Issue 012: Cognitive Bias 🧠

We share how to exploit cognitive biases to increase sales, why you can’t win without these 9 marketing advantages, why you shouldn’t believe your customers & a simple hack to win back cart abandoners.

December 04, 2024 | #012 | Free Version

Hi friends and happy Wednesday!

Welcome to Startup Blitz, a weekly newsletter full of timeless ideas and insights you can use in your online business.

This week, we discuss –

🧠 How to exploit cognitive biases to increase sales

🛒 A simple hack to win back customers who abandon carts

📢 Why you can’t win without one of these 9 marketing advantages

🚫 Why you shouldn’t believe your customer at first

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5 Dangerously Powerful Cognitive Biases You Can Use to Boost Sales 🧠

We aren’t as rational as we’d like to believe. We rely on mental shortcuts, known as cognitive biases, to make decisions quickly. These cognitive biases shape how we think, act, and buy.

You can use these cognitive biases to make your brand stand out and increase your conversion.

Let’s explore 5 such cognitive biases and how to use them effectively:

1. Anchoring Bias 🎯

The first piece of information we see influences our perception and decision-making. Imagine shopping for a used car. The first deal you like will be used as a comparison point. Anything cheaper feels like a bargain, while anything pricier seems expensive.

To leverage the anchoring bias:

Present your most expensive offering first. This will make other options seem more affordable.
When displaying a discount, always put the crossed-out info first in order to put the size of the discount into perspective.
Highlight the benefit of your product by showing before-and-after comparisons.

2. Scarcity 🕒

We assign more value to things that are rare or difficult to obtain. It plays on the fear of missing out (FOMO), making us feel that if we don’t act quickly, we’ll lose out on a great opportunity.

To leverage scarcity:

Do limited-time offers. You’ll create urgency by offering deals that expire within a few hours or days.
Show the number of items left in stock. If quantities are limited, it’ll prompt faster decisions.
Restrict availability through waitlists or exclusive invitations. It’ll boost perceived value.

3. Loss Aversion 🛡️

Humans have the tendency to avoid losses over acquiring equivalent gains. Our brains find the idea of losing something we’ve invested time or effort into particularly unpleasant.

To leverage loss aversion:

When users try to cancel a subscription or stop onboarding, display a pop-up summarising the product’s value to make them reconsider.
Show accomplishments like streaks, hours spent, or savings achieved with your product. This reinforces the value they’ve already gained and the potential loss if they stop using it.

4. Framing Effect 📣

The way you present information significantly influences how people perceive it. While what you say matters, how you say it can be even more impactful. That’s exactly what messaging and copywriting are all about.

To leverage the framing effect:

Instead of just listing features, highlight what your users can achieve with your product. Show how it improves their life.
Use positive framing. For example, instead of saying “5% fat,” say “95% fat-free”.
Offer risk-free options. Free trials or money-back guarantees help reduce hesitation and build trust.

5. Bandwagon Effect 👥

A lot of people adopt a behaviour or choice simply because others are doing it. We’re naturally drawn to follow the crowd. We often opt for the most popular option without much hesitation.

To leverage the bandwagon effect:

Use labels like “Most Popular” or “Trending Now” to draw attention to products or options favoured by others.
Encourage customers to share photos of themselves using your product on social media.
Present the number of people using your product or feature.

A Low-Cost Marketing Hack That Actually Works 🛒

Not everyone who starts an order finishes it. Many people add items to their carts, only to leave without completing the purchase.

Marketers try countless tactics to win these customers back. Hard Ketones, a beverage company, found a surprisingly effective solution.

📦 When a visitor abandons their cart, Hard Ketones sends them a free sample along with a simple message:

“I see you started an order but didn’t get round to completing it. Here’s a free one to try…”

And the result is very impressive. The founder shared the number with Harry Dry of Marketing Examples:

“The cost of posting a can is $10. People get hooked and buy subscriptions. And the lifetime value of a subscriber is $3,000!”

They only need to convert 1 in 300 recipients to make the campaign profitable. It’s a brilliant example of how low-cost, targeted outreach can turn a lost sale into long-term customer value. 🚀

You Can’t Succeed Without One of These 9 Marketing Advantages 📢

Your startup can’t win without having at least one of these nine marketing advantages.

Look closely at any high-growth startup, and you’ll see they have at least one of these marketing advantages.

So, what exactly are these marketing advantages? According to Emily Kramer & Kathleen Estreich, they can be broken down into 3 categories:

🧀 Product-led growth advantages: When your product is highly shareable and/or benefits from network effects; you have a free plan or trial that helps unlock value quickly; you can quickly expand from a small niche to a larger market or audience.

🧑‍🤝‍🧑 Market/ecosystem advantages: When you can use integrations to enable distribution and co-marketing; you can co-sell through channel partnerships; you can take advantage of trends and regulations to drive urgency.

📣 Brand advantages: When there’s a gap in the market for educational content or community; a founder has the relationship and a personal brand that resonates; your product is entirely new and can help create a category.

You have to identify your startup’s unique marketing advantage and double down on it. Build your marketing strategy around this strength, and it can drive rapid growth.

Why is this so crucial? Because you can’t simply copy another startup’s playbook and expect the same results. Your strategy has to be tailored to your specific strengths.

If your startup doesn’t have a clear marketing advantage yet, it’s time to rethink your product, business strategy, or go-to-market approach.

📖 Book of the Week: Gap Selling by Keenan

In his book Gap Selling: Getting the Customer to Yes, author Keenan introduces a deceptively powerful way to connect with buyers and boost your sales.

One key insight? Don’t take a customer’s initial statements at face value. Often, customers believe they don’t have a problem. Your job is to uncover and show them the gap.

“Every sales transaction is about identifying a gap—the distance between where customers are now and where they want to be. Take a person with a headache who wants to be a person without a headache. A merely annoying headache that in time will probably go away on its own is going to have a pretty minor impact on your life, so that’s a small gap to fill, and not a very valuable one.

“But a migraine that could keep you from meeting a critical deadline on a $500K project or attending a child’s high school graduation ceremony? That’s a damn big gap, and the person who can quickly fill it has something of tremendous value to offer.

“Frequently, however, the gap only appears small, and a little digging around reveals an impending sinkhole. Sometimes the gap appears bigger than it really is. Sometimes, it doesn’t seem like there’s a gap at all. But you can’t know for sure what’s real unless you look closely.

“The worst thing in the world you can do at the beginning of a sale is to take your buyer’s word for granted or sell to a need. I know it’s what we’ve been taught to do but a need assumes the customers know what they want, and that’s a bad assumption. Sure, they think they know what their problem is, but what if they’re wrong?

“Never sell to need. If you only solve the problem your buyer thinks they have instead of the one they really have, you haven’t helped them at all. You’re like a doctor treating the symptoms instead of the disease. No, it’s worse than that. You’re like a doctor who has completely missed the fact that there is a disease! The real sickness is still lurking, and unchecked it could get much, much worse.

“To genuinely be of service to every customer, you have to go into every sale aware that what looks real, and what your customer thinks is real, might not be real.

“Gap selling is a process of tactfully challenging buyers’ assumptions, exposing (and sometimes confirming) the true size of their problem, then correctly assessing the impact it will have on their lives. The more impact, the larger the gap. And the larger the gap, the more valuable the solution, i.e., your product or service.”

Interesting Articles We've Read This Week

📣 Is Your PPC Strategy Sabotaging Your SEO? 2.3M Keyword Study

📢 The 2025 guide to (aesthetic) Pinterest marketing

🤖 The State of Generative AI in the Enterprise

👩🏻‍💻 The End of Productivity: Why creativity is the new currency of success

🌐 Remembering Cyberia, the World’s First Ever Cyber Cafe

Thanks for reading, until next week!

Sayed Bin Habib

Co-Founder, Startup Blitz

Follow me on LinkedIn / Website

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