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The Digital Marketing Podcast
9 Digital Marketing Psychology Tips & Techniques
00:27:09
Daniel walks us through some rather clever marketing psychology techniques which can help you to secure more sales and improve your overall online sales results by making use of a number of cognitive biases. We discuss some of the ethical issues...
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A
Welcome to the Digital Marketing Podcast brought to you by targetinternet.com hello, and welcome back to the Digital Marketing Podcast.
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My name is Kieran Rogers and I'm Daniel Rolls.
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And today, Daniel, we're talking about the digital psychology.
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Not the digital psychology, but digital psychology.
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I'm trying to give it gravitas. It's the. The only digital psychology you need to know, and this is it.
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So what we're going to talk about is a series of cognitive biases. So these are things that we make decisions in ways we don't realize very often. And digital psychology tries to look at a whole different kind of raft of elements of kind of techniques that we can use. So it basically boils down to kind of three key areas. Digital psychology is neuroscience, which is the study of how the nervous system develops and how it reacts to things, which is very scientific. Behavioral economics, which is the study of how people make decisions without complete information in very many cases. And then social psychology, which is the study of how people think and act in the presence of others. So from that digital psychology piece, and we were doing some training on this recently, what we're trying to look at is analytics shows us what decisions people make in a lot of cases. So we can see where they clicked and all those kind of things. What we don't know is why they've made those decisions. Why did I click on that particular ad rather than the other one? Why did I search that particular search term? So a lot of the stuff in digital psychology tries to kind of answer those questions. And rather than just doing consumer research or market research, is the reality is that human beings have very little awareness of why they do things they do. And if you ask researchers about what they like or what they're going to buy, the responses are generally estimates. So what this is trying to do is try and say, okay, people make decisions in funny ways. What are the kind of rules of thumb that we can use? And we kind of refer to these as kind of cognitive biases. Now, I want to go through a series of these. They're little techniques or fun things that you can use. But we've also got to think about the ethical dimension of these as well, is that if we're trying to manipulate people's behaviors, that's not necessarily a good thing.
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Can I just challenge you on this? Because I'm. Cognitive biases. It's just too complicated a term.
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That's all it is.
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I know that's the correct term, but can we not simplify? I'm from the Isle of wight. We struggle with things like this. Let's simplify it.
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Rules of thumb.
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Rules of thumb. Now you've got me. You've got me there. We're with him, aren't we?
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So give you some obvious ones, first of all. So, scarcity. You see scarcity in a lot of different places. You see it on whenever you buy a flight.
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And.
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And it will say, here's the price of the flight. And then it will say, only two seats left at this price. You go, oh, it's in scarcity. I need to get that now before it runs out. What that doesn't tell you is actually the next flight price could be cheaper than this price. The next flight price could be a penny more. So the reality is that they're creating scarcity by using what hotels have used for years, which is called yield management. And yield management is changing your pricing according to the demand for the particular product. It's kind of supply and demand thing, but we use it as a kind of visual cue. So if you say something on Amazon like limited quantity available, you go, I better get that. A billion is a limited quantity. So in reality, scarcity is there to encourage us to kind of make this decision.
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See, I use cognitive bias of scarcity. Look, I'm trying, Daniel. I use this rule of thumb when I'm buying wine at the supermarket, because I don't know a lot about wine, but one thing I have learned, right, is that you look at what's on offer and you look at the one that's pretty much all gone. Because people that do know wine go for it and buy that offer, and actually you tend to get a little bit. Is that same thing?
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Well, it kind of is, but what I would say is that those people that buy the wine didn't necessarily know about it. And what's happened is the. That it's probably reduced.
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Yeah.
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And it always reduced from ten pounds to five pounds. And you go, well, if it was ten pounds, it must have been good. And it's called anchoring. It's one of the ones I was gonna do later, but I'll jump ahead to it now. I'm sorry. No, no, we'll do it now. It's fine. Cause anchoring basically is if something's reduced from £10 to £5, you go, well, it's worth £10. So if I get it for £5, that's amazing. There's no real fact that it was worth £10. Recommended retail prices are the classic form of anchoring in. The idea is that it cost this Much then. So it's worth, it's obviously worth more. You kind of set for me the other way of looking at anchoring is if you say going to a shop and there's something on special offer and it says limited to 10 per customer. And you go, well, if it's limited, that must be pretty good. People must be a bite of it for a lot of people. I'm not gonna buy 10, I'm not crazy. But I'll buy four of them while I'm here.
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Stock up, get it in.
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That's the reality. And what a lot of the experiments have shown is that normally if you put something on offer, people buy one or two of them, maybe three. Whereas if you anchor it by saying 10, the average person will buy 4.6 according to the experiment. So these are little things. This just changes how we kind of.
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A
Think the anchoring one is interesting. Just going to dwell on that before we zoom off because I think some of these things get abused. Like, you know, my big example of that would be Black Friday anchoring just gone mental. Because we all know that that plasma screen was never going to sell for 1500 pounds. And now it's only seven. We all know that was okay, they might have had it on to tick the box at that price, but nobody bought it. And if they did, oh my goodness, how upset would they be now? But do you know what I mean? I don't think there is another being overused a little bit, but it's really interesting.
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Well, I'll give you an example is that I won't buy anything in Gap now. So we buy a lot of our kids clothes for my son in Gap cause he grows at a rate of knots. And essentially we won't buy anything unless there's a sale on because we've got so used to, you see, 30% off and 40% off. Yes, that worked as anchoring first of all, but now it happens so regularly that doesn't work anymore. So actually if you do abuse these things, you break them from working in the first place. You've got to be quite cautious about how you do it. If you forever got a sale price on, then people know that the original price was never this original price and therefore they don't fall for it. So you've got to be careful, you use these in an effective way, not in a manipulative kind of way as well. So that's anchoring and that's also scarcity. A very commonly used one now is social proof. And social proof is the kind of thing when you go through to Facebook and you see a page being advertised to you or kind of company page and it says someone you know liked this. So what they're saying to you is that, well, it must be okay because someone you trust or someone you like has actually gone through and done this. You also see it on e commerce websites when it says 50 people have bought this in the last 24 hours. Well, they must have been right. And it goes through and says over 100 of them have been sold. Okay, it must be good. So it's that idea of just demonstrating what other people think. And a great example of this was on the TripAdvisor website. When you went to TripAdvisor, they used instant personalization to automatically log you in with your Facebook details. They could look up your Facebook friends and they could then say, okay, what reviews have your friends written? Because you're more likely to trust those. But they also showed you friends of friends reviews. So I would go in and it would show me a particular review and I wouldn't know who this person was. But then next to it it would say, well, this person you're on Facebook is friends with the reviewer. And you go, well, it must be a real review then. So it's quite powerful. Now there is a danger to that from a privacy point of view that you are potentially being associated with other people's opinions that you've connected to on Facebook. So for example, all those people you're friends with on Facebook that you don't really like, so for example, you went to school with someone really like them at school. Now you're friends on Facebook, you don't ever speak to each other, you are potentially being associated with their opinions. They might be a raving lunatic.
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Suddenly your mate Steve, who's an accountant, very straight laced, is associated with Mad Molly McNobble.
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There you go, that well known friend of his. So yes, it is a kind of challenge, but actually it does work really effectively because one of the problems we've got is there's so much content and there's so much noise that actually anything that can help filter that is really useful. That that was really the idea of Google because if Google knew what you were talking about, who you were connected to and what you're interested in, they could give you better search results. So they were taking some of this kind of data. But the reality is that no one used Google because they already had Facebook and LinkedIn and Instagram and all those other things. So let's keep on moving through these. Completion is One of my favorite ones, this was in LinkedIn for a long time. So they've taken out of the current version of LinkedIn. Maybe it'll come back. But it basically used to say how complete your profile was, and there'd be a little. Kind of a little circle that would fill in. And the more full your profile was, the more this would go up and it give you a little rating. And my one said All Star. And I felt quite pleased with my All Star badge. But you could never get to complete, really. And it was a bit of a game because essentially it was impossible to get to 100% even if you had everything possible filled in.
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I'm sensing you tried.
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I did very hard. And it was so competitive. It's gamification. So essentially what it's doing is it's encouraging you to reach the next tier. But there's been some experimentation done with this. And if you go to many coffee shops, they will give you a little loyalty card and maybe it's got nine little stamps. And as you get a coffee, each of those is filled in. You get free coffee when you get nine. So an experiment was done to basically go through and say, right, you go into the coffee shop and you get your loyalty card for the first time, and the barista stamps it twice and gives you a little wink. And they're like, there you go. There's your two stamps to get you going, versus just giving you one stamp. You are more likely to take that card through to completion because you've got two stamps, because you're on the way. I think the wink might have had something to do with it, but another experiment was then done to take this a stage further. So what about, Instead of having nine, there were 12 things you needed to stamp, but when you printed them, you printed the first three filled in already, and then when the barista gave it to you, they just stamped one. So actually, in this case, you've actually got less technically, because although you've got four things filled in, you still need another eight, whereas in the other circumstance, you actually just needed seven to be filled in. More people went on to complete the one that had four stamps on it because of as we're progressing towards a goal completion, it felt like I was in there. That's exactly. So we like to complete things once we've started. So we'll connect this in a moment to another one of these biases as well.
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I'd like to know if you had 12 and. And the barista stamped four of them and winked at you. Whether that would.
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I think you'd be a bit overwhelmed at that point as well. It would all get a bit much. They were flirting with you a bit too much at that point. Bit too weird. This brings us on to another one, which is consistency or commitment, which is. I'll give you an example. If you go to HubSpot website, they're very clever at this, they give you lots of gated content. So you go through and they say, here's an amazing piece of content and then you can download that content, but you need to fill in a form. So what you do is you go through to their landing page and the first thing it will do is I'm ready to download. So you click on the I'm ready to download button and when you click on the I'm ready to download button, it then scrolls the page down. And rather than just downloading it immediately, what it actually does is get you to fill in the form. But because you've committed by clicking on the button, you're more likely to fill the form in, whereas if they just presented you with the form, you might not fill it in. So you've basically committed to starting a process and therefore you're more likely to complete it. Now, there's a really cheeky thing I've seen some research into recently, which was with supermarkets, and essentially what more and more supermarkets doing is putting the bakery near the front of the store. Now, there's a psychological thing about nice smells and baking bread that obviously has an impact, but also, if you go into the supermarket, I'm healthy eating, I'm not going to buy any rubbish and I'm only going to buy the bare minimum stuff that I need. And you go in and you're committed to doing that and you start doing that, you won't spend too much money because you'll just buy the things that you need. If you go in and you're a bit hungry and there's a lovely smell of bread and you pick up some cakes or some bread, you're then likely to splurge on other luxury products as you go throughout the store. So you've kind of committed, but you're the best predictor of your future behavior is what you've already done.
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Oh, my goodness. So I'm not a freak.
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No.
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Other people are just like me.
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Yeah.
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This is such a. This is good.
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So you go in and it's a bit cheeky because what they're basically doing is manipulating you to get something to make you spend more money overall. So. But supermarket's done it for a long time was putting the milk at the back of the store so that you had to go through. But consistency basically says once you start doing something, you're more likely to commit. So if I can get you starting to do something in an easy, non frictional way, it doesn't get in the way, you're more likely to continue doing it. Right, and let's move on to the next one. The next one is one of my favorites, is loss aversion. Key thing is, we don't like losing things once we've got them. So just to give you an example of this, in many parts of Africa you'll find that people have multiple SIM phones and what that means is that they're not subscribing to an annual contract, they'll do as a kind of pay monthly deal and they'll move between different networks based on whoever's got the best deal at that particular time. So what it means is that you don't get a lot of customer loyalty because of that. So one of the clever things one of the big mobile phone companies did over there is they say, okay, what happens is that if you stay a subscriber for 3 months, you get access to the equivalent of kind of Spotify. So you get all this free music streaming, but if you then don't stay a member for a month, you go back to zero and you have to be a member for three months again before you get access to it. So it creates loss aversion. Because if you've been a member for three months and you've got access to this kind of free music streaming stuff, you're very keen not to lose access to that and, and therefore you stay loyal customer and it's had a huge impact on their kind of bottom line.
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From that point of view, I can recognise that my wife was a loyal orange subscriber for years and years and years and she wouldn't refuse to move because she's got, well, I've got friends and family discount, I've got those numbers. And also the 241 on the cinema, I don't want to lose that.
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Right. And that's it. And actually when you work out how much that's saving you really it's not a very logical decision necessarily. The other way you kind of see this being done is with driving licenses. Sounds very odd. So in the uk, on your driving license, when you do something bad, you get points and you build points up and if you get a certain number of points, you lose your license. Which is not a very clever thing because you're accumulating something for doing something bad. So actually it becomes a bit of a bragging rights. Oh, I've got six points in my license. I'm a bit of a crazy driver.
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Do you think people gamify that?
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Well, you could the other way around. Because in Italy you start with a number of points.
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Okay.
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And then you lose them.
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Yeah.
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And a lot of the evidence in the particular studies, and we'll put all the links in the show notes to all these studies that I'm talking about, show that actually when you lose points, you are more inclined to then actually stop and think about it.
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Yeah.
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So they just turn it the other way around. It's just a little bit of gamification, but it's that cognitive bias of loss aversion. So confirmation bias. This is really interesting because this is essentially something we've been talking a lot about, which is kind of social media bubbles. You know, one element of this social media bubble is that if the algorithms in Facebook and places like that show you more of the stuff that you really liked, you're just going to see the same stuff all the time. So if you love Donald Trump or you love Hillary Clinton back in the election, you would just see more of their stuff and it would give you that kind of confirmation bias. You'd see the same stuff.
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Kind of scary prospect on both of those.
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Yeah, right. And the reality is that there's another element of this, though, that is kind of missed, that's probably just as important. And it was a study at Ohio State University that said that you'll spend 36% more time reading an essay if it agrees with your opinions. So what's happening is we're being shown more and more of the same stuff, but always that agrees with us and then we're more likely to actually bother spending time reading the stuff that we agree with.
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There's been a bit of coverage on that with the elections in the uk, hasn't there that? Because more and more people are getting their news through social media. They only ever get to hear the people perspectives and the points of view, the things that they agree with. And it's interesting because it does create a bit of an unintended bias.
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I guess it does. Well, I mean, both, all the social networks, I mean, Facebook have said they are going to, they are trying to change the algorithms. This doesn't happen as much, but in reality you can kind of play with this. So if you want to try and change someone's mind not just about anything political, but about a product or a service. They might believe that your particular brand isn't great, or they believe this type of product is too expensive. For example, you can start by agreeing with them and you can kind of play the negative. So you could say something along the lines of, this brand is a very expensive brand and whatever it may be. And then they start reading. They're more likely to read on. And then you start saying, but actually, you could kind of go off in this direction as well. So just bear in mind, people are more likely to read something they agree with. So if you can get people to agree with you, they're more likely to read your content as well. There's another play on this one, which is called the frequency illusion or the Bide Meinhof effect, and this is a little bit more obscure. Whoa, whoa, whoa.
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The what?
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Bideh Meinhof is named by the people that came up with it in the first place. It will be in the show notes Bide Meinhof. So basically, this is when you see something, you then see it everywhere else as well. And you think, well, it wasn't there before, but it's really because you just started noticing it. So, for example, this happens a lot with people when they're pregnant. So if a woman is pregnant, she will suddenly start noticing all the other people that are pregnant. And you go, well, this is just weird. Everyone seems to be pregnant. Must have been something happening a few months ago, or not happening to maybe. But the key thing is that actually is because your bias and your mind is focused on something and you're more likely to notice it from that point of view. So if, for example, you notice a certain brand and you become interested in that brand, you'll suddenly start seeing that brand in lots of places. And it's not that it's showing up anymore. It's just that there's a bit of a frequency illusion with those things as well.
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Well, that's really interesting because that links back to what we were discussing in an earlier podcast about display advertising and how it has this magical halo effect that's very difficult to measure. But you just. When you do it in, you know, on volume, it has its effect.
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That's it. And I think if you can hit, you need to work out what the sweet spot is, how much you need to show someone something where it kicks in, this kind of frequency illusion where they start noticing it more. Because what that means is that the future advertising, the other content you do will get more visibility. So again, this is one of those kind of cognitive biases. That has quite a big impact.
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I'm so excited. I just want to get out there and start casually mentioning the Biden Meinhof effect again.
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If you want to mention any more of these, we'll put them in the show notes targetinternet.com podcast there are huge amounts of these and I found a really great blog post that lists loads of them. So I'll send that through as well. Just a few more as well. One that you see a lot is the idea of the decoy effect. Now I'm going to put a video in the Show Notes from National Geographic where this kind of a great explainer of this. But basically if I offer you a product and I say that the medium size is the small ones, maybe $5, the medium one is $12, $12 is quite a lot. I'll just go for the $5 one. But then if you put a large one in and say that one is maybe a few dollars more than the medium one, but it's twice the size, you go, well, I'll buy that one. And the key point is you probably wouldn't have spent that much money, but one of the other prices has anchored you and it's kind of decoyed you to look at the other price so you can set different pricing levels. And one of the places you kind of might notice this is when you're buying technology products and you've got a number of different options. So if you're buying an iPhone or an Android phone and they've got different memory options, and what you'll end up with is one that's got a very low amount of memory and it will be quite expensive. And then you've got one that's got a huge amount of memory that's ridiculously expensive. And then you want that's got a medium amount of memory that's only just a little bit more expensive than the really cheap one, you think, well, I'm getting double the memory just for a few extra dollars. The basic, the low price one there is to decoy you and make you actually say, well, I might as well buy the more expensive one, the actual cost of putting that memory in is probably pennies. It doesn't cost a lot, but there's a number of different price ranges there to kind of decoy you as well. So look out for it. I'm not saying you should use these, by the way. I don't need them to confuse people to use them. But just be aware of them when you're looking at kind of digital stuff you're dealing with.
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I think the interesting thing is we've all been there with that particular one and maybe it's just me, but it's kind of fun. It makes the whole thing a bit more fun somehow because you're trying to beat the system. But actually, are you just trying to beat an artificially constructed system that's designed to get you to do what they wanted you to do?
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Absolutely. And really we talked about the decoy and we talked about the idea of setting this kind of price, so you've got an anchoring kind of effect as well. The two kind of play together.
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So my question would be, who wins there though? Who really wins?
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Well, the person that's selling you. Then it's got yourself bought something more expensive than you really wanted because you think you're getting good value, but it's perceived value rather than real value.
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Oh, but do they? Well, long term, do they?
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Maybe not. I mean, maybe actually having a phone with more memory makes a lot of sense anyway.
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Or just give people more of what they want.
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That's quite possibly.
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I'm just over generous, I think.
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I think the reality is as well is that too much choice is a bad thing. There are too many options. You don't choose anything where there's a sweet spot for giving people options. So if again on your websites you're giving people options, don't give them too many. If you look at what Apple do beautifully, is that when you're selecting all the different options, the colors and the memory and all those kind of things, you kind of go for a workflow that means it doesn't seem like there's that many options, but there are quite a few different ones. Now the last one that I'll talk about is priming, and this one's really interesting. We'll put more details in the show notes as well, but it's not always easier, easy to apply, but it definitely could. We could do some experimentation with this. So if I just kind of read out some of the stuff for the experiment. So basically, people are faster in deciding that a string of letters is a word when the word followed an associatively or semantically related word. So let me give a quick example. So you mix loads of letters up and they get people to try and work out what the word is. So for example, the word nurse, if you mix the letters up, is recognized more quickly if it's followed the word doctor than it does if you just read the word bread.
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Right.
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So what this basically means is that you're primed up to think in a particular way by reading certain things or seeing certain things. And the effect of priming can last from 15, 20 minutes up to a couple of days with some if you've been reinforced or not enough to have a constant impact. So for example, if there's an experiment here that said, if you prime people with words around individuality, solo different myself. So you play them some music that's got those words and you show a poem that's got those words in something like that, if you then put them into workshop environment, they are less likely to conform with other people's opinions when they do a task, they try to set their individuality more. So from an advertising point of view, this is huge because basically, if you can start to suggest something to someone and say how important a particular feature is, so you can say it's very important. There's lots of research that have been done, this particular feature is really, really important. And then you go, oh, by the way, we've got this feature so you can use your advertising to prime up the importance of something. And then when someone drives to your website, you don't need to sell it on that point, you just demonstrate, we have got this particular thing. People are more likely to think that's important. So very interesting one, not so easy to apply, but actually worth thinking about in terms of how you make the connection between your ads and your landing pages, what's the messaging in your ad and then what do you need to put on your landing page to reinforce it? So all I would say is don't just say the same thing in both cases, but try and reinforce around the same themes. So there's an opportunity then to get people thinking in those particular ways.
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A
I guess it's an interesting tool to use. And like any tool, it depends what you do with it, isn't it? But with some of these techniques, I do get slightly uncomfortable and I'll tell you why. Because there's a very fine line between doing things for your customer and doing them to them. And for me, it's like I've used the analogy of a knife, aren't they, they're really useful knives, but you can also stab people with them. So it doesn't make the knife intrinsically evil, it's how you use it and what you what, what you use it for. And I guess, yeah, it's just the integrity in me. Little alarm bells go off and how these things are used and what you're actually trying to achieve. Because greed, greed is a Terrible thing.
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B
Well, I would definitely say that a lot of these could. I mean, I don't like the scarcity stuff you see everywhere, which is only 2 left at this price, it is blatantly manipulative, whereas social proof is useful. What if my friend did like it? Actually, I trust this is a real review. For example, completion gamification, I think is actually. Can be quite fun.
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Yeah.
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And you can do it in a playful kind of way as well. Things about consistency, like getting to click on a button, then filling in a form, I think that's fairly harmless. I don't. I think it's just, you know, it's just trying to increase your conversion percentage by a small amount as well and things like loss aversion, trying to give you something for free to encourage you to stay loyal. I think that's great as well. But I think you're absolutely right. When you get into kind of decoy pricing, when you get into anchoring and things like that, it is a little bit. It could be very manipulative, in fact. And I just think about this from a branding point of view is that there is more and more authenticity from brands that are transparent. If you are very transparent about something, people trust you. And with digital transparency is a bigger and bigger thing. It's very much easier to kind of see under the bonnet of these things as well. So be aware of them, arm yourself as a kind of consumer yourself, see which ones you can use practically and then just be aware of them and just say, actually, we want to avoid this one. It might be good to know so you can actually avoid it from that point of view.
- [25:32]
A
I think there's another opportunity, potentially, particularly in the world driven so much by content marketing, which is to expose some of these practices and point out that you don't do it. Do you know what I mean? This is kind of like actually in the transparent world, that could be tremendously, tremendously powerful.
- [25:49]
B
I think that's it. And I think that particularly in E commerce and things like that, if you were selling flight and you would say this is the price and it will be this price until we sell out, then actually you're creating a bit of urgency by doing that, but you're making yourself very transparent by doing it as well. So there are opportunities for actually avoiding some of these techniques and that being a positive thing as well. So come through to the show notes Targetinternet.com podcast to find out more. There are hundreds of these things and they're all very, very interesting. And we'll give you some video examples and so on the website as well. So thank you for listening to Digital Marketing Podcast and we'll see you again soon.
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