Behavioural economics combines concepts from psychology and economics to better understand how humans actually make decisions, which often involve mental shortcuts and irrational thinking. By utilising subtle aspects of the key principles from behavioural economics—framing, priming, anchoring, and relativity— marketers exert great influence on decisions due to quirks in human psychology. While at times counterintuitive, applying the following key behavioural economics concepts allows your marketing campaigns and messaging to be structured around how customers think.
Framing
Framing refers to how information is positioned and the exact words used to describe something. Simply reframing statements can significantly impact interpretation and decision making. For example:
Changing “if” to “when” statements. Instead of “If you have any questions, contact us,” use “When you have questions, here is how to reach us.” This implies moving to the next step.
Reframing from “anyone” to “everyone.” Like stating “This special offer is available for anyone interested” versus “This exclusive deal is available to everyone who signs up this week.” This taps into our human desire to be part of a group.
Ending with a question instead of a statement. Asking “Ready to get started?” leads to more responses than declaring “Contact us when you’re ready.” Questions feel open-ended and compel engagement.
Priming
Priming refers to the idea that introducing concepts and experiences, even briefly, before a decision is made can unconsciously impact what option is selected. This is why sensory details are so important in marketing content.
For example, real estate listings emphasising images of family gatherings and laughter can prime buyers to picture themselves experiencing joy in the home. An email with a smiling photo of a group attending an event can spur readers to imagine enjoying a similarly happy experience. These primes anchor into emotions that later affect decision making, even if the buyer doesn’t consciously realise it.
Anchoring
Anchoring means latching on to initial numeric values when making a guess or estimate. Since making calculations from scratch is mentally taxing, we typically adjust guesses up or down from whatever anchor we start with.
Savvy marketers utilise this tendency by providing a numeric anchor, even an extreme one, to drive decisions. For example, an ad suggesting to buy 18 bottles of wine may lead people to purchase 6, when without any anchor they may have only purchased 2. The anchor, even if too high for practicality, creates a new baseline that people adjust down from according to their means.
Relativity
Relativity describes how something seems good or bad depending on what we compare it to. We don’t analyse options in a vacuum—initial points of reference change our perspective.
Software companies employ this tactic when pricing plans. They display the monthly charge for basic, pro, and premium options. Even though the middle tier may be objectively expensive, it seems more reasonable in context next to the priciest premium plan. Shoppers also perceive middle-shelf liquor as higher quality than bottom-shelf options purely due to surrounding contextual cues.
Pay attention to relativity by always leading with the most expensive offering first. This establishes a high anchor that makes lower desired price points appear far more reasonable and compelling in comparison.
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