If you’re a marketer, odds are you’re familiar with these terms: “bias,” “confirmation bias,” and “scarcity principle.” You might even know that the word “hedonic adaptation” is used to describe how people get used to good things quickly.
But what about the other 35 terms in this list? These are all psychological terms that marketers and advertisers use in their campaigns every day and if you want to become better at your job, then it’s important for you to keep up with them as well!
| Takeaways |
|---|
| Understand the cognitive biases influencing consumer decisions |
| Leverage rocket science insights in neuromarketing |
| Harness the power of the brain in buyer decision-making |
| Read your prospects’ minds for targeted marketing |
| Utilize neuroimaging research to enhance marketing strategies |
Bias
You may not know it, but you are biased. And so am I. Bias is a tendency to think or act in a certain way when we encounter something new, and it can be positive or negative.
Bias is influenced by many things our personality, our environment (the people around us), past experiences, and even culture.
As an example of how bias works on an individual level, let’s say that you have a friend who is an extrovert who loves talking to everyone they meet at parties, while you’re an introvert who feels uncomfortable in large groups and would rather talk with just one person at a time.
If both of you attend the same party together, who do you think will talk more? The answer: your friend!
Bias doesn’t only affect how we interact with others; it also affects how we interact with brands online as well and marketers need to understand this if they want their advertising campaigns to succeed.
Cognitive biases play a crucial role in shaping consumer behavior. Understanding these biases can greatly enhance the effectiveness of your marketing efforts. Explore our article on 19 Ways We Can Learn from Cognitive Biases to gain insights into leveraging these psychological tendencies in your campaigns.
Confirmation Bias
Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms one’s pre-existing beliefs or hypotheses.
It is a type of cognitive bias and a systematic error of inductive reasoning. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way.
The effect is stronger for emotionally charged issues and deeply entrenched beliefs. Confirmation biases contribute to overconfidence in personal beliefs and can maintain or strengthen beliefs based on flawed assessments of the evidence.
Peak-End Rule
The peak-end rule is a psychological phenomenon that states people tend to remember the most extreme part of an experience, not the average.
For example, you might be asked to rate your vacation on a scale from 1–10. You would probably give it a high rating for the best parts and a low rating for the worst parts. But what about all those other days? Did they deserve an average score? If so, you’re wrong!
Likewise, when watching a movie you may rate it as good or bad based on its ending but what if it had been cut short at any point before that?
Would it still have been rated as “good” or “bad”? Of course not; again this is because we tend to think in terms of peaks and valleys rather than averages.
Neuromarketing draws inspiration from various fields, even rocket science. Discover 15 Things We Learned from a Rocket Scientist about Neuromarketing and how applying insights from different domains can lead to innovative marketing strategies.
Framing Effect
The framing effect is a psychological phenomenon that occurs when people are presented with two or more options and the choice of one over another depends on how each option is framed. For example, consider the following:
If you were asked if you would prefer to buy a $20 gift card or a $50 gift card for your friend, which would you choose?
If you were asked if you would prefer to eat at an expensive restaurant or save money by going somewhere else, which would you choose?
Selective Perception
Selective perception is the tendency for people to focus on information that supports their beliefs while ignoring information that contradicts them. It’s also referred to as confirmation bias and motivated reasoning.
Selective perception can be a useful tool when it comes to making decisions the same way we might highlight information that fits our worldview and ignore everything else.
But when it comes to marketing, selective perception can lead consumers astray by skewing their perceptions of your brand or product relative to competitors’ offerings.
The key is understanding how you’re perceived by consumers so you can adjust your messaging accordingly and avoid falling victim to confirmation bias (also known as selective perception).
Selective Attention
Selective attention is the ability to focus on one thing while ignoring everything else. It’s a function of the brain that is controlled by the prefrontal cortex, which also handles decision-making and problem-solving.
Selective attention can be broken down into two types: bottom-up, where your senses alert you to something new; and top-down, where you choose what to pay attention to based on prior knowledge or experience (and thus shape your perception).
Buyers often make decisions based on subconscious factors. Learn why your buyer’s decision is heavily influenced by their brain’s mechanisms in our article, 11 Reasons Why Your Brain Will Win Your Buyer’s Decision.
Recency Effect
The recency effect is a cognitive bias that causes us to remember the last thing that happened more than other things. This is a powerful tool for marketers to use, because it can be used to create a lot of positive associations with a brand.
An example might be if you sell clothing and want people to keep buying from you, then having an end-of-the-year sale would be a good idea.
People will respond better when they see how much money they saved compared to last time, which makes them more likely to make another purchase in the future since they feel like they have already gotten some value out of their purchase today.
Scarcity Principle
The scarcity principle is a key element of psychology that marketers can use to encourage people to buy something before it runs out.
The idea is that people value something more when there is less of it, so if you tell your customers that you are running low on a certain product or service, they will be more likely to buy it.
This technique can also be used when offering special deals or discounts if you put an expiry date on any offer, people will feel compelled to act fast in order not to miss out.
So next time you want to increase sales and profits for your business, try using some of these psychological techniques!
Endowment Effect
The endowment effect is the tendency for us to place more value on things that we already own. It’s not just a physical possession, either; it can apply to everything from stocks and bonds, to cars and houses, and even relationships.
This psychological phenomenon can be used by marketers as a way of influencing consumers to buy more than they would otherwise.
Here’s how it works: If you sell something for $100 but then tell people it costs $200—like this old ad from Kmart people are more likely to buy it because they feel like they’re getting a bargain (even though they aren’t).
The power of the endowment effect comes in when you use this “bargain-hunting” mindset against yourself by selling an item at an inflated price instead of offering a discount or promotion on an existing product.
Hyperbolic Discounting
Hyperbolic discounting is the tendency to value the present more than the future. For example, you’re probably more likely to buy a candy bar today rather than a month from now.
This concept is important for marketers because it helps them understand consumer behavior in terms of what they value and what they don’t value.
If you can figure out how much people are willing to spend now versus later, then you can use that information to guide your marketing campaigns.
Present Bias
Present bias is the tendency to value immediate rewards more than future rewards.
This can be a problem for marketers because people are more likely to buy now than later.
Discounts and sales are one-way retailers try to overcome this bias (you’re buying it now because it’s on sale).
Another way is through impulse buys: products that people can’t resist taking as soon as they see them.
The “buy one, get one free” strategy works because of present bias you feel like you have to take advantage of the deal immediately, even if you don’t need two items or even any at all!
Prospects’ minds hold valuable information that can guide your marketing strategies. Unlock the secrets of understanding and connecting with your prospects through our guide on How to Read the Minds of Your Prospects.
Loss Aversion
Loss aversion is the idea that people are more sensitive to losses than gains. The term was coined by Amos Tversky and Daniel Kahneman in 1979, who wrote: “Losses loom larger than gains.”
Loss aversion is a cognitive bias and a psychological phenomenon, but it’s also one of three behavioral economic theories (along with prospect theory and endowment effect), which form the basis for behavioral finance theory.
Cognitive Dissonance Theory
Cognitive dissonance theory is a theory that suggests people have a motivational drive to reduce cognitive dissonance.
The theory implies that people have a motivational drive to reduce dissonance by altering existing cognitions, adding new ones to create a consistent belief system, or by reducing the importance of any one cognition.
The main idea behind cognitive dissonance is that we all have some sort of attitude or belief about something; whether it’s how we feel about ourselves or how we feel about our favorite hobby or sports team.
Once we form this opinion on something and find out more information that contradicts what we already know, it can lead us into situations where our beliefs are contradicted and cause us discomfort (i.e., cognitive dissonance).
To get rid of this discomfort, many times people will change their opinion on certain things and either reject new information as false or reinterpret it so that it fits within their current perspective.
Just-World Hypothesis
The just-world hypothesis is the belief that the world is just and that people get what they deserve. The name was coined by Melvin Lerner in his 1970 book, “The Belief in a Just World: A Fundamental Delusion” (Lerner).
The belief in a just world is a cognitive bias that causes people to blame victims for their misfortune and to rationalize why events happened as they did. This bias might also cause people to avoid taking precautions against future harm or help others as much as possible.
Just-world believers tend to think of themselves as good people who deserve success, while others might think bad things happen because of their actions or bad luck.
Brain Freeze Effect (Brain Freeze Is That Phenomenon You Experience When Drinking A Slushie Too Fast)
Brain freeze is a temporary headache that occurs when the roof of your mouth is exposed to cold food or drink. It’s caused by a rapid drop in temperature in your mouth, which causes blood vessels in the brain to contract.
Since it feels like your head is exploding from the inside out, brain freeze can be very painful.
Although it’s typically associated with ice cream and slushies, brain freeze can happen with any food or drink that causes sudden cooling of your teeth and gums (like ice water).
It’s more common in children than adults because their brains aren’t as well protected by bone yet, but anyone who has ever experienced one will tell you how miserable it can be.
Framing Effect (Framing Is The Belief That You Can Influence Someone To Agree With You By Rephrasing Your Argument, Making It Seem Like They Only Have Limited Options To Choose From)
Framing is a powerful tool for marketers. It refers to the belief that you can influence someone to agree with you by rephrasing your argument, making it seem like they only have limited options to choose from.
Consider this example: if you were going out on a date, would you rather be asked “where do want to go?” or “where do YOU want to go?” The first phrasing could give off the impression that your date is trying to decide where YOU should go.
But when framed as asking what YOU want, there is no pressure on anyone involved in making the decision and it seems less like an imposition on either person’s time or budget.
The same principle can be applied when trying to influence consumers into choosing one product over another through framing. For example: “Diet Coke vs regular Coke? Diet Coke contains fewer calories than regular Coke! Choose Diet Coke for weight loss!”
Neuroimaging research provides marketers with unprecedented insights into consumer behavior. Dive into the world of neuroimaging and discover how it can elevate your marketing strategies in our article, How Neuroimaging Research Can Help You Become a Better Marketer.
Semantic Differential Scale (A Lot Of Marketing Research And Surveys Rely On This 5 Point Scale To Gauge The Perception Of Customers On A Certain Brand Or Company)
The semantic differential scale is a 5-point scale used to gauge the perception of customers on a certain brand or company.
It uses positive and negative words to describe a brand, and marketers can use it to see how their customer base perceives them. This scale is often used in marketing research and surveys.
For example: if you were asked “What are some qualities that come to mind when you think about Apple?” You would answer with something like “cool” or “hip”.
However, if you were asked about Microsoft’s operating system Windows 10, you might answer with words like “annoying”, “frustrating”, or even “intrusive.”
Hedonic adaptation (Hedonic adaptation is the ability for people to quickly adapt to something good that makes them happy and then become used to it. This means that marketers need to create a continuous flow of new things for customers.)
Section: Serial positioning effect (The serial positioning effect is a cognitive bias that causes us to remember the first and last items in a series more than the ones in between.)
Section: Diderot Effect (This is when you buy something and then feel compelled to buy other products after purchasing your first one.)
Hedonic adaptation (Hedonic adaptation is the ability for people to quickly adapt to something good that makes them happy and then become used to it. This means that marketers need to create a continuous flow of new things for customers.)
Serial positioning effect (The serial positioning effect is a cognitive bias that causes us to remember the first and last items in a series more than the ones in between.)
Diderot Effect (This is when you buy something and then feel compelled to buy other products after purchasing your first one.)
Conclusion
We hope you enjoyed learning about these psychological terms. As we have said, they are all important concepts that marketers need to understand when creating their campaigns and measuring the success of their advertisements.
It’s our job as researchers to keep up with new trends in the field and ensure that our work stays relevant by incorporating new studies into our models.
Further Reading
Explore these additional resources to deepen your understanding of psychology in marketing:
Psychological Marketing Tactics: Discover effective tactics that leverage psychological principles to create compelling marketing campaigns.
Influence Buyers with Marketing Psychology: Learn how to use marketing psychology to influence buyer decisions and drive conversions.
Marketing Strategies Grounded in Psychology: Explore the intersection of marketing and psychology, and how psychological insights can shape successful marketing strategies.
FAQs
How can psychology enhance marketing effectiveness?
Understanding psychological principles can help marketers create more persuasive and engaging campaigns that resonate with consumer behaviors and preferences.
What are some key psychological tactics used in marketing?
Psychological tactics in marketing include scarcity, social proof, reciprocity, and anchoring, which influence consumer decision-making and purchasing behavior.
How does psychology influence buyer decisions?
Psychological factors such as emotions, cognitive biases, and social influence play a significant role in shaping buyer decisions, often driving them to make purchasing choices.
Can marketing strategies be informed by psychological research?
Yes, marketing strategies can be informed by psychological research, allowing marketers to tap into consumer motivations, needs, and desires to craft more effective campaigns.
What role does psychology play in consumer engagement?
Psychology helps marketers understand how consumers perceive and engage with brands, allowing for tailored approaches that resonate with individuals on a deeper level.
Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.
