Six categories of behavioural biases that will help you successfully navigate consumer decision-making
As we delve deeper into behavioural science and human behaviour, traditional marketing models, based purely on demographics and market research, will take you so far, whereas behavioural science gets you to the real reason people make the decisions that they do.
The reality is that behaviour can vary dramatically depending on the context, making demographic targeting less effective. As David Ogilvy once said, the problem with market research is that people don’t think how they feel, they don’t say what they think, and they don’t do what they say. There’s a discrepancy between human intention and action, which suggests a much-needed shift towards understanding the behavioural patterns of consumers.
To help navigate the complexities of consumer decision-making, the METRIC system helps to simplify the purchasing process. METRIC System is our tool for harnessing the power of biases – snap judgements that help the brain make quick decisions in context.
It’s broken down into six key elements:
- Money
- Effort
- Time
- Risk
- Individuality
- Conscious Thought
Often we’ll default to one (or more) of these six categories because these are the resources we always have to ‘spend’. And these defaults are so well used our brains often judge them without processing ie. using System 1 not System 2. Presenting choices by using one of these six metrics can help tip the balance in communications.
Let’s explore them individually:
1. Money
Price and perceived value are undeniably important in the purchasing decision process. And two powerful and persuasive biases that can be leveraged are anchoring and the decoy effect.
Anchoring plays a role in people’s tendency to rely heavily on initial information when making decisions. Setting an initial price serves as an anchor, making any subsequent discount appear more appealing. A prime example is Aldi, which highlights the higher price of well-known branded products alongside its own less expensive equivalents, effectively setting a compelling price anchor that when compared to Aldi’s prices looks expensive, and this Aldi’s prices are better value for money.
In our work with Sharps, we anchored the audience on what freestanding wardrobes provide so that when compared with Sharps’ fitted wardrobes, the space-saving benefits of fitted wardrobes were clear and more appealing.
The Decoy Effect. This tactic is used to persuade buyers to choose between more than one option, especially when they are similarly priced and/or have comparable features and benefits.
A decoy is a deliberately priced third option, which is only there to make both alternatives more appealing, and it gets presented in a way that makes the preferred option seem more appealing.
MailChimp uses the decoy effect to highlight which of its subscription options it wants customers to sign up to. By including an inferior alternative to its Standard plan, but with just a $5 difference in price, it makes the price of the standard plan seem better value.
It’s important to remember that all values are relative. People can only judge numbers in comparison with other numbers. A hundred pounds more on the value of a car is nothing, but a few pence on the value of a litre of petrol can be a deal breaker.
2. Effort
Effort reduction is vital in influencing consumer behaviour. It’s in our nature to preserve energy where we can. Therefore having to work hard or think a lot can be a big barrier to making a purchase. The easier you can make the process for your customers, the more they’re likely to buy. To achieve this, two of our favourite biases include the Goal Gradient Effect and leaning on Perceived Effort.
The goal gradient effect is based on the theory that as we progress towards a goal, motivation increases. This makes loyalty programmes especially effective. By illustrating progress, such as with a visual progress bar, you can manage the amount of ‘work’ customers have to do, or how much longer a task will take.
A prime example is Cafè Nero and its loyalty card system: buy nine cups of coffee and you get one free. With the card, you get your first stamp, marking instant progress, which makes the end game seem more achievable.
Perceived Effort, on the other hand, is the amount of effort a consumer believes they need to expend to obtain a product or service. The higher the perceived effort, the less they’re likely to buy.
By streamlining the purchasing process, offering clear and concise information, and providing assistance or guidance, you can lower the barriers in the path to purchase. Amazon’s “buy now” button is a perfect example of eliminating unnecessary steps and simplifying the buying process to encourage spontaneous purchases.
3. Time
It’s human nature to value what we can see and experience now over something in the future. That’s why tools like Klarna are popular, as they give consumers instant gratification, without the immediate financial cost. Delaying the payment or spreading the cost is, from a cognitive point of view, putting a pause on that feeling of financial loss.
For our client, Pendragon, using the notion of time within communications is a key strategy. We play on the moments when people are most ready to start thinking about getting a new car. We lean on why there is a reason to act now through our marketing communications.
The behavioural bias known as Immediacy is where people tend to place more value on a small immediate reward over a larger one in the future. You can leverage Immediacy in the language used in comms, for example by creating urgency with phrases like…. “Now is the time to think about changing your car”.
Similarly, there are biases such as the Primacy and the Recency Effect. We’re far better at recalling information that we have heard at the beginning (primacy) or the end (recency) of an ad or piece of comms. This is why it’s really important to consider the hierarchy of messages and ensure what is communicated first (and last) is what you want your audience to remember or take from your marketing.
4. Risk
We are naturally risk-averse, often inclined to stick with what we know. This predisposition means that when faced with uncertainty, consumers are likely to refrain from making new decisions, favouring familiar choices instead. Reducing the ‘risk’ of committing to purchase, therefore, becomes crucial.
This explains the success of brands like Uber, who have masterfully reduced Uncertainty with their offerings. Realtime updates, locations, driver names, reg plates and photos offer total transparency and therefore instant reassurance, smoothing over all the issues that presented themselves in the previous process.
Another behavioural bias that plays on reducing risk, is Loss Aversion; which is the tendency to want to avoid any loss rather than achieving potential gains.
Our campaign for Checkatrade applied this principle by emphasising what the tradespeople are missing out on by not being a member, which was the amount of potential homeowners looking for their trade in their area.
Additionally, you can apply the Scarcity bias to communications. If something is scarce (in short supply) it is perceived to have higher value. This principle is used by retailers suggesting how many products are left in stock or hotels saying how many rooms are left to book.
5. Individuality
We are inherently social creatures, often seeking safety in numbers and relying on the actions and opinions of others to guide our decisions; if many people do something, it must be good. It’s this mindset that makes social proof such a powerful tool.
A key principle that can be used to take advantage of individuality is the Authority Bias, which emphasises the impact of experts or recognised figures on our decision-making.
For example, our work on the Well Pharmacy brand capitalises on the authority bias by highlighting the important role of the pharmacist, and the relationship they have with customers. Emphasising the pharmacists’ medical professionalism creates trust and credibility, and instils confidence in customers that they have made the right choice.
6. Conscious Thought
It’s impossible to process all the stimuli we’re bombarded with every day. Our brains conserve the energy for when it’s really needed. Therefore for the majority of the time we act on habit and autopilot. This makes us reliant on heuristics and susceptible to biases.
Think about how brands present accepting or personalising website cookies. Users are almost always prompted to ‘accept cookies’ via a brightly coloured inviting button, situated right alongside a less noticeable option to decline or explore data usage policies. There is still a choice for the consumer to make in these moments, but the way the information is presented leads users towards a preferred path.
The Affect Heuristic is where people tend to make decisions based on their emotions at the time. This is why using pictures of people smiling is powerful because it makes the reader happy too, and therefore receptive to other messages being communicated.
In a similar way the Von Restorff Effect is the principle that explains why old advertising campaigns are so well remembered. This bias works on the basis of distinctiveness and stand out, and if something is so different from everything else similar or comparable it creates a much stronger memory structure. And when emotion is added – so something funny or sad this connection is even further embedded. It’s why lots of people can easily recall the gorilla playing the drums ad – but can you recall the brand?!
Introducing behavioural science into your strategy
There is no one-size-fits-all solution to get you started on your METRIC journey. A/B split testing is valuable in helping you pinpoint which biases work best for your brand. One thing is clear – it’s no longer enough to rely purely on demographics and market research to align with your audience.
Behavioural science is the key to unlocking the full potential of your strategy and comms, focusing on the core principles of decision-making and ensuring that your brand resonates deeply with consumers.
The METRIC system is your key to simplifying the purchasing process, offering a suite of applicable behavioural principles designed to subtly guide consumer biases in your favour. But this is just the beginning. To unlock the transformative power of the METRIC System, contact our team. We’d love to help.