Overcoming Cognitive Bias for Sales and Marketing Success

We all like to think that we are rational beings. We like to think we consider all the facts, analyze the situation and make good decisions, including buying decisions.

Sorry, but that’s just not the case.

The reality is that human beings often make decisions based on existing cognitive biases. Facts may get your client to the point of considering your proposition, but more likely than not their final decision is emotional.

Marketers could complain that clients sometimes make irrational decisions that are against their interests. Or marketers can recognize reality and make cognitive bias work for them.

Familiarity

Repeated exposure breeds recognition, credibility and interest. This is why advertising is most effective over time.

People must see the ad or a similar ad repeatedly before it even registers. But that’s not enough. You should be marketing to your target market through several channels at once.

Imagine someone repeatedly sees an influencer using your client’s product on social media, sees online ads with a similar message several times and gets multiple emails about the product. They are much more likely to become a customer than someone who just sees an ad a few times.

Of course, retargeting is another great way to repeatedly expose a prospect to a product.  Every time a prospect comes to your client’s website, you can present them with an ad for a product they viewed before or a special promotion of that item. Or perhaps they bought some yellow shoes last time they were on the site. When they return, you can show them the matching purse.

Retargeting can lift ad engagement rates up to 400%.

The Bandwagon Effect

The bandwagon effect is a cognitive bias where people tend to follow the crowd.

In B2B, that means that most businesses will follow the rest of their industry. This is a blessing and a curse. If you are selling B2B, it means you will have to work hard to prove yourself and oust your currently market-leading competition. On the upside, if you can woo some of the big players in the vertical to your side, you can then create the success stories you need to make substantial inroads into the rest of the industry.

If you are selling B2C, showing influencers using your client’s product both inside and outside of social media can be tremendously helpful.

Loss Aversion 

People do not want to let go of something they already have even if they are compensated for it. The pain of losing an item is greater than the joy of obtaining a similar item of equal value.

This carries over into ways of doing things. If changing to a new product, service or way of doing things is too difficult, buyers will hesitate to act despite benefits down the line.

If you are selling B2B, you are no doubt aware that some industries and professions are much slower to make changes than others.

For example, law firms held onto WordPerfect almost exclusively for many years after their clients and the rest of the world and had moved on to Word (for those still on PCs).  Though many law firms use Word now, the legal profession is about the only place WordPerfect has survived.

To overcome loss aversion, it’s helpful to offer free trials so people can see for themselves. For big B2B sales, this also enables businesses to keep in touch with the prospect and develop a relationship.

Of course, common sales techniques such as special limited time offers can also help move procrastinators off the fence of their old ways.

Ambiguity Effect

People tend to make familiar, safe choices.  Most dislike uncertainty. In other words, better the devil they know than the one they don’t know.

To help counteract this, it is important that every contact a prospect has with the company from social media to salespeople conveys reliability. This is where your marketing agency client’s online reputation and reviews can help. Do everything you can to drive away uncertainty and instill confidence.

The Compromise Effect

If you want to push a particular model of your client’s product, or you want to upsell from your lower priced product, it helps to give people three options, low, medium and high. Many people are uncomfortable buying either the cheapest or most expensive of anything and feel safe in the middle. They feel they are mitigating risk between a cheap product that isn’t good enough and an expensive product that might cause buyer’s remorse.

When people are presented with only a low and high priced model, sales for each tend to split down the middle.

When you offer three options, you may find that over half go for the middle option and smaller percentages buy the lowest and highest options. So, if you want to feature a specific product, price it in the middle range. Of course, this is assuming that the pricing is not wildly divergent.

The IKEA Effect

It’s a well-established cognitive bias that people who are involved in creating something value the end result more. This is commonly referred to as the Ikea Effect from a study where groups were asked to assign value to goods. Those who assembled goods such as Ikea furniture assigned a higher value to them than those who were shown the goods preassembled.

How can marketers tap into this?

If you involve your marketing clients in the process of developing marketing strategies and tactics, they will become more invested. Have brainstorming sessions for example. Work with your clients to customize marketing strategies and tactics to their company. You might give them a free trial and then customize the services they buy in line with their feedback.

You can take this a step further and involve your clients’ customers in the process of product development such as running contests for the best product ideas, asking them to complete surveys and so on. Get VIP customers involved in Beta products. Giving customers the ability to customize their purchases may also help sales to sky rocket.

Long story short, people value something much more if they are involved in its creation even if the end product isn’t perfect.

Confirmation Bias

We might like to think we see the world objectively, but we see it through the lens of our experiences and conclusions we have already made.

We are much more ready to accept information that supports what we already think rather than information that opposes our current beliefs.

So, if a marketing agency or a consultant tells a business owner that you’ve been doing things wrong, that business person may not readily accept what the agency has to say. Even if the agency can produce reams of statistical proof. We are invested in keeping our beliefs intact.

What you can do is start by giving your prospects information that you know supports their current beliefs. Compliment them on how they have been doing things. Then slowly introduce ways to build on what they have done and make improvements.

It’s important to listen to your prospects and understand their viewpoints.

This Is the Tip of the Iceberg

Every one of us has cognitive biases that affect our buying decisions.

Those we have listed here are just a few.

Whether you are trying to sell or upsell your marketing services to clients or laying out marketing campaigns for their sake, you need to keep that in mind.

Learn as much as you can about your prospects and your clients’ prospects. Try to get inside their minds.  Listen to them and try to serve their needs.

Be sure to put your best foot forward from your first contact. And don’t get too comfortable.

Concentrate on your client and their customers not on how much you want a sale. What are the prospect’s problems? What solutions can you or your client offer that can solve those problems and benefit the ultimate customer?

You don’t have to do it alone. Look to Umbrella to help you develop successful marketing strategies both for your agency and your clients.