO – fear of missing out. Just as we don’t want to miss out on a social opportunity or being outside on a gorgeous day, the idea of missing out on a great, limited-time deal can be a powerful motivator to make a purchase.
Reciprocity – offering education and insights to your customers
Your eyes catch on those three boxes toward the bottom of the page – offers to help you make an informed choice, or simply help educate you in an area of their expertise.
Here, you’re offered:
- Reasons why you should shop with this particular retailer
- Tips on how to pick the best phone for your needs
- Helpful advice relating to your phone purchase
There is a holistic feel to it, as if you need look nowhere else for anything relating to your desired purchase. This subtly fosters a feeling of indebtedness, imbuing a sense of obligation toward the potential customer to make a purchase through this site.
This is the cognitive bias known as Reciprocation Tendency – wanting to return the favor when we are helped.
Consideration Phase: influencing the customer’s purchase
As you narrow down your phone choice, you continue to be nudged in certain directions on the category page(s). Let’s explore three tactics used here:
- The framing effect
- The center-stage effect
The framing effect – how categories are named and framed
After you’ve narrowed down your phone choices, the site helps you by categorizing the products into Traditional, People’s Choice, and Deluxe price ranges.
Image 3 – Anonymized e-shop product page (source: Exponea)
Marketing psychology has proven that you, the customer, will respond differently to a product depending on how it is framed. This is the framing effect – a cognitive bias where a customer will perceive a product choice as a value-gained or lost proposition, based on whether it is presented with positive or negative connotations.
On the example product page, you can see that the least expensive choices are framed as ‘Traditional’ rather than the negative-sounding ‘cheapest’.
Similarly, the most expensive products are not labeled so baldly, instead framed appealingly as ‘Deluxe’.
The center-stage effect: nudging customers toward the middle choice
There is another strategy behind offering three pricing categories. Most of us, when shopping for a new phone, want the highest quality device but within a limited budget. This drives us toward the framed category in the middle price range: ‘People’s Choice’.
The center-stage effect shows that customers, when presented with an array of choices, are most likely to believe the best deals are in the middle. Marketing teams can capitalize on this behavior by offering a center-oriented option labelled ‘Most Popular,’ for example.
Empowering customers to make a decision
You may have noticed that there are similar product options available in the middle price range. This strategy helps your customer feel more control over their buying process.
This is how you empower your customer; by letting them make their decision between slightly different products, they take more ownership of their purchase, and have a more positive buying experience.
Decision phase – strategies for the product page
Even a well-organized shopping site can offer a dazzling array of product choices. There are several cognitive biases that effective sites employ to make you feel good about your decision to purchase. Let’s look at two examples.
Image 4 – Product page mobile (source: Exponea)
The cognitive bias of doubt avoidance says that consumers tend to remove doubt about tenuous decisions by making quicker, ill-informed ones.
You’ll notice the text in the upper right corner promises ‘More than 98% reliability’. This little icon is powerful, as it can nudge your customer to feel better about making the purchase decision. Highlighting that your product is eco-friendly or third-party tested, for example, can help remove customers’ doubts.
Scarcity and loss aversion
Now take a closer look at the bottom left corner of the product page, and you’ll see a notice that there are fewer than five of these particular phones in stock. This is the scarcity heuristic in play; if you are hesitating to make the purchase, this strategy can be a powerful motivator.
And the cognitive bias of loss aversion is at play here as well. People are more averse to the pain of losing out on something than they are pleased to gain something. In other words, $10 saved is better than $10 found.
What this means is that scarcity and loss aversion strategies can drive customers to make a purchase decision, rather than lose out on a perceived great or popular deal.
Action phase: strategies for the checkout pages
Now that you’ve decided to make the purchase, you click on ‘add to cart’. But you’re not immediately directed to your shopping cart; instead you’re presented with more, related options.
Image 5 – Product was added to cart (source: Exponea)
Here you see options to buy a warranty, a screen protector, and insurance. And there’s options for helpful services such as anti-virus software installation – all things designed to bolster confidence in your purchase.
They’re not bombarding you with non-relevant offers or cajoling you into spending more money; they’re offering targeted, helpful items and services directly related to your purchase. They are revisiting the doubt avoidance cognitive bias here, by removing any lingering doubt about your decision to buy this phone.
The shopping cart
Making the checkout process as quick and easy as possible is key to clinching the purchase. The last steps are designed to eliminate any lingering doubt and push you forward to that last click.
Our e-shop breaks the process down into simple and clear steps.
Image 6 – Shopping cart three steps (source: Exponea)
Rather than presenting you with one long, perhaps overwhelming, form, this approach is organized and will move you along nicely through the checkout process.
Make the journey easy
Cognitive biases, correctly employed, will help your marketing team steer your site’s customers toward making a purchase through a seamless-feeling process. They will help actively ease your customer’s doubts throughout their purchasing journey. And there are great software tools out there to help you and your team. Using these marketing psychology innovations can ultimately lead to increased sales and satisfied, loyal customers.