We like to think that we are fully in control of our decision-making process. The reality is, however, that we are beholden to our body’s biological processes. With decision-making, that means the signals sent and received by our almighty brain, some of which cause us to misinterpret key information about the world around us. In this article, we’ll discuss how these erroneous signals allow us to tap into cognitive bias in marketing a WooCommerce business.
What is cognitive bias in simple words?
Wikipedia defines cognitive bias as systematic patterns of deviation from rational thinking in judgment. In other words, cognitive biases are mistakes our brain makes that affects our perception of reality. These misjudgments, whether it’s assigning too much or too little value to something, are an integral part of human behavior and society.
Businesses exploit cognitive bias to engage customers, while politicians use it to shape public opinion. From deciding where to eat lunch to deciding which football team to support, cognitive bias affects every part of our lives. So, what is cognitive bias in marketing?
With marketing, businesses try to send signals to customers to get them interested in a specific product or service. Cognitive bias is often used to trigger behaviors such as purchasing a product or subscribing to a newsletter.
In this article, we review 5 common biases and how they are used in marketing. We will use Growmatik to practice some of the examples. Growmatik is a Cross-channel Marketing platform for WooCommerce.
1- Fear of missing out (FOMO)
Let’s say you’re walking down the street and you hear a hubbub around the corner. Chances are, you’d go and investigate—or at least take a peek. We do this because we as humans fear missing important information. As a consumer, this translates to not wanting to miss something of value.
Timeboxed discount campaigns and flash sales all take advantage of the cognitive bias known as FOMO, or fear of missing out. Emphasizing the urgency or popularity of a certain deal can make customers pay attention when they may not otherwise. Here are some key strategies for FOMO campaigns.
Listing the stock number with each product shows your customers the time frame they have to buy the item before it’s out of stock.
To do this in WooCommerce, activate Stock Status in the product data meta box. This can be done in the Inventory Tab for simple products and in the Variations tab for variable products.
Display a countdown timer on your landing page, craft flash sales or timebox campaigns.
Early bird discount
The early bird gets the worm! Offer special discounts on new products to users who subscribe within a specific time frame.
What you missed campaigns
Let absent customers know what they’re missing out on with these emails. Chances are, they’ll be intrigued and will re engage with your brand.
The process in Growmatik is similar to the previous example. For segment targeting, go to the People section. There, create a custom segment by choosing All Customers and setting Visit Date as the filter, targeting all customers who have not visited during your campaign.
2- Hyperbolic discounting bias
Healthy habits are the secret to a long life. Regardless, so many people smoke, take drugs and eat unhealthy food. Humans are hardwired to value instant gratification over long term value. Credit operates based on this instinct. When taking out a loan to buy a car, we rarely think about having to pay it back—with interest—for years to come. Advertisements and call-to-actions along the lines of “Double your revenue now!” all play to your brain’s hyperbolic discounting bias.
Gated content is used to reward users taking a specific action. If a user subscribes to your website, for example, offer them a relevant freebie, like a useful e-book!
On the Automation Dashboard in Growmatik, select the target user segment by clicking the +. This could be loyal customers, or first time visitors, or any custom segments created via the People section. Set the condition as All Guests and the action as Show Popup. Select and customize the Ebook Content Giveaway template. Lastly, click Save & Exit and then Create Rule.
Discount upon subscribing
Both e-commerce shops and SaaS services can sway indecisive customers by offering them discounts when they sign up.
In Growmatik you can achieve this by creating an automation rule in the Leads section. Set the condition as User behavior: Signed Up and the action as Send Email. Select and customize Subscriber Welcome or another ready-made email template. Add the name of the subscriber, a discount coupon, and any other dynamic elements to your email before sending it.
3- Reciprocity bias
Reciprocity bias means that we are more likely to help those who have helped us first. Within the world of marketing, doing small things for your customers may help you utilize this bias.
Loyal customers who have used your product and liked it can be targeted via referral programs. For newer customers, especially those who haven’t made any purchases yet, try to offer giveaways to utilize this cognitive bias in marketing. Adding in a deadline to enter or another FOMO element can further increase its effectiveness.
Create a giveaway popup in Growmatik by clicking the + on the guest column of the Automation Dashboard. Set the condition as All Guests and the action as Show Popup.
Exclusive discounts for loyal customers
This method helps you solidify your relationship with loyal customers by showing them what they mean to your business with an exclusive discount.
You can quickly locate high-value customers in Growmatik by setting User Behavior > Orders placed or Spent time as conditions on the automation dashboard. You can further customize any segment via the People section. Set the relevant Segment as the condition and Send Email as the action, then customize or create the email template.
You can use the dynamic keyword elements in Growmatik’s email builder to include personalized info like customer name or number of purchases. You can also use the Dynamic product element to suggest what your customers can buy with the coupon.
In marketing, the anchoring bias effect means that customers are most likely to buy the first item they are presented with. Because of this, the hero section and the above-the-fold section of your landing page are key parts of your customer’s journey. Target your visitor by saving these spots for the most eye-catching content, whether it’s a catchy slogan or a deal they can’t refuse.
Each customer comes to your website with different expectations. Personalize your hero section based on customer preferences, or dynamic keywords like time of day or visitor location. This article offers a useful guide to personalizing landing pages with the Growmatik Webpage Personalizer.
5- Zeigarnik Effect
Via the Zeigarnik Effect, we feel compelled to complete partially completed narratives or tasks. LinkedIn takes advantage of this by offering a partially completed profile upon sign up. Other apps, instead of having users start from scratch, have users complete a goal through the onboarding process.
The Zeigarnik Effect plays a key role in both product and game design. Gamification via milestones is a great way to employ this cognitive bias in marketing. A milestone system encourages visitors to unlock more rewards by buying more, just as an upgrade system helps users progress through a game. These new rewards could be discounts, freebies, or exclusive access relevant to your brand.
You can build a point system based on criteria such as total order value in Growmatik and automate discount email campaigns to be sent when users hit certain milestones. To do so, go to the People section and choose All Customers from the dropdown menu. Click + to define your segment filters. Either number of orders or total order value under Shopping Activity make useful filters, and you can always use both. Build segments for each milestone by repeating this step, defining different segments for a total of 10 orders, 20 orders and 50 orders. Save each segment under a name– Bronze Member, Silver Member and Gold Member are great names to give a sense of progress.
When you’ve created a segment, click Send email to segment in the upper right-hand corner. The page will redirect you to the automation dashboard, where you can assign Send Email as the action for the segment. Select a premade template to organize the email content via Create email. ‘Dear loyal customer’ makes a great opening line. Use the Growmatik email builder to create the email content, save it, and select Create rule to execute the automation. Repeat this step for each segment.
Don’t forget to use dynamic elements to personalize the email as much as possible. Attach the related coupon to the email using the coupon element. Finally, add any style elements like emojis, colors, or animated GIFs to make the email a fun experience for your customer and not just a bland notification.
Cognitive bias in marketing exploits some of our brain’s most basic functions and guarantees eye-opening results. But, if employed ineffectively, you could end up with repetitive, lack-luster marketing campaigns. Customers are exposed to a great number of marketing gimmicks on a daily basis, and more discerning customers might be turned off by overused techniques. Be sparing in your use of FOMO, the bandwagon effect and authority bias especially to avoid scaring away potential customers!
The most sustainable business aims to foster its customer’s growth. Rather than using cognitive biases to trick customers, which can hurt your image and customer retention in the long run, use them as key supplementary strategies to make your products or services more appealing and engage your customers on a personal level.