Regular readers might remember my post on how marketers and copywriters can exploit decision-making biases in order to prod people towards a purchase. The post implied a rather one-sided perspective – marketers as ultra-intelligent arch-manipulators, consumers as dull-witted, ovine pawns. In reality, marketers are just as prone to shonky decision-making as everyone else.

Marketing has scientific and analytical aspects, but it also involves a huge number of subjective decisions where there is no single ‘right’ answer. That means that the way in which marketing issues are cognitively framed and considered can have a major impact on success. This post looks at some examples.

Bandwagon effect

The bandwagon effect refers to the tendency to do as others are doing. (If exploited for persuasive purposes, it’s normally termed social proof.)

We saw that Company X were using marmots in their outdoor advertising, and we thought we might try the same thing.

It’s not that every campaign or creative theme has to be utterly unique. It’s just that, in marketing, what’s good for the goose isn’t necessarily good for the gander. Each brand has (or should have) a unique personality and tone of voice, and bolting on someone else’s creative almost certainly won’t work. As in chess, you should never make a move without a reason – your reason.

Information bias

In some ways the opposite of the bandwagon effect, information bias is the over-valuing of information as a resource. When we fall prey to it, we continue to seek information to support a decision even when it’s no longer useful. The underlying belief is that more information is always better. It’s not.

One frustrating manifestation of this phenomenon in my experience is the gathering of many different points of view about a marketing strategy or tactic. Everyone has their say and the result is a mish-mash of self-contradicting opinions that generally leads nowhere.

Managers sometimes do this when they want others to confirm their opinions, and sometimes when they are genuinely unsure how to move forward. It may be better to go with one person’s gut instinct than the ill-considered reactions of six or seven people – views that were only formed because of an expectation that they should contribute.

Sunk costs reasoning

Sunk costs reasoning is making irrational choices in order to honour or justify your past commitments or investments. Imagine you’ve bought tickets to see your favourite band. On the night of the concert, you’ve got a stinking cold. Going out will not be remotely pleasurable or beneficial, but the tickets were so expensive that you feel you have to go.

This website doesn’t really reflect the services we want to push and it’s hopeless for SEO, but we’ve spent a lot on this redesign so we’re going to stick with it for a year or two.

There really is no point honouring the sunk costs in this type of situation. By spending more, you’re not ‘throwing good money after bad’, but recouping the earlier lost investment as quickly as possible. But often the psychological barriers are just too powerful.

Choice-supportive bias

Choice-supportive bias is the tendency to retrospectively ascribe positive attributes to an option one has selected.

I’m glad we chose this logo design, aren’t you? It’s so much more suited to our brand than the other options.

The psychological payoff of choice-supportive bias is that it reduces post-decision dissonance, or the worry that a wrong choice has been made. When a high-stakes decision has to be made on a subjective basis (as with the choice of a logo), it may be very difficult to decide which way forward is the best. Choice-supportive bias helps to ‘beef up’ a choice that may originally have been impulsive or ill-considered, making it seem ‘clearly the best’ or ‘obviously the right way to go’. In fact the other options on the table may have been equally strong, or stronger, and returning to them might be very beneficial. For example, the website design you rejected last year might be just right for you next year, and it already exists, so it’s free. But once we’ve rejected something, we find it psychologically very difficult to resurrect it as an option.

Status quo bias

Status quo bias is an irrational affection for twelve-bar boogie rock of the 1970s the way things are. People tend not to change their behaviour unless the incentive to do so is compelling. In marketing terms, this leads them to cling to established approaches, channels or creative themes just because they’ve used them before.

I’m sure nearly every marketing professional will have come across a client who’s evolved a piecemeal collection of logos, product names, website sections, imagery or content. To the outsider, it seems bizarre – but to the client, it seems completely natural (partly because of choice-supportive bias).

The antidote to status quo bias is to ask, ‘if you didn’t have this branding [or logo, or website, or brochure], would you pay to recreate it exactly as it is?’ If the answer is ‘no’, you should at least acknowledge that things need to change – even if you can’t afford it right now.

Omission bias

Omission bias is the tendency to judge harmful actions as worse or less moral than equally harmful omissions (inactions). In other words, people feel it’s better to do nothing and get a bad result than take action and get a bad result.

In marketing terms, omission bias usually translates into a desire to avoid or postpone investment in marketing even when such investment is clearly required.

We’ve decided to stick with the old website until next year and see how things work out.

In an environment where costs are an issue, refraining from spending is likely to be approved of by managers – even though it may be that marketing investment will bring sorely needed revenue. No-one ever got fired for saving money, goes the reasoning.

The remedy is to define marketing not as some sort of optional luxury, but as the generation of future cash flow. That will provide the right frame of reference for investment decisions.

Anchoring

Anchoring is the tendency to rely too heavily on one piece of information when making decisions. Faced with a complex situation with many aspects or variables, we home in on one feature of it and organise our thinking around it. For example, when buying a car we might compare on grounds of price even though there are myriad other factors to take into account.

In terms of marketing, the most obvious anchor (apart from the cost of marketing activity) is sales figures, which tend to dominate discussions about the value of marketing.

We paid for you to develop this campaign last year, and sales haven’t increased at all.

There might be many reasons for this. The value proposition, or value curve, may be fundamentally flawed. The price of the product may be wrong. The sales channels may be wrong. The service around the product may be rubbish. There are many problems that marketing can’t fix, and many factors behind the simplicity of your sales figures.

Or, setting dysfunction to one side, it may simply be that customers aren’t ready to buy yet. If you’re selling something like cars, or insurance, you must wait until the time is right for consumers to buy. Your marketing may have succeeded in implanting your brand in their brain, but they simply haven’t had the time or opportunity to act on it.

That’s why marketers emphasise the value of metrics such as brand recognition and market penetration to measure the success of their efforts. Marketing can be hugely effective in terms of raising awareness and building goodwill about a brand, without sales necessarily increasing immediately.

Of course, this cuts both ways. If you want to avoid the blame when things go wrong, you can hardly take credit when they go right, and the client says something like

Sales are up 75% since you developed our campaign. We’re delighted!

That could be down to changing consumer priorities, macroeconomic changes, a new sales force or just the sheer grunt of increased media spend. But that never stops creative agencies (and even some copywriters) quoting sales increases on their websites as if they were solely responsible for them. If only!

Tags: anchoring, bandwagon effect, choice-supportive bias, decision making, information bias, Marketing, omission bias, social proof, status quo bias, sunk costs