25 COGNITIVE BIASES
WHY ARE PSYCHOLOGICAL COGNITIVE BIASES SO IMPORTANT TO YOUR MARKETING SUCCESS?
You as an entrepreneur have to possess certain skills that are crucial to your success. One of those great skills is “investor mentality” which is directly correlated with success – a large percentage of self-made billionaires are investors!
The number two skill on my list would be the focus (this is not a “black and white” list, these skills can be turned around and there are other attributes that are also incredibly important).
The number three skill on that list which we will cover here would then be persuasion. As I am writing this, there are just over 7.5 billion people on this planet, which creates an enormous social pressure on resources (biggest of all time). Basically, everybody wants to be at least financially independent, if not wealthy – it’s very difficult for everyone to reach that level.
Persuasion is your ability to move these 7.5 + billion people from point A (where they are right now) to point B (where you want them to be) – we are not naïve enough to expect that we will persuade every single person.
The beauty of the current situation, however, is that there are so many people, that no matter how crazy your idea might be or how small your niche you think you may be targeting, you can probably persuade at least a million people to buy something from you and achieve financial freedom by doing that – keep in mind that by you being one of those 7.5+ billion people, you are “fighting” for the same resources as everybody else.
If your average profit on the sale is $50, you can get about 50 million dollars – for some people that can happen just in one year, for others it will happen in their entire lifetime (which is still good enough to live very well).
The average person right now is probably making around a million dollars in their lifetime, while you can probably make at least 50 million dollars. In that sense, persuasion may be more important than focus and investor mentality.
Persuasion is obviously a huge topic, which is why we will only cover one element of it in this article – cognitive biases.
Repetition is a very important part of persuasion – some of the things that we are going to cover are quite obvious but if they are important enough to be said once, they are important enough to be said a hundred times and be worth remembering for a lifetime!
Our brain needs a certain volume of information to be repeated in order to break the white noise. When you hear your “inner voice” say “I have heard this before”, that means that it is just starting to become a part of who you are.
Dalai Lama in his book “Beyond Religion” talks about the three types of learning:
- Hearing about something – when you first become aware of something
- Contemplating it, understanding it
- Making it instinctual, making it a part of your identity – of who you are.
If we are all competing for scarce resources than the business can actually be compared to a war. In order to win at it, you have to constantly be repeating great ideas into your mind and implementing them which is the third type of learning according to Dalai Lama.
In the Poor Charlie’s Almanack by Charlie Munger, Charlie talks about these cognitive biases that we are going to learn about today.
Just like with friends, you should have continual interactions with the books that you are reading. Reading them only once is not going to be enough. The same principle applies to you selling to your customer – you have to repeat certain things to them over and over again – don’t pay attention to that small percentage of people that don’t like to be repeated to and always want to hear something new.
The most successful restaurant chain – McDonald’s has the same sign and the same design in every restaurant that they have, they want to have identical restaurants all over the world – that is another form of repetition.
The environment in which you are selling is very important to understand. After identifying your customers and understanding their personality type (practical, action, social or emotional), you have to understand cognitive biases, triggers or modalities (people have different names for them).
Even some of the best persuasion books don’t talk about the different environments and how they are changing your persuasion strategies – if you are selling on a stage, the persuasion strategy is going to be different than if you are selling 1 on 1. Some strategies are only effective on stage and are NOT effective 1 on 1.
The strategy also changes if we are selling on the phone, through text messages, e-mails, infomercials, and websites – this is frequently called copywriting but there are also other elements, not just the words that you use (colors, fonts, design…)
The most natural environment is selling in person, which is why so many people are good at it (compared to selling in other environments). If you are selling on the phone, people can’t see your body language but if you are selling through e-mail, they can’t even hear your voice, which is why it’s trickier to sell that way – the strategy changes!
If you sell on a stage you have a certain natural authority just by you standing up there higher than the rest. Being an authority is one of the cognitive biases, another one is a social bias which also occurs when you are on stage because everybody is looking at you.
When your prospect is looking at you and they see that you are on stage speaking to all these people, the probability that he will buy something from you increases (authority + social bias). By saying that somebody is selling “on a stage” this doesn’t just apply to selling on a stage, the same thing applies when you are being presented as an authority in your market.
By selling 1 on 1 you lose some of the authority because you are no longer on stage and you lose social bias because your prospect doesn’t know that you are popular – he can no longer see hundreds of people that are paying attention to you.
When you sell on the phone (and this is a very popular way to sell to your clients, prospects, vendors, employees) you lose a lot of authority.
An example would be if Donald Trump called you on the phone right now – you may be blown away for a few seconds but after a while it wouldn’t be such a big deal because he doesn’t have the same authority as he would have in person, you can’t see his body language and face mimic, social cues are also lost because nobody else is giving him attention – your subconscious mind would perceive him as an average person after a two-hour conversation after you got a bit more comfortable.
Half of the battle is just awareness in terms of persuasion – you just have to learn this while it’s easy even if you perhaps don’t need it right now.
Another thing that we have to keep in mind are the rewards – a reward of you learning how to sell on the phone or through a website is MUCH bigger than the ability to sell on a stage because you can do it anywhere and anytime while you need to organize an event at a specific time to sell on a stage. You can travel wherever you want and have a phone call from there – with a website and e-mails it’s even easier!
As Elon Musk says – “you get paid in direct proportion to the difficulty of problems you solve.”
As you become persuasive in any environment that you find yourself in, you will get larger rewards! Most people only teach how to sell 1 on 1 or on the phone, which is why you can easily differentiate yourself.
With SMS (text messages) you also don’t get a lot of authority and social bias working for you but the reward is bigger because it’s very convenient, however, you may have trouble closing big deals with this method.
Right now the society is doing some sort of cocooning – in the 60’s you had to answer your phone because you didn’t know whether your mother is calling or if it’s anyone else, which is why telemarketing worked very well – everyone picked up their phone.
The first element of cocooning came with the answering machine because people could leave the phone ringing and still know who called – then they would just return the calls that they wanted to return.
You as a business person will have more and more trouble with actually reaching people as people take cocooning to the next level – they only reply to Instagram and Snapchat messages if they want to and in some cases, they have to accept you first as friends or you go to a spam folder.
Cocooning is relatively convenient for you, it’s convenient to your prospects, and it gives you a huge range!
E-mail is currently the most convenient way to reach someone – even when business owners give you their cards, they expect you to e-mail them. E-mailing is also a ticking time bomb – it is the simplest way to reach hundreds of millions of people with the push of a button but because it’s so simple to do, it’s difficult to stand out in that huge unopened inbox that people have because they received hundreds of e-mails per day.
Pretty much all businesses have their websites now – it’s a lot less time consuming than phone conversations, it’s more convenient than any other sales method such as 1 on 1, and it always works for you.
The future of business is e-commerce! Walmart is trying to compete with Amazon because they didn’t quite perfect the digital marketing world like Amazon did – they are spending tens of millions of dollars on their website strategy.
Previous US President Barack Obama was very good with e-mails and copywriting which is why he raised the most funding money and created a lot of engagement.
You can also Google Barack Obama e-mail strategies to find some valuable concepts such as the optimal amount of e-mails that you send – which is 3-7 per day. Some people don’t like that and they will unsubscribe but this is still more successful than sending out less than 3 e-mails per day or more than 7.
The people that stay subscribed read your name and your ideas so often that it sticks with them if they see in this case 3 e-mails per day from you – one of the biases is inertia or consistency bias.
Dictators such as Adolf Hitler used this bias incredibly well – they created a propaganda machine that continually bombarded cognitive biases of his followers – of course, your goals should be positive and you should be empowering people.
Copywriting is becoming more and more important – it’s about scripting the words for the purposes of persuading people through e-mails, websites, phone scripts or in person scripts.
We live in a world of reciprocal altruism (instead of building your own house and grow tomatoes, you earn your money and pay people to build you a house and deliver food) – any industry and any business that you have will need to sell a product or a service to other people and copywriting is currently the most efficient way to do it – your ability to use words to persuade other people to become your customers will determine your income!
Amazon is currently an amazing example of using cognitive biases on a website – they have split tested a lot of things and perfected their strategy over the years (Jeff Bezos has made a lot of money very quickly).
Also, you have to become more aware of the words that are being used to persuade you EVERY SINGLE DAY! An average person sees more than 2,000 commercials per day, so successful companies have to perfect their strategy and use cognitive biases very well! Sam Walton, the founder of Walmart was a learning machine – everywhere he went, he would analyze what other people are doing to persuade and to sell more.
The great thing about a website is that it works 24/7 – it sells all the time and never gets tired, never needs a break, doesn’t quit or needs a vacation – it’s by far your BEST employee!
It certainly is important to have a great looking website but loading speed and words are far more important than the design.
When they say “get it by Thursday, Aug 3”, they create urgency bias – are YOU using the urgency bias to your advantage? Are you giving deadlines to people? Amazon is also being very detail oriented – “if you order in the next 4 hours and 29 minutes, you get same day delivery.”
Most people’s websites don’t have any urgency and are not detailed – stock photography that is found on most websites is not congruent and detailed, it’s just generic.
Amazon also says only 4 in stock for each product that they sell – and below that it says that they will order more right away. That is called modulation – the reason why selling on stage may be difficult is because there are all kinds of different personalities on the crowd, so you have to appeal to more personalities. The same principle applies to websites because all kinds of visitors come to your websites, so you have to appeal to a lot of people. If your selling strategy is all about appealing to practical people (very logical), you will alienate yourself from social and emotional people.
Action-oriented people don’t want to miss out on anything, so you have to use urgency with them which is how Amazon persuades you with saying “only 5 in stock” but then they modulate by saying that they can always order more.
There are always simple mistakes to be found on most websites – contact and maps must be easy to find for local businesses, show star ratings (and reviews) to appeal to social people, and pictures appeal to emotional people. A good example is also the fact that Amazon shows free shipping and how much do you save using discounts, which appeals to practical people that are generally cheap.
The key principle here is to modulate – appeal to all personality types, otherwise, you will lose a lot of potential customers. Casanova called this principle – being the chameleon. Being a chameleon is not about lying or being manipulative, it’s about appealing to a broader audience because they all browse your website.
You can’t delegate what you don’t know – even if you plan on hiring a copywriter, you still have to know quite a few things to make sure that the outsourcer did a good job.
The first thing that you have to do for any copywriting project is a hook or a headline. You can always improve this part – the hook is the most important part of copywriting.
Every human brain has some sort of a bouncer – a mechanism that blocks ideas from entering the more important parts of the brain that will require more energy and the hook is your way to get around the bouncer because the average person sees around 2,000 ads per day. That mechanism has to work very hard to stop all those ads from wasting that person’s time and energy. Some people now automatically don’t pay attention to anything new – which may not be a good idea. That’s like the bouncer saying that nobody gets in unless he already knows you.
The same problem arises with Hollywood actors – agents only work with people who are already famous but people can’t get famous without an agent.
You can just Google “famous hooks” to get some examples – bestselling books almost always have great hooks/headlines – 4-hour work week and How to Win Friends and Influence People are two great examples.
David Ogilvy said that writing a hook is 70% of the battle – the right hook really will make you millions of dollars!
You can have the greatest articles of all time, however, David Ogilvy says that if you don’t get your hook right – you are WASTING your time!
For e-mail marketing, your hook is the subject line. For dating every guy wants to know the best pickup line in the world – they are asking for a great hook they can use. Tim Ferris tested hundreds of hook ideas before finally deciding on the 4-hour work week.
Just like with every activity when you do it for thousands of hours, you get intuition. For athletes after countless hours in the gym, they get muscle memory – Michael Jordan also didn’t have muscle memory for his first training, he probably didn’t score a lot of baskets back then either but he trained and got better.
There are very few skilled copywriters in the world and in order for you to become one, you have to practice before you have an intuition about how to write an amazing hook.
Tim Ferris wrote hundreds of hooks/titles for his book and then sent some clicks to each of those titles to find out which ones convert best.
The best hooks tend to be relatively short. A famous Ogilvy hook is “At 60 miles an hour the loudest noise in this new Rolls-Royce comes from the electric clock.”
Relatively short doesn’t mean just a few words, this example had almost 20 words – but the hook can’t be 10 sentences long, the general rule is maximum 2 sentences.
You should also be using relatively simple words with just a few syllables – when you use complicated words, you are going to lose a lot of customers. Remember that a confused mind doesn’t buy!
To get some ideas watch the great speeches in history. You have to study – go to bed a little bit smarter every day as Charlie Munger says. When you learn these concepts go straight to the top by watching only the best speeches and the most successful websites rather than reading a random article.
Tabloids and magazines have great titles – they might not offer valuable advice but they know how to grab attention and make people buy them. You have to learn this regardless of your job – even if you are the CEO – every business needs persuasion.
In the 25 cognitive biases, the most effective one is the reward bias. Whenever you are not persuasive enough, increase the promised reward (while still not overpromising).
The greatest scams of all time promise rewards that they can’t deliver but are persuasive enough (because they promise big rewards) that a lot of people try them.
If we, for example, sell a weight loss product, we have to use at least 4 basic strategies to appeal to 4 different personality types.
We appeal to practical people by telling them that we have decades of experience, we work with the greatest experts on this topic, and that instead of buying expensive supplements or product only costs you $1 per day.
We appeal to action-oriented people by telling them that their metabolism will start to change as soon as they start with our product and that you can only help a certain amount of people at once, so they should order now not be left behind.
We appeal to socially oriented people by telling them that they don’t go out as much because they don’t like to be judged or embarrassed by other people, that research has shown that skinnier people get more dates, and have more friends! It will be amazing when they go to a 20-year high school reunion and get complimented that they have NEVER looked so well!
Lastly, we appeal to emotional people by telling them how they will feel when they finally lose that extra 20 pounds and can finally look themselves in the mirror with confidence.
It’s still better to write a little too high of a reward than not doing it enough – the results will be much better.
Also, notice that in our copywriting formula we haven’t even begun to mention anything about us! We didn’t say who we are that how awesome we are – we bypass the bouncer first and then POUND on the rewards that people will get by investing in our product.
Late night commercials are also worth studying!
A lot of people like to see stories, reviews, and testimonials that people wrote about the product. Don’t use stock photography – use real specific examples, for example, helping a 213-pound 43-year-old woman lose 20 pounds in 3 months with her before after pictures – she previously tried 4 diets that didn’t work, she has 3 kids, and now she is finally happy about the way she looks!
David Buss has some great books about evolution and why we are the way we are. Our brain has evolved based on the selectivity of our great-grandparents – almost everyone is great at listening to stories. Stories captivate people!
A great rule of storytelling is being specific to paint a mental picture – people want stories and pictures because we are wired that way. You don’t have to modulate stories because every personality type likes them – this is one of the few universals of persuasion.
Once some individuals figure out how to illustrate good stories, TV was revolutionized – movies and TV series are now huge, and Hollywood is very wealthy.
You can practice your persuasion skills by reading a book and then record yourself with your phone reviewing the book – persuade other people to buy it with your video (you can earn affiliate commission by doing that). If you don’t want other people to see your videos, just privately upload them.
These principles can be applied anywhere – you will hire and retain loyal employees, get a good deal buying a house, get the best lawyers… copywriting and persuasion will get you a long way!
DO NOT FORGET – after the hook, promises of reward, and stories, have a CTA (call to action)! Every article or digital document should have a CTA – it may be to buy something, it may be to subscribe to an e-mail list to gather information about people.
ADVANCED COGNITIVE BIASES IN MARKETING
There are classic 4 P’s of business:
- Promotion – Marketing is HUGE!
A lot of people want to know which one of these four is the most important one in business. Most of the time it is the promotion.
If you understand the 25 cognitive biases, your persuasion skills will dramatically improve!
If you understand the 25 cognitive biases, you will be the person who teaches other people about marketing, you will not need to be subscribed to all kinds of courses and newsletters because you will know more than they could ever teach you – so instead of subscribing to other “masters of persuasion” you will be the one teaching them (if you want to)!
Unless people are making 50 or 100+ million dollars per year, they don’t completely understand these biases – they might understand some of them but they are not masters in all of them!
- Reward and Punishment Superresponse Tendency
- Liking/Loving Tendency
- Disliking/Hating Tendency
- Doubt-Avoidance Tendency
- Inconsistency-Avoidance Tendency
- Curiosity Tendency
- Kantian Fairness Tendency
- Envy/Jealousy Tendency
- Reciprocation Tendency
- Influence from Mere Association Tendency
- Simple, Pain-Avoiding Psychological Denial Tendency
- Excessive Self-Regard Tendency
- Over-optimism Tendency
- Deprival Super reaction Tendency
- Social-Proof Tendency
- Contrast-Misreaction Tendency
- Stress Influence Tendency
- Availability Misweighting Tendency
- Use It or Lose It Tendency
- Drug Misinfluence Tendency
- Senescence Misinfluence Tendency
- Authority Misinfluence Tendency
- Twaddle Tendency
- Reason Respecting Tendency
- Lollapalooza Tendency – The Tendency to Get Extreme Confluences of Psychological Tendencies Acting in Favor of a Particular Outcome
Charlie Munger did NOT invent them, but he is one of the most well-read people, so he was able to implement all of these based on the countless books that he read. Some of the cognitive modalities are grouped together (which in some cases isn’t the best idea), otherwise there would be more of them. Robert Cialdini was working on them a lot as well – some of them are described in his material.
Lollapalooza Tendency is the best modality for you to increase your net worth – The Lollapalooza effect is the way to build a great business with big profit margins.
As we mentioned earlier, the average person sees anywhere from 2000 to 7000 adds every single day!
Recommended book: Purple Cow by Seth Godin
If you would get in the business in the 1960’s there would be so easy to make money as long as you had some starting capital – you would just have to come up with a pitch and place an add on TV (because there was no competition, nobody was doing that at that time), but that strategy unfortunately no longer works!
If you look at the 100 biggest brands that existed back then, about 70% just used TV – they had a lot of capital, so they constantly pushed their brand forward and because everybody was watching TV, it worked very well!
That strategy does NOT work anymore because there are just too many ads that are bombarding people every single day.
We are unable to compete with the biggest companies – TV ads won’t work for us because these corporations can spend billions of dollars on perfecting their ads and getting them in front of everyone!
Nowadays, people see what they want to see – we mentioned the cocooning effectbefore – cocooning is a nightmare for marketers because people can just skip through ads whenever they want.
You as the business owner have to use this effect to your advantage – using just one of the cognitive biases is NO longer enough! You have to learn how to use a combination of these simultaneously to persuade your potential customers.
A good example of this is described by Warren Buffett and his business partner Charlie Munger. They still read for multiple hours per day learning about persuasion and marketing and even though they are experts on the topic, they refuse to attend auctions – it’s a lot better to organize an auction than to attend it.
Because you are going to make a mistake! You will get persuaded to buy something that you don’t need and overpay it!
Because auctions are using the Lollapalooza effect on everyone that attends them and wants to bid on the items. They use the deprival super-reaction tendency also called urgency (“going once, going twice”), the authority bias (a person standing above you who is like a preacher talking to you), social proof (we follow the others when we don’t know what to do), and we also have the availability bias (we buy whatever is in front of us, rather than buying a better deal another time).
They also show us what we want which is one of the most powerful modalities – the reward bias.
All of these modalities are influencing your brain even if you are just sitting there.
Once you are getting 3 or 4 cognitive biases working against you, it is almost impossible to win and get a good deal – even multibillionaires like Warren Buffett have problems in an environment such as an action.
A similar situation happens in car dealerships when people come to buy cars – you as a customer only buy cars once every couple of years, while trained salesmen have to deal with that situation every single day – you will always lose when you buy a car.
From now on analyze which cognitive biases are being used on you in every situation – turn it into a new habit!
“Whatever I am selling, I am creating a Lollapalooza effect in my client’s mind.” – THIS SHOULD BE YOUR NEW GOAL!
People will buy from you if you have the ability to do that – it is that simple. Without the Lollapalooza tendency, you are done, even if your product is the best because you are constantly competing against at least 2000 images that people see every day
Even if you and your product are the best, you are being bypassed in their brains, they will NOT even notice you.
REMEMBER – some people see as much as 7000 ads per day. They will not know you even exist and will not give you enough attention to find out if your product/service really is good. You absolutely must get better than that if you want to grab their attention and compete with so many ads.
Whenever you are NOT selling enough, whenever your marketing is bigger than what you are making off of it, the place to start is to up the reward.
If you are going to remember anything from reading this article, remember to INCREASE THE REWARD!
Most marketers fixate themselves on a feature or they talk about themselves and their company while they should market the reward – one of the ways is to have before/after pictures (P90X before & after commercials that show the end result).
People often focus on the feature, not on the reward – people don’t care about the feature.
Like Stephen Covey says in The 7 Habits of Highly Effective People – “begin with the end in mind.”
If people are learning from you, learning itself is not the reward – the rewards are the results that will happen to them after they are done learning.
Do NOT make it about you either – the authority bias is not as strong as the reward tendency. A much better strategy is telling them where they will end up when they get your product – the end result that your product delivers.
Make sure that you have before-after results on your homepage of as many people as you possibly can! By doing that you are showing both the reward AND the punishment – the punishment is the before picture that unconsciously tells them that they will have the same results as long as they postpone buying your product, while the after picture shows them the reward/results they are about to get when they invest in your product or service.
If you think your reward is high right now – try to multiply it by 10 – then you will be making a lot of money.
You should feel slightly uncomfortable about the amount of reward that you are offering – it may seem too much for you as the business owner, but it’s not too much for your clients.
If you ever watch infomercials, you know that they go crazy on the reward bias – they show incredibly good-looking people and their incredible results (P90X commercials are a good example) even if in reality most people who went through that training don’t look anything like that.
Gary Keller in The One Thing says that we can NOT focus on multiple things – you will innovate an advanced marketing plan AFTER you are making 10 million dollars per year, for now just focus on these basics!
Become ABSOLUTELY OBSESSED with cognitive biases! Become analytical and always point them out whenever you see ads, commercials, auctions or a salesperson.
You’re showing them the fat person, and then as a reward, the fit person, it sounds so simple, yet so few people are doing it.
We can not keep attention on multiple things – get good at promotion, by understanding this (become obsessed with this) your marketing will be amazing.
The goal is to get your mind focused and in tuned.
If Adolf Hitler said that 2+2=4 and Oprah Winfrey said it was actually 5, most people would go with Oprah because they like her and Adolf must be wrong. Just because you may not like someone, it doesn’t mean he is not right – the people that you like can easily take advantage of you if you let this tendency control your decision-making ability.
When you are marketing your product/service you must be likable because if you are not likable, people will buy from somebody else that they like. This will happen even if your product is better.
In the financial world, people do business with people who they play golf with, the deals are done on the golf court.
Even if you give the best analytical presentation in the world and then try to persuade them, people will still go with their golf buddies unless your product is at least 5 times better which is not likely to happen. If you have 3X better product than their golf buddies that still won’t be good enough for them – they will prefer their friends over you!
The question is – how well are you conveying that you are a likable person and that you have a likable business?
Hilary Clinton is a very smart person, but many people dislike her personality – if people don’t like your personality in politics and business – you’re out! Increase your likeability factor!
A good book to read in order to increase your likeability while making sure that people don’t hate you is – “How to Win Friends and Influence People.”
Also, instead of trying to constantly read new books – read the top 100 books over and over again! The books that you read are just like friends – your strategy should be to get a few truly amazing friends that you see frequently who you listen to very carefully rather than listening to hundreds of acquaintances when asking for advice. Listen to fewer people, but listen to them more intensely!
We like people that we think would sacrifice themselves in order to give to others – we know this from the evolutionary psychology.
One strategy that will help you achieve this is using direct matching keywords – “listen, my primary goal for this business is NOT the money. I care about people like you and I want to help you by…”
This may sound counter-intuitive and too simple but you have to remember that you are dealing with the subconscious mind, not the conscious mind. It may sound cheesy to you but people who can convey likeability will inevitably get ahead and statements like that truly make a difference in ensuring that your potential customers won’t dislike you.
Get to the point right away – “my business is far from perfect but we truly care about people like you. I will go the extra mile – I will be available on Saturday and help you out because this is not just about me making money, this is about me changing the world for the better.”
Doubt-Avoidance Tendency – as an advanced marketer you absolutely MUST master removing doubt from your prospect’s brain!
If your voice conveys doubt, your potential customer will become doubtful as well. The second your customer starts doubting you, he will not buy – “a confused mind doesn’t buy.”
Sentences like “I’ve done the math for you, I built this program because I’m 100% sure it works as long as you’re the right person for it” do a good job for doubt avoidance – you can put the disclaimers on the bottom of the page to make sure that everything is perfectly legal.
Be certain and sell something you are certain that will help. You need to be able to say to the president of your country that what you are selling is without a doubt the best thing for your clients.
“If it doesn’t work, you’ll get a refund – that is how certain I am.”
You can offer all sorts of different guarantees and refund terms – the reason why you should do those is to convey how certain you are that your products are amazing.
Frank Kern was giving away free sessions and if they thought it was not worth the time, he would give them $1,500 – Frank was very certain about the knowledge that he was sharing with people on these consulting calls.
You make your money with whatever is in your mind, everything else can be bought.
Richard Branson has several companies – Richard understands whatever business he launches and he is extremely certain about it. Then he uses his capital to employ other people to execute the business plan for him. Execution is important but thinking like a self-made billionaire is even more important.
Inconsistency-Avoidance Tendency – it is about being congruent
If you sell candy bars for 7-year old’s but you have a website with the design that fits 40-year old’s that won’t work very well for you.
Every element of your marketing strategy must be consistent and congruent with your core message.
Commodity businesses are all about competing with price, focused on operational efficiency, and cutting down the costs. Walmart focuses on operational efficiency – they make fractions of a penny on every bar of soap they sell and they have an enormous revenue because they are very cheap.
Brand name businesses, however, are not about saving money. Ferrari costs you $200,000, while you can buy a great Mercedes-Benz for $40,000. Ferrari is NOT 5 times better than Mercedes-Benz!
The vast majority of people reading this are in the brand name business. Make sure you do everything high-end – your entire marketing message should be about offering premium, expensive, and luxury products that offer amazing results!
Warren Buffett’s company Berkshire Hathaway INC. has a website that looks like it was built in 2001 but that also means that Warren is “old school” and is saving money even when it comes to web design.
He is staying consistent with his identity – he is just about making more money (Warren also refuses to invest in the technology companies because he does not invest in what he does not understand) for his shareholders and it reinforces his brand. His outdated website design actually works in his favor because Warren stays congruent no matter what – even if the company is worth hundreds of billions of dollars he still refuses to invest $1,000 into a better design.
The question is – are you always staying consistent in whatever you are doing?
Your business must create curiosity for people – they must be wanting to know more and more. David Ogilvy said that marketers have to inform people which means you should convey messages they have never heard.
The tendency that you must eliminate is saying all the things that people have already heard before numerous times because it kills curiosity!
If you are sending out a daily newsletter, make sure you have new content in order to ensure that people will return to you. If you are not sending daily newsletters, you are most likely losing money in any business – as I am writing this, big corporations are STILL leaving a lot of money on the table by NOT implementing these strategies!
Generally, a customer that makes you $100 will cost you $100 for the initial ad, which means that the only money that you are actually making is with loyal repeat customers that come to you over and over again.
It has been scientifically proven, that what keeps people most attracted to someone ismystery – they must keep thinking that there is more to you that they don’t know yet.
Always keep your potential clients hanging just a little bit. If everyone already knows everything about you and your services – they will get bored very easily.
There is, of course, a fine line – you must give people some value, but as an example, if someone gives you 5 out of 25 things that you need to know about a particular topic that you are interested in, you will certainly come back later to get more. People will only get angry if you don’t give them enough value before using the curiosity tendency on them – if you just briefly say something on the topic and then immediately want them to buy something expensive.
Most businesses never learned how to convey curiosity around their products and now they just write “visit our website for more info.”
Instead, they could say something like – “guess what Aloe Vera did to 3 cancer patients in California last week – click here!”
Ask people to listen to your marketing pitch and if they heard it before – cut it out! A lot of ads don’t work simply because people have already heard everything they have to say many times.
Always have something new, something interesting, something that is currently the cutting edge!
Kantian Fairness Tendency – Kantian explained why a 300-pound bodybuilder still stands in line behind the old lady (he could easily push her aside and be first instead of wasting his time waiting).
We appeal to the sense of fairness – we want the world to be fair. It is connected to the reciprocal bias. Sam Walton used it in Walmart when he gave away free sample hot dogs, so people would then buy his hot dogs. They knew the statistic of how many people buy hot dogs if you give them one for free. Reciprocation is about wanting to give back to people that gave us something. 3 to 1 ratio tends to work very well in marketing – give people three things before asking for one action in return!
If you are selling a product online, give people 3 free gifts before you ask them to buy the product.
In McDonald’s and coffee shops, they give you the internet for free. People also bought more products if they got free physical products beforehand (free books when buying an e-book, free knives when buying a survival newsletter.)
Ryan Deiss has a very successful survival business where he basically says – “I’ll give you $50 knife for free if you pay for shipping (sounds fair),” and on the next site, they would upsell their product.
They gave you something that was worth $50, and got you to buy something for $15(they got the knife for $5 from China and they sold you something that was 3 times cheaper than the free knife that you got – 3:1 ratio), and they are now one of the most popular companies that sell knives. They found out that if you give people free physical products, it works even better than giving them digital products (e-book, video lesson).
This is similar than the reciprocation tendency, so we are going to describe these two together. Kantian fairness can happen before somebody does anything, reciprocation can only happen after someone has done something for you and now you want to return the favor – somebody gives you a free gift, you want to pay it back by buying their product.
Envy/jealousy Tendency – one of the most powerful emotions is envy. That is the feeling that you get when you see people that have what you want!
Donald Trump is selling his hotel rooms, and apartments. Donald shows people his lifestyle, his wife, and all the luxury that comes with being a billionaire. You have to balance this tendency because if you overuse it, people won’t like you – Mr. Trump sometimes took it too far and a lot of people don’t like him because of that. Too much envy triggers dislike tendency which will backfire on you.
The program called The Rich Jerk was focusing primarily on this cognitive bias – The Rich Jerk was showing off about how rich he is and how dumb everyone else is, so they should listen to what he has to say and buy his program that will hopefully make them money.
This modality is like salt – you will ruin the entire meal if you add too much of it, but you need to have some of it because it works tremendously well.
Remember that your goal should be to use it along with other cognitive biases. Do not just use this one while forgetting about the other ones – the ultimate goal is to use multiple ones in order to create the Lollapalooza effect that will exponentially grow your business and create you lasting wealth.
Influence from mere Association Tendency
Michael Jackson signed a lifetime contract with Coca-Cola for around one billion dollars (they later killed the contract because of certain legal issues) – he only had to hold Coca-Cola in his hand on the stage. He did not even have to say anything about it. People started associating Coca-Cola with Michael Jackson – they loved him so they also loved Coca-Cola.
Who are you associating yourself with?
Even if you cannot afford to pay celebrities to be around you, you can still quote them. People will start to unconsciously associate you with the individuals that you quoted.
“We want to be around things that are around things we want to be around.”
I want to drink Coca-Cola because Michael Jackson drinks it and I want to be around him.
The question is – how can you associate your products with people and corporations that are above and beyond yourself and that people already trust?
The world is being increasingly run by celebrities because of two very important cognitive biases:
- social proof
- association bias
Is your company highly associated with the things that people want?
Having pictures of yourself is fine but unless you are very famous you should also get at least local celebrities around you – they do not even have to be in your niche, just the fact that people can see you with them goes a long way.
Famous restaurants have pictures of celebrities that have eaten there.
Influence from mere association tendency is closely connected with the social proof tendency.
There is a reason that all these huge companies would pay billions of dollars just so the celebrities can hold their products in their hands. You may not have millions of dollars to get the most famous people but you can start with some local celebrities.
The mere association is just about finding out what your ideal customer wants you and your products to be associated with.
A simple example is an insurance website with an America flag which sold a million dollars a year more just because they knew that their customers are family patriotic people.
This simple example shows you that you do NOT have to be just associated with celebrities, you can use logos, flags, and other symbols that mean something to your ideal customers.
Social proof, on the other hand, can be achieved as simple as having lots of testimonials on your website. You can NEVER have too many testimonials – the ideal number is “infinite!”
You can make your website in a way where more and more testimonials open up as your visitors scroll down on your website.
Female fish wants a male to be the brightest color available but if they are the same color, they go with the one that every other fish chooses, they do not even make their own judgment! They just make a decision based on what other people chose. We listen to the advice of other people!
How many testimonials are currently on your website?
If possible, have 10,000 of them! And don’t forget about the associations – display images of good feelings, patriotism, and celebrities along with testimonials for social proof in order to hit both cognitive biases at once.
You need to modulate with association tendency as well because if you only use celebrities rather than mixing them up with “ordinary people”, your customers might think it only works for celebrities. People want to be like celebrities but they also realize they will never be like them – at least most of them won’t.
Modulate your marketing in a way which shows that your product doesn’t just work on Brad Pitt and Arnold Schwarzenegger – it also works for the average people.
Simple, Pain Avoiding Psychological Denial
There is a sad story where a mother who lost her son in a war couldn’t expect that he was killed. Whenever someone asked her where her son was, she said that he will be back – her answer remained the same for over 20 years. She was in denial.
All of us struggle with the fear and uncertainty of life and we deal with it with psychological denial. Make sure you use them ethically and only sell amazing products – do not use them like fast food restaurants who sell bad products and make people unhealthy. Build a Pareto efficiency with them which is a win-win deal between you and your customer rather than building a Pareto inefficiency, which is a win-lose deal where your customer loses (in the fast food industry their customers lose their health by purchasing their products) – their clients are people who are in denial.
If your promise to your customers is that they will lose 200 pounds in a month, some will still say “well, maybe I will!” The same thing happens with people who believe that they will be millionaires with no skills or experience in a week when they buy something – they are all in denial.
Use this one just like the envy tendency – use it a little bit. If you overuse it, you will create an unethical company that makes the world a worse place.
Fast food restaurant chains use psychological denial unethically because people think they can get something that is healthy, fast, and very cheap at the same time, just like their commercials show.
They find Olympic athletes and attractive celebrities that act in their commercials even if it is obvious that only unhealthy and overweight people eat there – if they are not unhealthy, they soon will be.
Do NOT be so foolish to think that LeBron James or Neymar Jr. actually eat at McDonald’s. Nobody can stay healthy eating there, and the chances of someone being a professional athlete with that diet is flat zero!
Excessive Self-Regard Tendency – 70% of drivers think they are above average.
That is also a pretty big problem with dating sites – beauty inflation is a principle where guys who are not good looking and would NEVER in their life talk to beautiful women in person, think they are much better than they actually are, so they send 10 messages to those women.
This tendency should also be used very lightly if your goal is not manipulating people. You can say something along the lines of “you are amazing and with my products, you will be able to bring out the best qualities that you have.” This works simply because everybody wants to tell their story about how amazing they are.
People want to cheat or still just enough to have the advantage and not so much that they would feel bad about themselves. A very powerful way of making people like you is appealing to their pride/ego.
Don’t over-do it but people have excessive self-regard and easily fall for this tendency unless they are a celebrity that is already sick and tired of people who constantly compliment them. They want to believe that they are above average and special. If you appeal to that need, they will more likely purchase your product.
People are generally over-optimistic and some companies take advantage of that. More than half of Americans are overweight, so they sell them a pill that promises them they will lose 40 pounds in just one month while showing testimonials. This surprisingly works very well because people are naïve and very optimistic.
It is fine to play on people’s optimism but be careful – ethics will quickly fly out the door when you overdo it.
Deprival Super-Reaction Tendency
“Going once, going twice, going three times” are magical words for humans. These are the exact words that are used in all auctions where people make mistakes and overpay for a product that they don’t even need. You can use this tendency a lot.
The reason why you can use this one a lot and you should be because people frequently need to be pushed and motivated to take the right decision.
Life is not a game of chess, it’s actually a timed chess game – there is nothing wrong with pushing people with this modality because the life is short and they shouldn’t be hesitating!
You can be giving away bonuses on the checkout page and every 30 seconds you remove a bonus from the list. If you know you have the best product at the right price use this – people will not procrastinate this way, they know they need to buy now. You have to understand that people normally procrastinate a lot which is why you need to up the urgency in a massive way!
TV Commercials are using it all the time – “if you buy this today, you will get…” Limited Time Offers!
Appeal to people’s sense of procrastination – “if you don’t do it now, you will never do it. What is the upside of buying it tomorrow? You will spend money on things you will not even need until then.”
Look at your landing pages – if there is no urgency, you are losing a lot of money!
A good athlete reacts from muscle memory, these cognitive biases have to be instinctual for you just like that. Sports and Martial Arts are about instinctual movements, there is no time to look at your notes or a book in between these movements.
“You get wealthy by selling one core thing over and over with diminishing costs and without the erosion of profit margins.”
As a dentist, there are no decreasing costs but you have to be there which is why they are not making millions. Their time is limited and their appointments will always take the same amount of time – they simply cannot get wealthy that way!
Continuously look at your websites and make sure that you are giving people a reason to buy today instead of letting them think about it and then letting them purchase tomorrow. Use urgency at all times.
CONTRAST MISREACTION TENDENCY
An average person spends $33,000 of debt on a car and they probably planned to spend $25,000.
The reason why a car salesman always wins when you buy a car is because he is practicing every day, and you are doing it just once every 5-10 years – “You are already spending $25,000, that is only $300 per month, why don’t you just get the upgraded stereo, it is only $15 more per month?”
The salesman used contrast because he did not actually tell the price of the upgrade. He compared $25,000 with $15 which is completely inaccurate because you will have to pay $15 every single month for years! It sounds like a good deal but that stereo will actually cost you a lot of money in the long run! Even the wealthiest people are afraid of being tricked by trained salesmen.
Bill Gates and Warren Buffett were in Warren’s old car and they ran out of gas, so instead of calling a taxi, they saved money. The two richest men in the world were walking with a gas can on the highway. Warren Buffett bought a car over the phone, and he bought a used one that had some damage for half of the price – even he didn’t buy it in person because he didn’t want to get scammed by overpaying a car.
When clients come to see your offer, you want to contrast huge things with small costs which can also be called price minimization. $1 per day sounds a lot better than $30 per month!
If you sell a weight loss product, you should find a proven statistic about how much money will overweight people lose because they will get sick over the next 10 years, be unhappy, not spend time with family, and struggle with relationships. Your $497 product is nothing compared to that!
In this example we didn’t just contrast the price – we also mentioned health problems, time that was lost, and relationship issues that will lead to a lot of pain.
Focus on the benefits that are better than what the competitor is offering – if you are selling sports cars, you must sell them on the speed. Ask them – “do you want to have this horrible family car that goes 60 miles per hour or do you want this luxurious sports car with 500 HP? Just imagine the way they are going to look at you while you are driving in your red Ferrari!”
But if you are selling Toyota Prius, you should be talking about all those stereotypes of arrogant guys that have sports cars that are destroying the environment while showing them a nice family guy with his family owning a Prius while the environment around the house looks very fresh and green.
Have a checklist – which of these tendencies are you good at and which are you currently ignoring?
Stress Influence Tendency – related to deprival tendency
Timeshare – they give you a free trip to Disney World, using Kantian Fairness (cognitive biases cause stress, and when people are stressed out they just do something, they make a decision – they buy something.) Salespeople want to put stress on their customers as much as they can, so they can sell them a lot of things!
When car salesmen say “I have to talk to my manager” they go somewhere and get a drink while they make you wait for 30 minutes so you are stressed out and when they come back and you ask them for a better deal they will say again that they need to talk to their manager once again. Since you don’t want to wait for another 30 minutes you just take the current deal.
The way to create some stress is to pace the pain – hitting on the pain point.
“Let me tell you a story about somebody who didn’t take my advice. I told her she must lose weight, but she didn’t… she lost her husband, couldn’t sleep, then fell asleep while driving and hit a tree…”
Paint the picture – creating stress for your customers is good as long as you are moving them towards something that is good for them and you use ethics.
Availability Misweighting Tendency – this one is critical!
You can have the best product in the world, but if it is not easily available and simple to buy, almost nobody will purchase – the steps must be easy to follow and the buy button must be easily seen.
99% of people log to their dating site because of the e-mail they got that someone sent them a message. You have to understand your customer – they work more and more hours, they are stressed out and are too lazy to even type “dating services” in Google. They just sign up for what’s near them, because it’s available and easy. You have to follow up with them at least 3 times per week through e-mail responders.
Apple has it so simple – they have so much empty space in their stores so you can see what you need to see. Avoid having websites that show 50 different things and confuse people.
Even though your brain only weighs 1%, it uses 25% of the energy even if you don’t move at all – it needs sugar, calories… Instincts are made in a way where you don’t use a lot of energy – your brain doesn’t appreciate complicated things that use a lot of glucose, it wants things to stay simple.
If the font is too hard to read if the colors are confusing if your mind doesn’t know what to focus on… people won’t bother to use a lot of glucose to research your confusing website.
When you are introducing yourself or your ideas, use simple words and explain what you do in one sentence or most of the people won’t even bother understanding you.
“4-hour work week” is a good marketing idea – it is very simple to understand. Your business should be easily understandable!
Ask your grandmother to read through your copy – if she doesn’t understand it, change your website, brochure or your pitch!
Use it or lose it Tendency
This tendency is not very relevant specifically for marketing, it’s more important for your personal life or maybe for you as the business owner. It says that you will make mistakes in anything that you don’t use very often – if you don’t use it over and over you will forget it.
You have to read books again and again – your mind is like an addict, it gets full and continually throws things out. Continuously have important things in front of you to make sure you have them on your mind and improve them or they will slowly be forgotten.
Make sure you implement every important concept right away or you will forget it.
It’s OK to have long marketing (we like to twaddle), people like content, they watch stupid and long TV Shows about people talking without any value whatsoever and a lot of us are still hooked on these things. Meeting the Kardashians has a lot of content, it’s entertainment, even if it offers NO usable value.
If you don’t like to write, then record more content. People want to get to know you! If you want to record a 5-minute video, record a 20-minute video, if you are thinking about recording either a 20-minute video or a one-hour long video, record a one-hour long video.
Longer content almost always beats shorter content (it will make you more money) – long videos, long e-mails, long articles…
Reason Respecting Tendency
We often think that people won’t buy our products for various reasons – another person has a better one, it’s too expensive… Robert Cialdini – Influence (book.)
When a person cuts the line and doesn’t say anything, 9/10 people get angry, when a person just said that they are in a hurry (horrible reason) fewer people would get angry.
Give them a reason why you should buy ahead. Even saying that “if you buy from this competitor you will get cheaper donuts, but I am awesome and you should buy from me will make everything a lot better.” That is a terrible reason and it would still work better than if you wouldn’t say anything!
A human brain is really not good at this, people don’t use logic a lot! Tell them what you are not good at, say you don’t have this and that, but you made a product which is amazing.
Explain ahead why they should buy from you and why they shouldn’t buy from a competitor. It removes uncertainty. People will buy from you if you give them a reason!
It doesn’t even have to be a good reason – it will still work.
“This Prius is not faster than a Ferrari, it is a lot slower, but it’s better for the environment, you won’t get as much parking tickets, you won’t have to stop every 10 miles for gas, it is a lot cheaper…that’s why you should buy my Prius.”
As you get better at this you will create the Lollapalooza effect.
Pick at least 5 of them to implement them in your marketing campaign even if you are just trying out different products. You MUST memorize them and use them as soon as you can to start practicing persuasion.
25 cognitive biases are also very well explained in the Persuasion Accelerator program by Tai Lopez. You can read more about it here.