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6 Cognitive Biases That Can Affect Your Buying Decision

It's tempting to argue that shoppers are more likely to act rationally when the stakes of their purchase are higher.

Anyone who has ever purchased a car, a home, or paid for a lavish vacation understands that the last moments of the transaction are not devoid of complicated feelings. And on the other end of the spectrum, even a seemingly practical, low-cost purchase like picking up a bottle of a customer's go-to shampoo can be triggered by either emotional or logical factors.

As if that weren't enough, advertising, and branding in particular, further muddles the waters of reason and emotion.

There is a common practice among brands of trying to make their customers feel something, and many consumers will go so far as to say they love or hate a product because of this or that.

These associations, which are frequently intertwined with our sense of self and our goals for who we want to be, are a powerful source of behavioral change in and of themselves.

Let's review the 6 biases that-are mostly present in your purchase-decision-making process:

1. Category heuristics

Category Heuristics are quick fixes or general rules of thumb that help us reach a choice within a category quickly and satisfactorily. An illustration would be paying attention to the number of megapixels (MP) the camera has when buying a smartphone or the number of gigabytes (GB) of data that is included in a mobile phone plan.

Daniel Kahneman, a rock star Princeton psychologist, and others, including Shah and Oppenheimer, discovered that heuristics reduce cognitive effort by having the following effects on decision-making:

  • focusing on fewer pieces of data

  • relying on readily available facts

  • Information weighing made easier

  • incorporating less data into a decision-making process

  • lessening the number of options overall

2. Authority Bias

The tendency to change our beliefs or actions to reflect those of someone we view as an authority on a subject is known as authority bias. We often take the advice of those we consider to be reliable, informed specialists when we're uncertain, thus we can take the authority view as a mental shortcut. In one study, college students' brains were scanned as they made financial judgments.

The brain scans revealed that when students received guidance from a known economist, the decision-making regions of their brains displayed decreased activity as the students "offloaded" the responsibility of the decision-making process to the expert.

3. Social Proof

In ambiguous or unsure circumstances, people have a tendency to imitate the behavior and behaviors of others, according to the social proof theory put forward by psychologist Robert Cialdini. People now find it much simpler to rely on social proof as a decision-making quick cut thanks to the internet's digitization of word-of-mouth testimonials and recommendations.

Sometimes we are aware of this, as when we take the time to read customer reviews, but most of the time we are influenced without even realizing it. For instance, we can unconsciously click on an advertisement that has a four- or five-star rating because we are attracted to what seems to be a well-liked option.

4. The Power of Now (Urgency)

The concept of "power of now" describes our propensity to choose the now to the future. Because our evolutionary survival depended more on our capacity to solve issues in the now than on our capacity to make plans for the future, humans are built to live in the present.

This explains why it can be difficult for people to save money for the future. The popularity of immediate downloading or 24-hour delivery in contrast to having to wait to receive a product can also be attributed to the "power of now."

5. Scarcity Bias

The economic tenet that scarce or constrained resources are more desired underlies the concept of scarcity bias. "The scarcity principle feeds on our weakness for shortcuts," says Robert Cialdini. 16 Usually, there are one of three types of scarcity:

  • Time-limited: When a product's supply is limited, it provides a deadline that forces customers to act before the time runs out.

  • Quantity limited: People view scarce or limited supplies as threats to their freedom of choice, which prompts a response to counter the threat and protect their access to the resource.

  • Censorship causes people to place a higher value on restricted features because exclusivity makes them feel special. Access limited: indicating restricted access to features like information, groups, or spaces

6. Reciprocity (The Power of Free)

The phrase "power of free" refers to the unique quality of the price of zero. In comparison to a price even slightly above zero, the demand for a good or service is noticeably higher at a price of exactly zero.

The behavioral economist Dan Ariely describes a study in which participants were given the choice between two offers in his book "Predictably Irrational." One $10 Amazon gift card was free, and the other $20 gift card was available for just $7.

Despite the second option being more advantageous, more people opted for the $10 gift card. A source of irrational enthusiasm that can be vital in persuading a customer to make a purchase decision, the power of free can be seen as an emotional hot button.

Our set of six represents several of the most potent principles found in the literature, while it is by no means an exhaustive list of all biases at work. All of these principles are acceptable for testing at scale. Additionally, it has the benefit of supporting implementations ranging from straightforward copy modifications to more intricate merchandising and logistical choices.

The biases that The Behavioral Architects found have been studied in depth in the academic world, 300+ just to give you a number. However, these 6 biases are rooted in most of the basic purchasing decision making in everyone of us. And they can be used enhance your marketing efforts at every level of your funnel.

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