Every day, online shoppers are unknowingly influenced by internal, unconscious psychological triggers that drive decision making. There is a vast and often unexplored field for marketers: cognitive biases, or the short cuts our brain takes in decision making. These often result in automatic, predictable decision making that we often refer to as heuristics. In an e-commerce environment, there are eight (8) cognitive biases that are particularly relevant to marketers. With a basic understanding of the cognitive biases listed below – Scarcity, Authority, Social Proof, Anchoring, Loss Aversion, Commitment & Consistency, Framing, and the Decoy Effect – you can perform the marketing magic of building product pages, ads and prices that influence your customers to buy.
Scarcity: Use FOMO to Create Urgency
Scarcity bias determines value; the less something appears to be available, the more valuable it seems. Once someone perceives that a product or offer has limited availability, it encourages quicker decision making because of a rush to act before it disappears. Powerful examples of this persuasive tactic are “only 2 remaining in stock” or “24-hour flash sale” – they create fear of missing out (FOMO). Scarcity also informs social proof – if others are buying, you should too. When something is limited, there is an innate thought in our heads that says – “if it’s scarce, it must have some quality.” The thought process creates urgency in buyer behaviour.
- Limited Time Deals: Promote these sales with countdown timers or a static expiration date. “Sale ends at midnight – don’t miss out!”.
- Low Stock Warning Messages: Display “Only 3 left in stock!” to show how many are remaining.
- Exclusive Deals: State offers like “members only”, or “limited edition”.
Using these persuasion techniques certainly leverages the scarcity bias and will create a demand for goods or services. Just remember – you must be honest about availability. False perceptions of scarcity can undermine your credibility.
Authority: Communicating Trust Through Expert Signals
We trust authority and experts before we trust non-providers. If you appear to be the experts, we will listen. The authority bias will lead us to listen when people or brands present themselves as knowledgeable. A product that says “doctor-recommended” or “certified by industry professionals” sounds more legit. Authority cues provide cognitive clarity – it allows people to expend less cognitive energy by believing what is said or simply stated by an authority figure.
- Expert Endorsements: Include customer referral & referral testimonials.
- Trust Badges: Include certifications, industry awards, or magazine references (e.g., “Top Seller 2024”).
- Credentials and Logos: Use industry logos or recognizable partner logos (e.g., “Trusted by NASA”, “SSL secured site”).
In marketing, authority is typically paired with social proof. When you have an influencer or authority stress that your product solves a need, you can see conversion rates spike. When we ethically use authority, the consumer feels a greater sense of confidence in converting to a purchase, as the individual is psychologically more prepared or feels safe as a result of the authority association.
Social Proof: Show the Herd of Happy Customers
Social proof is a behavioral concept meaning when a person does not know how to act or how to make a decision, they will mimic the behaviors of others. This is why consumer reviews, ratings, or the number of effective customers represent gold for us. Research has shown that people will trust the opinion of a stranger, even more so a friend, which illustrates how much we count and rely on the words of others.
- Consumer Reviews and Ratings: Promote star ratings, testimonials, and review counts prominently on product pages.
- User-generated content: Post pictures or videos from ‘real customers’ that used your product.
- Best Seller Tags: Show that an item is popular (“Most Purchased”) or an item is trending.
- Social Media & Influencer Mentions: Display that your product is liked by a large number of followers or highlight influencer shoutouts.
These cues serve as representation to the new visitor that, again, as with the previous authority cue, save a thought and tell them that other people just like them trust your brand. These cues also present who has had real customer success. Buying becomes a more thoughtless action, and feels more right and natural for these consumers.
Anchoring: Establish a Strong Reference Price
The anchoring effect occurs when the first price or number seen becomes the frame of reference for value. You can place a high first price in comparison to the second price you are presenting; this will make the second price feel like a great deal.
- Example 1 – Strikethrough Pricing: Display original (“Was £100”) alongside sale price (“Now £75”).
- Example 2 – Tiered Package Plans: Start with the premium package (with premium price), next show your standard plan.
- Example 3 – Quantity Anchors: Restrict the number of items they can purchase (“Max 4 per person”); the anchor encourages larger quantity purchases.
Anchoring can generate more sales. For instance, when a retailer introduces a premium product it often drives up their mid-tier product sales. Always think about the first number your customer sees – it anchors their perception of value.
Loss Aversion: Use “Don’t Miss Out” Messaging
People feel more pain from losses than pleasure from gains of the same amount. For consumers, it means they dislike missing out on deals or losing what benefits they currently have. Marketers build their messaging around loss aversion to drive action.
- Limited-Time Callouts: Use countdowns and phrases like “Offer ends soon – save £50 today!”
- Stock Warnings: “Only 2 left!” suggests urgency to act now.
- Free Trial Expiration Reminders: Instead of “upgrade to keep features”, say “your free trial expires in 3 days – add features back now”.
- Money-Back Guarantees: Use phrases like “Money back if not satisfied” to reduce perceived risk.
By framing your message around what customers will lose, you can drive more conversions. Even simple tweaks like “Last chance” headlines can boost results.
Commitment & Consistency: Start Small and Build Larger
Once someone commits to something, they want to act consistently with that behavior. This commitment bias means that getting customers to say “yes” to something small leads to greater engagement later.
- Low-Barrier Sign-Up: Offer a free guide or trial in exchange for an email.
- Wishlists and Reviews: Encourage customers to create wishlists or review purchased items.
- Micro-Commitments: Use pop-ups with questions like “Would you like a discount code?”
This is the “foot-in-the-door” technique. Small initial actions create a pathway to bigger decisions. Gradual increases in commitment can lead to more conversions.
Framing Effect: Bundle Offers in a Positive Context
How you frame information influences its appeal, even if the facts are identical. For example, “95% fat-free” sounds more attractive than “5% fat”. Pricing is the same: £50/month feels more manageable than £1,200 up front.
- Gain or Loss Referencing: Present benefits as gains (“save £10”) or loss avoidance (“don’t lose £10”).
- Split Pricing: Use smaller payment periods (e.g., “only £9.99/month”) to improve affordability perception.
- Descriptive Framing: Focus on positives (“refurbished – like new for $199” vs. “originally $299, now $199”).
Frame your offer in a way that appeals to emotion. With the right framing, even high prices can feel like great deals.
Decoy Effect: Influence Selection with a Third Option
The decoy effect works by adding a third, slightly worse option to make one of the original two more appealing. For example, if a coffee shop only sold small (£2) and large (£7) coffees, people might choose the small. Add a medium at £6 and suddenly the large looks like better value.
- Multiple Level Pricing: Offer a cheap decoy, a middle plan, and a premium plan.
- Bundled Product: Present a low-cost, weak-feature item alongside a well-balanced bundle and an expensive deluxe option.
- Product Comparison: Use a weak third option to highlight the strengths of your target product.
A well-placed decoy can direct customers to your most profitable offering. People make decisions based on comparisons – not absolute value – which makes this approach highly effective.
Conclusions
When used ethically, cognitive biases are powerful leverage for online sales. Scarcity, authority, social proof, anchoring, loss aversion, commitment, framing, and decoys are all based on instinctive buyer behavior. Build your product pages, ads, and pricing around these principles – while staying truthful – and you help shoppers make faster, more confident decisions. It’s a win-win: easier purchases for them, higher conversions for you. Use these strategies thoughtfully and increase your e-commerce sales.