Marketing techniques have evolved greatly in the modern era. Marketing is no longer limited to just the idea of advertising and branding products. It is about creating awareness about products in the mind of the consumer such that a particular product can resonate better.In digital marketing, targetting the potential customer is becoming better day by day.This customer targeting can be done using a number of different ways. One of the best ways to do this is the use of cognitive biases.Framing effectis when our decisions are influenced by the way information is presented. Equivalent information can be more or less attractive depending on what features are highlighted.Consider the following hypothetical: John is shopping for disinfectant wipes at his local pharmacy. He sees several options, but two containers of wipes are on sale. One is called “Bleachox” and the other is called “Bleach-it.”Both of the disinfectant wipes Jon is considering are the same price and contain the same number of wipes. The only difference Jon notices, is that the Bleachox wipes claim to “kill 95% of all germs,” whereas the “Bleach-it” wipes say: “only 5% of germs survive.” After comparing the two, John chooses the Bleachox wipes. He doesn’t like the sound of germs ‘surviving’ on his kitchen counter.John’s decision to buy the Bleachox over Bleach-it wipes was informed by the framing effect.Anchoring effectAnchoring bias occurs when people rely too much on pre-existing information or the first information they find when making decisions. For example, if you first see a T-shirt that costs $1,200 – then see a second one that costs $100 – you’re prone to see the second shirt as cheap. Whereas, if you’d merely seen the second shirt, priced at $100, you’d probably not view it as cheap. The anchor – the first price that you saw – unduly influenced your opinion.Loss aversionLoss aversion suggests that for individuals the pain of losing is psychologically twice as powerful as the pleasure of gaining. In other words, losing something (an amount of money, an item, etc.) feels worse than gaining the same thing.Insurance company websites will often display a long list of unlikely, yet costly outcomes that we may encounter should we not buy insurance (Outreville, 1998). This list of potential unfortunate events primes us towards the preference of avoiding these large losses and makes us forget about the small, but regular payments we would need to make into the future to ensure insurance coverage.Endowment Effectthe endowment effect describes how owners of goods view what they own more positively than they would otherwise.This bias influences people to pay more to retain a goods that own, and influences people to not exchange something they own for an object of the same value. This leads to people only being willing to sell what they own for more than it is worth, simply because they own it.In one study, participants were given either chocolate bars or coffee mugs. They were then offered the ability to trade for the other good. No matter which good they had been given first, participants more often chose not to trade their item.Paradox of ChoiceHaving choices is usually considered a good thing. However, too much choice leads to cognitive overload and subsequent paralysis.Firms may structure choices to avoid the paradox of choice situations where too many offerings drive customers to a competitor or make them fallback.“Learning to choose is hard. Learning to choose well is harder. And learning to choose well in a world of unlimited possibilities is harder still, perhaps too hard.” -Barry Schwartz, The Paradox of Choice: Why More Is LessAvailability HeuristicThe availability heuristic describes our tendency to use information that comes to mind quickly and easily when making decisions about the future.Imagine you are considering either John or Jane, two employees at your company, for a promotion. Both have a steady employment record, though Jane has been the highest performer in her department during her tenure. However, in Jane’s first year, she unwittingly deleted a company project when her computer crashed. The vivid memory of having lost that project likely weighs more heavily on the decision to promote Jane than it should. This is due to the availability heuristic, which suggests that singular memorable moments have an outsized influence on decisions.The availability heuristic can lead to bad decision-making because memories that are easily recalled are frequently insufficient for figuring out how likely things are to happen again in the future. Ultimately, this leaves the decision-maker with low-quality information to form the basis of their decision.Bandwagon effectThe Bandwagon effect refers to our habit of adopting certain behaviors or beliefs because many other people do the same. (Reviews and testimonials)I copied that from this source (There are 85 other Cognitive biases if your are interested in more): https://ift.tt/33ZO5em see hubwealthy.com/wealthy
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