Until ] Neel Vithalani
When running an e-commerce business, you face many challenges. Trying to compete with the giants can be overwhelming if you don't have a solid marketing strategy in place. The ultimate goal of any marketing activity should be to smooth the decision-making curve and proactively shape the consumer journey to buying the products they are supposed to buy. It can only help to put some science into the process.
Marketers have put a lot of science into persuasive marketing to influence consumer behavior. Of all the methods used, the focus on cognitive bias is the most popular and proven strategy. In this post I am going to discuss how to use cognitive prejudice in e-commerce marketing.
We make about 35,000 decisions every day, and that is only possible with the help of a few shortcuts. For example, social media mogul Mark Zuckerberg never has to decide what to wear every day as he always wears the same combination of gray t-shirt and blue jeans.
In order to avoid the stress that can result from decision making, evolution has given our minds cognitive prejudices. These biases shorten the time it takes to make a decision by skipping cognitive processes through memory and perception. Cognitive prejudices, also known as mental abbreviations, aim to make our lives more logical and with less effort. So here's how you can use them in marketing your small ecommerce business.
People believe what they want to believe, and affirmative bias drives this instinct. Our minds will process new information based on our existing beliefs. In ecommerce marketing, if you resonate and stay consistent with the buyer persona, you can use confirmation bias towards customers before and after the sale.
Use confirmation bias in the following areas to reassure buyers that they are in control when buying:
Many online stores will place a third asymmetrically positioned product on their landing pages to increase the invoice size. While customers have to choose the cheaper product from two available options, putting a bait on the side changes the customer's decision. Here is an example:
Suppose you are looking for a tableware set and have the following options:
12-piece dinner set by Brand A @ $ 30
20-piece dinner set by Brand B @ $ 55
18-piece dinner set by Brand X @ $ 95
If there wasn't a third option, you probably would have bought the dinner set from Brand A and found it the most affordable. However, adding the asymmetrically positioned Brand X makes Brand B seem like the most attractive yet affordable option and ultimately boosts sales.
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This cognitive tendency can best be explained with the sentence “One bird in the hand is worth two in the bush”. Imagine a situation where I immediately offer you $ 20 or say I will give you $ 80 if I flip a coin and it shows up. You'd choose the $ 20, of course. But if I asked you to give me $ 20 and I gave you $ 80 when the coin comes up, you would be playing. In both situations, you will try to minimize your losses.
It is a very effective conversion booster at making people feel like they can use your product without any loss. Examples of the use of loss aversion in e-commerce:
You can combine loss aversion with FOMO (fear of missing out) to make your pitch appear more attractive for marketing purposes.
This cognitive tendency causes people to seek immediate rewards rather than delaying them. If all results are positive, we tend to choose what is immediately available. For example, some marketers allow customers to purchase items instantly with a credit card and make payments in installments.
Other examples of hyperbolic discounting are:
Hyperbolic Discounting is a powerful tool for selling products that are not within the direct economic reach of your consumer base. Breaking the payments down into small installments can help people feel more secure when making purchases.
The sunk cost tendency or error refers to our tendency to stick to our decisions based on the time, money or energy that we have already invested. Imagine a scenario where you have tickets to a concert but have a severe headache on the night of the concert. Will you still go Despite the headache, you'll likely do it because you've already paid for the tickets and don't want your money to be wasted.
Here are ways to make the sunken cost fallacy work for an e-commerce site:
Here I have specifically focused on the cognitive prejudices that small online retailers can easily exploit. But know that your bigger colleagues are already using them to great effect, and any online business can benefit from this time-tested tactic.
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Contribution by: Neel Vithalani
Neel is a creative person who is always ready to take everything in hand that is innovative and captures the masses. He is currently working with Orderhive. He is passionate about technology, business and psychology.
Company: Orderhive
Website: www.orderhive.com
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