As the proverbial saying goes, both love and war are fair. But in the twenty-first century, you can also include marketing. Because you must be able to grasp your audience’s mentality in order to be able to win over their hearts and minds in a time when consumers are always being inundated with messages. And this is where behavioural science comes into play: by understanding how the most prevalent marketing-related cognitive biases operate, you can tailor your communications to the thought processes of your target audience. In other words, by supporting customers’ decisions, you can increase the efficiency of your marketing campaigns.
A Cognitive Bias: What Is It?
The best way to define cognitive biases is as short cuts in our reasoning. Through mental templates that are founded on perceptions or beliefs, they have an impact on how we make decisions on a daily basis. Though some people think that consumer cognitive biases are undesirable, like a “mistake in their logical reasoning,” the reality is that these biases enable us to make split-second decisions, assisting us in averting danger and seizing opportunity.
It’s also important to note that everyone is susceptible to cognitive biases. Actually, a cognitive bias in itself is assuming that others have these prejudices and that you are the only one who always thinks logically. The best we can do is recognise our own biases and, if necessary, address them, so they don’t lead us to make poor decisions.
The Impact of Cognitive Biases on Customer Retention in Marketing
It’s naive to assume that your clients always make logical decisions. But it’s also naive to think that customers can be entirely manipulated by shrewd marketing strategies. In fact, such actions can harm the reputation of your brand. Truthfully, purchasers often try to examine their alternatives logically, but mistakes can happen because of intrinsic fallacies.
As a result, cognitive biases in marketing serve to increase customer awareness of your brand and make sure that your message is understood by them rather than to deceive them. If you don’t take cognitive biases into account while developing your customer retention strategy, potential customers may ignore your offerings or, worse yet, abandon them altogether.
The Effect of Merely Exposure
This cognitive bias, sometimes referred to as the familiarity principle, states that we are more inclined to accept something if we see it frequently. For instance, if a strange or odd object is introduced into a classroom, students may at first find it upsetting, but if they are exposed to it on a regular basis, they will grow accustomed to it and perhaps even come to like it.
The Marketing Mere Exposure Effect
The mere exposure effect pertains to marketing and entails enhancing a specific product’s visibility and look. Customers will believe it is well-known since it is well-liked. Typical use cases comprise:
putting a product at eye level on shelves
Including a product image in the newsletter’s banner
putting anything out in the open in background of videos and other stuff
The Effect of Simple Exposure on Customer Retention
Because multichannel businesses have so many client touchpoints, dealing with this kind of cognitive bias in customer retention is equally simple.
Use website side banners to advertise your primary commodity or service.
Send customers emails that highlight particular products or deals.
Frequently inform your audience on social media about the benefits of being a customer, such as free shipping or an extended warranty.
Affective Anchoring
Because of the anchoring bias, we frequently base our decisions on the first information we receive. For instance, if you’re looking for a used automobile, you’ll use the first offer you like as a benchmark for comparison: anything that costs less than that is a fantastic deal, and anything that costs more is overpriced.
The Marketing Anchoring Bias
You must be the first brand that comes to the consumer’s mind in order to capitalise on the anchoring bias. Of course, existing clients who are already familiar with your brand will find this to be simpler in general.
Ahead of major retail holidays like Black Friday, be sure to launch early advertising
Always place the information that has been crossed out first when displaying a discount to put the extent of the discount into perspective.
Always place highlighted deals at the top of search menus.
Customers’ Anchoring Bias in Retention
A loyalty programme is a great way to counteract the anchoring bias because members are more likely to check out your deals first if they have unused points or coupons sitting in their account.
Place the program’s primary selling elements at the top of the landing page.
Always highlight the annual membership when you have a subscription programme, especially if the monthly cost is less.
Gain Loyalty by Forming a Shared Bond
There is no single, universal cognitive bias that applies to marketing and loyalty schemes. Customers may display them occasionally or not. Additionally, there are links between biases, such as how FOMO can amplify the money’s worth bias or how framing can enhance the salience effect.
However, you should aim to develop a relationship with customers that feels natural and pleasant rather than trying to take advantage of their cognitive biases. Since emotional relationships that result in loyalty are always stronger than money incentives.
Are you eager to put the idea into action? With the help of the cutting-edge, cloud-based loyalty system from Antavo, you can test your concepts and create incredible chances for customer interaction. Attend one of our demo sessions to learn more about it, or submit us an RFP for comprehensive responses.
Check out our Global Customer Loyalty Report 2022 for more information on what to anticipate from the customer loyalty market over the next three years.