Did you know you could sell a $20 bill for ten times its value? Or that a person you’re physically attracted to may not be as smart and funny as you think? These things are called cognitive biases, and they rule your entire life without you even knowing it. Here are 7 psychological effects you can use in marketing:
1. Phenomenon of Max Bazerman.
How hard could it be to take 20 bucks from an MBA student? In fact, Professor Max Bazerman proves it’s easy-peasy. In 2010, he first conducted an experiment at his class where he organized a simple auction: he would give a $20 bill to the student who pays the most money for it.
The bidding started at $1. The only rules of the auction were that bids could only go up by $1 (no less, no more) and that the second best bidder would pay the whole sum of their bid to the professor. So, let’s say the best bid was $18, then the second best would be $17.
The one who paid $18 would receive the auctioned bill and win 2 bucks, while the one who bid $17 would just pay the money and receive nothing. Simple, right? Well… At first, the auction went as planned, but the stakes rose pretty fast, and soon the bids reached the nominal value of $20. A pause ensued, and then… someone bid $21.
Students started laughing at that, but surprisingly, the bidding didn’t stop. The auction, which turned basically to farce at this point, continued until the students finally had enough. The $20 bill was sold for $204. The overall sum the professor won totaled $387.
As Bazerman explained after the end of the auction, it was the typical picture for any business person. He conducted the same experiment with CEOs of major companies and still managed to sell the 20 bucks above their face value. It all boils down to the fact that nobody wants to be the second bidder and lose money without winning anything back. So the auction continues until someone sees the fallacy and decides to stop the race. Sometimes, as you can see, it happens much too late.
2. Decoy effect
Let’s say you’re at an electronics store, choosing a new SD card for your camera. You see two options before you: one has the capacity of 64 GB and costs $15, and the other has the storage space of 128 GB, but costs $30. There’s an equal chance of you choosing either of them — some will prefer greater capacity, while others will go for lower price.
Which one would you choose, by the way? Let me know down in the comments! Okay, and now a third option appears. This SD card has the capacity of 96 GB, which is higher than the first but lower than the second. But its price is higher than both: it’s $35.
This third option is called a “decoy,” and its role is to make the pricier second SD card more favorable in the eyes of the consumers. Indeed, when you look at all three options, you actually consider only the first two, because the third one is worse than either of them. Still, you now look at the 128 GB card from another angle: it’s cheaper than the 96 GB one and has more storage space, making it better in all respects.
The 64 GB card, though, is only cheaper than the 96 GB one, but its capacity is lower. It’s kinda obvious that you would choose the best one, right? Well, marketing specialists got you there. The only reason why there’s this third option on the market is to create this decoy to make you buy a more expensive product. Insidious.
3. Halo effect
Enough talk about money, let’s switch to other concerns. Ever thought how in movies and cartoons good characters are often depicted as beautiful and attractive to the eye, while evil “baddies” usually have some repugnant features, like crooked teeth, warts or something like that? This is how our perception of good and bad personality is shaped.
You may not notice this, but when you see an attractive person, you tend to exaggerate their good traits of character. And that’s the gist of the halo effect. But there’s more to it than that: it’s not only about the physical features, but the overall impression a person makes.
If he or she is nice and charming, we often extend these qualities to everything there is to that person, and our mind draws them as also smart, funny, and witty. Now that I know this, I’ll probably trust my judgment of people a bit less. Ah well…
4. Framing effect.
Imagine you’re presented with a choice of two medical treatments for some disease — let’s not go into particulars here. The package insert for the first one says it has 80% effectiveness against the disease, while the second one is described as having 20% chance of failure. If you look closely at both of them, you’ll easily see that they’re very similar.
Like, the same even! But according to statistics, the vast majority of people would choose the first treatment over the second. This is what the framing effect is about: we tend to prefer an option that is described in a positive way. Even if the only other option is absolutely the same, people will likely disregard it because it’s been given a negative description.
Remember the 20% chance of failure? That’s it. And the effect actually applies to anything. Politicians and marketing specialists alike use it a lot in their campaigns. So pay attention to the deeper sense, not the words that frame it.
5. Illusion of control.
This cognitive bias is probably one that describes human nature the best. Tell me first, when is there a higher chance of getting into a road accident: when you’re driving a car or when someone else is at the wheel and you’re just a passenger? Sound off in the comments! I’ll tell you what the statisticians say about it in a minute.
In the meantime, hear this: Professor Ellen Langer conducted several studies to research the perceived control over a situation. One of them involved a lottery. Her subjects were either given tickets at random or got to choose their own.
None of them knew the winning combinations, so they couldn’t possibly know which tickets would have a higher chance of payoff. Still, the participants were allowed to exchange their tickets to try and win more money. As a result, Professor Langer saw that people who chose their own tickets were more reluctant to part with them.
Also, the tickets with familiar symbols were less often traded than ones bearing different, unfamiliar signs. On top of that, even if the odds were better, subjects with tickets they had chosen themselves were less likely to trade them. This shows that, although the situation is completely random, people tend to think their choice somehow affects the results.
We like to be in control of everything, don’t we? Well, I promised to tell you the statistics for a car accident, so here it is: the vast majority of drivers think that the chances of them getting into one are much lower if they’re driving than if they’re riding as passengers. Such confidence, that! Was it true for you too? Give me a like if it was!
6. Dr. Fox effect.
Don’t get confused by the name — it’s not after any doctor. In fact, quite the opposite. The experiment that gave this effect its name was conducted in 1970, when two speakers gave lectures to an audience of trained psychiatrists and psychologists.
The topic was chosen specifically so that none of the trainees knew anything about it, for the experiment to be valid. The catch was that one of the lecturers was a real scientist, while the other was an actor, Michael Fox, under the alias of Dr. Myron L. Fox, an Albert Einstein College of Medicine graduate. When both the actual scientist and the actor gave the lecture in a monotonous manner, the students gave better feedback to the real lecturer and performed better on the test.
But when they were both asked to present the material in a more lively way, joking and engaging the audience, Dr. Fox was rated as highly as the actual professor. Moreover, the lecture was deliberately full of doubletalk, contradictory statements, and downright nonsense, but despite all that the students spoke very highly of Dr. Fox’s professionalism.
And that’s what’s so disturbing about the whole effect: the positive attitude and liveliness of the actor completely fooled a whole audience of highly educated specialists. If you ever heard motivational speakers and got inspired by their ideas… well, chances are that you’ve also experienced the Dr. Fox effect. Congrats!
7. Spotlight effect.
If you’ve ever felt self-conscious leaving your house in different socks, worrying that everyone would laugh and point fingers at you, you’ve become a victim of the spotlight effect. It’s a psychological bias that basically makes you think too much of yourself.
You’re the center of your own world, that’s for sure. No one lives your life for you, and that’s why you notice every little detail in yourself. And you naturally tend to think that everyone else will also see that strange new mole on your forearm or that your nails aren’t properly manicured. But let’s be honest: how often do you notice such tiny things in others? My guess is almost never.
That’s because everyone’s too concerned with themselves to pay much attention to other people. But don’t get all upset about this: it’s a widely common effect. Just try not to think too much of your own importance in the life of complete strangers.
Which of these effects have you experienced on your own? Let me know down in the comments! If you learned something new today, remember to rate this article “7 Psychological effects you can use in marketing” and share it with a friend.
Credit: Bright Side