 As humans, we just make bizarre, illogical, irrational choices all the time. Welcome to The We Are Slam Show where we share marketing agency insights, best practices and ideas to help your business grow. My name is Tyler Kelly, and I'm the co-founder and chief strategist here at Slam Agency. We're based out of St. Louis in Miami, and these are some strange times, aren't they? I was talking to a friend just a few minutes ago, and I said, you know, I think I'm just going to shut down all of my social media and just like go on detox for a while. And the reason why is because there's a lot of people out there just saying some crazy things, and you know, if you get caught up in that, it has a tendency to bring you down and just to, you know, destroy your day. And so as a marketing director, as a leader, you know, it's all about staying focused, staying on point and knowing that all things are going to work out for your goods. And so it got me thinking, you know, as humans, we just make bizarre, illogical, irrational choices all the time. And why is that? Well, let me tell you, our brains are wired to create shortcuts and rely on patterns to make quick judgments, okay? This is, you know, our brains aren't always like running at maximum capacity. What happens is we create patterns. If it's predictable, you know, our brain is going to shortcut to it. And this is called heuristics. These are the mental shortcuts that our brain patches together. Now on the flip side of this is something called cognitive biases. And I'm sure you learned about this in psychology or, you know, in a course in high school or something like that. But the thing is I really want you to be aware of this as a marketer because cognitive biases will make or break you not only in your personal life and the way that you make decisions, but in the way that you market. The good news, though, is that these irrational behaviors are not random, okay? In fact, they're super predictable. So if you're aware of these cognitive biases, then you'll be able to notice them more often when they're happening. And then at some point, after noticing them more often, at some point, you'll be able to make a decision to do the opposite thing, to break that pattern. So today I'm going to reveal the top seven cognitive biases that, number one, you should be aware of, and number two, that you can use ethically in your own marketing in order to drive results. Are you ready for this? Number one is the anchoring effect. So what this means is that we rely heavily on whatever the first piece of information is that we become aware of in order to make subsequent decisions, okay? This is also, if you're familiar with Halo Effect, it's really similar because what happens is we have this first impression, this first bit of information, and then it really guides all of our future decision making. Now as an individual, you should be aware of this because that first impression isn't always going to dictate your future experience, okay? As a marketer, here's how you can utilize the anchoring effect. You need to realize that the first thing that your customer hears, the first thing that they see, the first experience, the first touch that they have with your brand is more than likely going to influence all subsequent interactions with your brand. So what do you do? Make a positive first impression. Do everything you can online and offline to be aware of those initial touch points and how people are discovering you, how they're coming across your brand, and make sure that those touch points, that those experiences are top notch, knowing that once they've experienced your brand for the first time, they're going to define you by that experience. Another way that you can do this in a sell situation is to refer to your competitor's higher pricing first before you mention your own, okay? What it's going to do is it's going to set an anchor that that person's mind through the shortcut process, this cognitive bias, that person's mind will continually refer to that higher price point when thinking about your price point. Number two is the ambiguity effect. And what this means is that as people, we're risk adverse, we want to lean into the familiar. We want to stay away from unknown options. This is clear as day right now with everything that's going on in our world. In times like this where there's uncertainty, where there's ambiguity, we would rather avoid making decisions, whether that's getting back to work or reopening society, we would rather push that off because of the unknown, because we're not clear as to what the results will be. This is the ambiguity effect. And so how do you take advantage of this in marketing? How can you utilize this ambiguity effect in marketing? Well number one is to realize that anytime there's confusion, anytime there's confusion in your service offerings or your product offerings, what's going to happen is people are going to retreat. They want to lean into the familiar. They don't want to go with the unknown. What does this mean? Anticipate any knowledge gaps in your marketing. If there's a knowledge gap, you have to anticipate that. In sales world, this is called objections, right? If there is a potential sales objection, you have to be ready for it. You present the solution to that objection before it even happens, right? On your websites, in your marketing collateral, you do have to anticipate these objections before they happen because you don't have that face-to-face interaction. And because 70% of all buying decisions are made before somebody even reaches your website or picks up the phone to call you, you have to anticipate these knowledge gaps in your marketing collateral and in your content. And then I know a lot of you like to do this, but don't overload your customer with jargon, with details, with things that don't matter, which things that they can't comprehend. If you think that you're talking over somebody's head because it's going to get you the deal, I can promise you that it won't. And the reason why it won't is because of the ambiguity effect. So keep it simple, stupid, all right, kiss. Number three is the familiarity bias. And what is this? It's that the more people see you, the more they like and trust you, okay? We know as marketers that people do business with those that they know, like, and trust. And so the familiarity bias is how you can kind of begin to build that trust. So how do you do this? Well, you're looking at it. You're watching it, right? This is how in action as marketers, we can build familiarity. We can do it by jumping on a video call. We can do it by posting in social media, by being a solution. Really, the more that people see your face, the more that they will trust you. So get out there, produce content, produce videos, write blog articles, put your picture up there and be seen. The more you invest in thought leadership, the more that you put yourself out there, the more likely familiarity bias will kick in and people will begin to like and trust you because they're seeing you more. Number four is the bandwagon effect. And we've all seen this one in action, whether it's a championship run for the Stanley Cup or for the Super Bowl or something like that, or whether it's Bitcoin and how as soon as it takes off and gets popular, everyone jumps on the bandwagon. Whether it's Beanie Babies, remember those in the 90s how it was just like this big craze. And that's the bandwagon effect. People like to jump onto a bandwagon and get involved in something when they see other people doing it. How can you take advantage of this in your marketing? Talk about your customers say, here's a group of our customers and they're doing this and this is something really cool, check it out. What you'll do is you'll begin to generate this bandwagon effect. The more you talk about and share testimonials, the more social proof you provide, the more you share testimonials. This is how you generate the bandwagon effect. Super powerful, always show the prospect who your customers are, what they're doing and how they're benefiting from your products or services. Number five is the confirmation bias. Now this is probably one of the most powerful cognitive biases. It's also one of the most dangerous because what happens is we love being right even when we're wrong. And so what our brains do is when we've made a decision, when we've taken a stand on something, whether it's true or false, once we've taken that stand, our brains will seek out supporting evidence and you've seen this a lot. When you make a decision on something, when your mind is made up, then what you're going to do is you're going to, and this almost happens unconsciously, but you're going to go to the web if there's any sort of disagreement, you're going to go to the web and you're going to seek out supporting evidence that supports your position. Whether or not your position is true or false, it doesn't matter. What matters is that this is a tendency, this is a bias that we have. And so what's the dangerous part of this bias? The dangerous part is that we push off any competing information, any information that would say, yeah, your position isn't exactly correct. We push that off and we subconsciously ignore it. And this is very dangerous if you're not aware of confirmation bias because it can kind of put you in a box that you don't want to be in. So confirmation bias, in short, is the tendency to confirm what we already believe to be true. You know, if you remember Robert Cialdini's Six Principles of Persuasion, this one would be consistency, right? So as a marketer, how can you ethically invoke confirmation bias? Don't try to change your customer's minds. I know that sounds like a crazy thing, but it's really quite simple. Don't try to change your customer's preconceptions. Instead cater to them. So I learned long ago that if there was a certain product or service that I believed in, but that the customer or the prospect didn't, it wasn't worth my time to try to convince them. It just doesn't work out that way. You'll always lose that battle. So cater to their preconceptions and figure out how to reimagine your product or service in a way that fits their worldview. This is the way to work within the confines of confirmation bias. So how do you do this? In a sales situation, you have to understand your buyer. You have to understand where they're coming from and you have to stop and listen. Take notes and turn off your own confirmation bias for a while and really get to know your customer. Number six is sunk cost fallacy. You know, on my Facebook last week, I posted about this bias, about this fallacy that I had been struggling with. I had invested a lot of time, money and energy into a certain program. And I just had this, this pit in the bottom of my stomach and this gut feeling that I just had to set it aside. And sunk cost fallacy is this tendency when you've invested time, money, energy into something, it's this tendency to want to follow through on it. And we all have this. And when you're aware of the sunk cost fallacy, then you're able to make intelligent decisions. And in my case, my decision was to put this particular program to the side, knowing that even though I had all this cost already into it, all this time, energy and money into that particular program, that it wouldn't benefit me long term. And so because of that, I had to put it aside. I had to ignore that sunk cost fallacy, see through it. And move from a place of power. And so sunk cost fallacy is a marketer. Well, as a marketer, maybe there's some programs that you've invested in. Maybe there's some techniques that advertising campaigns that you continue to invest in. And you think, I've put so much money, so much effort into this program, eventually it's going to pay off. Here's the thing, that might not ever happen. And sunk cost fallacy is this lie that we believe in our minds that says, yeah, it is, it's going to happen. It's going to happen at some point. Just keep investing. See this through, follow through on it. And that's going to get you in a lot of trouble as a marketing director. On the flip side, how can you use this in the marketing? Well, here's the thing, encourage small commitments rather than asking for everything up front. Ask for a name and an email. Send questions to potential prospects. Have them consider these questions. Have them do some homework to learn about you and your product. Do a better job of qualifying. If you do this, you're going to invoke a sunk cost fallacy and you're going to do it in an ethical way. Finally, number seven. And this is a relatively new one, but I actually love it. And it works really well in marketing. Number seven is the IKEA effect. And essentially what this is is anytime we invest time in building something, that we're going to value it more. And so as a marketer, how can you take advantage of this in your marketing? Well, have your customers build those products and services with you. Just like IKEA, you take it home, you build it yourself. And then it's like, man, this is the best thing ever. That's the IKEA effect. It's the best thing ever because you put your time and energy into it. As a marketer, have your clients invest their time and energy into developing custom solutions that fit their needs. This is how you can take advantage of the IKEA effect. This is just the tip of the iceberg because there's actually hundreds of cognitive biases. There's just so much in this world of psychology. And as marketers, I suggest that one of the best ways to improve your marketing game is to learn about human psychology, why we make decisions, what motivates us to buy. These are all important topics. As a marketing director, these are things that you should know about. So if you've enjoyed this episode, be sure to subscribe, rate, and review. And hit me up in social media at We Are Slam. I look forward to your comments and your shares. And I'll see you next week.