Cognitive Biases Cont. Review!

As we discussed some cognitive biases last week, we will move further in our discussion and exploration of cognitive biases. We know biases are errors in human decision making that are there for optimising our survival in some way or the other. This week we are going to talk about some really interesting biases that humans have:

1.?????Extrinsic Incentives Bias: The Extrinsic Incentives bias is an attributional bias according to which people attribute more to extrinsic incentives (such as monetary reward) than to intricnsic incentives (such as learning a new skill) when weighing the motives of others rather than themselves.

Some actionable tips:

-???????Don’t always reduce the price in your product offering and think of other ways that will allow you to take advantage of the intrinsic incentives.

2.?????Paradox of Choice: People might think the more choice we have, the better it gets. Interestingly enough, it turns out to be the opposite. When we have more choice, we tend to fail to make judgements about which thing to choose. Having some choices is good but overdoing it can backfire against you.

There was an experiment done in which there were two stalls that sold jams. In one stall, there were 4 jars filled with different kinds of jams, on the other stall, there were 24 jars filled with different jams. Although people tasted more jams in the second stall, they didn’t buy from the second stall. While there were limited options on the first stall, people ended up buying from the first stall than from the second one.

Some reasons why this happens:

-???????When you have more choice, the chances of your regretting that choice is higher.

-???????People tend to feel less satisfied with the choice they’ve made.

So, what do you do when you have a lot of choices for your customers? We try to avoid choice overload in that case for our customers. We guide them by using the following:

1.?????Our Recommendations

2.?????House Speciality

3.?????Today Only

4.?????Most Popular

5.?????Photo or Illustrator

6.?????Bigger Font, Box, or Frame

If you see Amazon, it has a lot of choices. That’s why it has best sellers, amazon’s choice, seller ratings, reviews, etc to reduce the cognitive overload and guide the customers through their decision-making process.

It’s also interesting to look at the Restaurant Menu and what options do people really stick to when they have hundreds of food options to choose from. Think about it and try to get answers.

3.?????Loss Aversion: This is one of the most commonly talked and use cognitive bias. The idea here is that humans tend to avoid pain of losing something than the pleasure of gaining something of equivalent value.

There was an experiment done where two salespeople were given two different instructions. The first salesperson was told that if they will get a commission of $100 with every product, they sell for 10 items. The second salesperson was given $1,000 in advance and was told that he will have to give back $100 for every product they didn’t sell. The results were pretty surprising. The latter salesperson ended up selling more products than the first one. The reason being when you have something and you are asked to lose it, it’s very painful and people can do whatever is required to avoid it, in this case selling more products.

Some actionable tips:

-???????Use loss framing to put your message and draft your copy.

-???????Instead of using save, use not lose.

Some examples can be seen:

-???????Free trials à Netflix, Spotify etc.

-???????When cancelling these subscriptions, they focus on what we are going to miss out and lose.

4.?????Authority Bias: This bias suggests that humans tend to trust authority figures more in making decisions even if their opinion is irrelevant to a particular product category.

This can easily be seen with the brand ambassadors for various brands and how some people who might not be related to the product endorse a product and that creates an influence in the minds of the people.

Some actionable tips:

-???????Try to get authority figures to endorse your product.

-???????It doesn’t matter what people say about your product as much as it matters who is saying it.

5.?????Fluency Bias: This bias suggests that people with easier to pronounce names are more likely to be truthful than people with fairly complex names. This bias can also be seen in how people perceive content or any form of communication. Easy to use words and simplified content is more trustworthy than content with very complex words and terminologies.

People might think that using big words make them appear smart. Turns out exactly the opposite. Big words make you”

-???????Less Intelligent

-???????Less Truthful

-???????Less Likable

That is why it’s very important to make your content easy to read and experience that’s intuitive. Some actionable tips:

-???????Easy Language

-???????Easy to use – UX

-???????Simple fonts

If you implement this and make it easy for people to go through your content and messaging easily, you become more trustworthy and your words more truthful. One example of cognitive fluency is Apple’s website and communication channels. If you observe how easy and intuitive the design is of their websites and social media pages, you’ll realise how effective job they are doing with establishing truthfulness and trustworthiness in their brand. The fonts used are easy to read, the UX is fairly simple to navigate and the overall design is very intuitive.

Understanding these human biases allow us to design better experiences for people and also bring in more sales. Are you using some of these psychological principles already? If yes, do let me know how are you using those? This is the weekly roundup for week 8 in the CXL mini degree. If you found this article useful, do share it with your colleagues and friends and let me know as well.?