Classical economics assumed consumers were rational, long before behavioral economics marketing research proved otherwise. Every person carefully considers every purchase they make, weighing all relevant factors, to optimize each decision. The math was pretty, the models were complex, and the theories made sense on paper. One problem: nobody ran experiments to verify if any of it was actually true.
It wasn’t.
Psychologists started testing human decision-making in controlled experiments. It turns out, people use many mental shortcuts to make decisions. Economists like Kahneman and Tversky noticed, and behavioral economics was born.
Overthinking is a problem just like underthinking, so fully optimized, rational decisions often waste time and energy. These shortcuts aren’t flaws in human cognition, they’re actually features. And they’re predictable, which means they can be leveraged.
As marketers, we can use these behavioral economics marketing principles to align our messaging with how people actually make decisions. We can verify our techniques to make sure that we build trust and help people make better decisions utilizing these principles.
Here’s how:
Framing
People respond differently to identical information based on how it is presented. “99% survival rate” feels a lot safer than “1% mortality rate”. All of behavioral economics marketing starts with framing. Scaring the bejeezus out of someone is a good tactic to get them to act. You can A/B test hope/fear framing to see if fear framing wins more clicks but loses the deal.
E.g., A/B test two versions of the same offer email: one leading with cost savings, one leading with risk reduction. Track not just opens and clicks, but pipeline progression and close rate.
Anchoring
The first number someone sees distorts their judgment of every number after it. The first number you use anchors reality, and everything else gets compared to that, like it or not. Verify that the shocking numbers you show are correct, and you’ll help the consumer see the problem. Lie to them, and you’ll anchor your reputation to zero.
E.g., Lead a case study with the customer’s before-state metric (“processing 500 invoices manually per month”) before introducing your result. The before-state anchors the scale of the improvement.
Concreteness
The brain processes concrete, specific information better than abstractions. The concrete version produces a mental image, the abstract version produces nothing. Specificity is powerful because it is verifiable, so make sure you can verify every specific claim you make. For example, 12% of statistical facts on the internet are false. I just made that up.
E.g., Replace “improve efficiency” in your next campaign with a specific client outcome: “cut onboarding time from 3 weeks to 4 days.” Track whether the specific version outperforms the vague one.
Social Proof
When uncertain, people look towards what others are doing. Don’t know what to do? Just follow the crowd! This is a shockingly effective method since people usually walk towards delicious tacos and away from active volcanoes. In person, it’s easy to see social proof, but on the internet, it could be all lies. Can your customer verify your claims independently? Is that review from a real person with a LinkedIn profile, or a generic quote next to a bot photo? If a skeptical person can google your claims and verify them, then you’re helping them.
E.g., Segment testimonials by industry and company size. A manufacturing CFO doesn’t care what a tech startup thinks. Test whether matched social proof outperforms generic proof in conversion rate.
Loss Aversion
Losing something hurts roughly twice as much as gaining something equivalent. “Don’t miss out”, urgent sales that repeat every month, and fake countdown timers proliferate for this very reason. Can the customer verify if the deadline/scarcity is real? If not, manufactured urgency is annoying and makes consumers avoid your products. Is this shoe sale life-or-death? No, of course not, so please chill out.
E.g., Test “what you’re currently losing” framing against “what you could gain” framing in nurture sequences. Measure which drives more demo requests without increasing unsubscribes.
Path of Least Resistance (Defaults)
People don’t want to act for your stupid thing just because you want them to. If you make the path of least resistance (the default path) easy for people to do what they want, they’ll be happy. If you make it hard for them to do what they want (instead, preferring what you want), they’ll be unhappy. Sometimes, this is fine, e.g. organ donation rates swing from <20% to >95% across countries just by switching from opt-in to opt-out. Sometimes, this is not fine, e.g. one click starts a gym membership, and fifteen phone calls are required to cancel it.
E.g., Count the clicks and form fields between your email CTA and a booked demo. Remove one field or one step and measure the conversion lift.
Endowment Effect
People value things more once they own them. If I hand you a random coffee mug, I guarantee you’ll ask more to sell it than you’d be willing to pay for it. This is why free trials, demos, and free add-ons are so powerful. Once people have the thing, they’re more likely to pay more money for it. To verify whether your endowments are working, what are people saying after the free period is over? Are they psyched, did the product live up to expectations? If not, you may be endowing people with something they don’t value.
E.g., Offer a personalized sandbox or ROI calculator using the prospect’s own data before asking for the demo. Track whether prospects who interact with their own data convert at a higher rate.
Relativity / Decoy Effect
People need comparison points to judge value, and providing context is genuinely helpful when the context is real. This is often done with pricing tiers, and often abused with pricing tiers. Everybody is used to the classic S/M/L pizza pricing tiers, given in radius and dollars, requiring the consumer to do geometry homework to figure out which size is the best value. If the options require complicated math, or one is clearly inferior to the others, you’re not helping the customer choose, you’re herding them.
E.g., If you offer pricing tiers, survey lost deals on which tier they considered and why. If nobody ever picks one of the options, ask yourself why it exists.
Verify Your Behavioral Economics Marketing, Don’t Assume
The old-school economists assumed their principles were right. The behavioral economists won Nobel Prizes because they verified. These behavioral economics marketing principles aren’t a content strategy, they’re a testing framework. Use them, measure them, and see if you’re burning or building trust. Your turn.
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