All posts by : Cultural Relevance Team

The Serial Position Effect (notably studied by Ebbinghaus, Murdock, Glanzer and Cunitz) refers to the finding that recall accuracy will vary as a result of where an item is positioned within a list. Items are more likely to be remembered if they are presented at the beginning (the primacy effect) or the end (the recency effect) of a list, relative to those items presented in the middle. We remember more easily the first few items because of the greater amount of cerebral processing devoted to them, and we remember more easily the last few items because they are still in our short-term memory when recall is needed. Items that benefit from neither of these effects (the middle items) are recalled most poorly.

For example, the Serial Position Effect might be experienced in everyday life when you go the supermarket after having only been given a verbal list of items to buy. In the time it takes to get there and then with all the distractions available as you wander the aisles, it’s unlikely you will remember all the required items: you will tend to remember the first few, as your brain was actively processing these as they were told to you, and the last ones you heard most recently before you left.

The Serial Position Effect has innumerous applications within advertising and marketing. Taking this principle in to account is important for TV advertising (during which commercial break or where within each break will your ad be best received and remembered?) and for online advertising (where should ads be placed to ensure maximum attention of internet users?). A study done in 2006 showed that links at the top and bottom of a website menu received the most clicks, so when marketing online it is best to place the most important links at the top and bottom of a page or marketing email.

Self-efficacy theory, first defined by Albert Bandura (1984), shows that our own perception of how capable we are of completing a task will influence and affect our subsequent behaviour and ability to succeed in this task. In other words, the more competent we think we are, the greater our intrinsic motivation to act is. High or low self-efficacy determines whether or not someone will choose to take on a challenging task or perceive it as impossible to complete.

According to Bandura’s theory, people with high self-efficacy are more likely to view difficult tasks as something to be mastered rather than something to be avoided. Different factors can influence our self-efficacy: past successful experiences for similar tasks, positive feedback or “vicarious experience” (when we see others being successful in a task).

A scientific study revealed this self-efficacy effect by studying two groups of students engaged in solving puzzles over 3 different sessions. Group A received positive feedback after their first session whereas Group B did not. The results then overwhelmingly showed that Group A went on to be more motivated and successful in the subsequent tasks than Group B.

Self-efficacy theory is used in online marketing in order to increase visitors’ motivation and self-confidence when they are asked to complete a task online. For example, showing social proof through displaying details of customers who have previously taken the same actions (bought something, written a review, signed up for a membership, etc.) is a good persuasion technique to encourage others to do the same.

The Scarcity principle was discovered by scientists Worchel, Lee and Adewole in 1975. They conducted an experiment that simply used a jar full of cookies and another that was almost empty; they found that people overwhelmingly tended to desire a cookie from the jar that was almost empty simply because of the scarcity effect. This effect also generates an urgency to have the scarce product before it is gone entirely.

This principle is explained by the idea that the more difficult or urgent it is to acquire an item, or the more easily it might be lost, the more value that item has in our minds. Scarcity is associated in our brains with something positive, luxurious and exclusive as we automatically assume that it is scarce because everyone wants or has already bought this product and therefore it must be a good product. In other words, scarce objects arouse our interests and so immediately become more desirable than a product that is readily available.

Many brands make use of this through the way they market their products: by offering limited edition products, flash sales or only producing something in limited supply, brands are able to stimulate demand. For example, just one day after Apple launched the last iPhone, stocks had already sold out, which in turn made even more people want to buy it because it generated the scarcity effect and automatically branded it as a luxury item that people were willing to queue for hours to have.

The Salience Effect explores the why, when and how of which elements are “salient” for different individuals – meaning which elements we are most drawn to and will focus our attention on. This is a key aspect in recognising what leads us to distinguish certain elements from others and what information we are more likely to concentrate our cognitive efforts on and will therefore retain afterwards. Our brains struggle to give equal attention to multiple things at once and so therefore register them according to a subconscious hierarchical system whereby salient elements are given priority. The Salience Effect can come in to play for multiple reasons. It could be that a particular element is notably distinguishable from others (for example, a sudden noise in a quiet environment or something that is lit up at night time) and therefore attracts the attention of our senses. Other elements may become salient over time as we gain the habit of noticing them only at a particular moment, for example we may pay no attention to the cars passing us by in the street until the very moment we wish to cross over and then these cars suddenly become our primary focus. Equally, what we do and our personal interests will affect what we find salient so someone who works in fashion, for example, will be more likely to notice fashion-related details than someone whose primary interest is, say, music. In marketing, the objective is of course that your product, brand, or message is salient and therefore stands out from those of your competitors in order to ensure that they catch the attention of the consumer and the impact will stay with them for longer. Using contrast is one way of helping this to happen; for example, consumers are so desensitised to the classic format of TV advertising now that it’s important to focus on making yours so atypical and different that it won’t fail to catch people’s attention due to its notable differences. Whether or not an element will stand out as salient will equally depend on the moment and context as well. It is therefore just as important to be able to recognise which moments will create salient elements for your customers in order to maximise communication potential. For example, if your customer is looking for a refrigerator then the elements of your site which lead them towards information and offers on fridges will be immediately more salient to them than other unrelated links or offers. Equally, consumers will be more receptive to new salient elements once their primary reason for coming on to your site has been taken care of. Jared Spool conducted some research in 2002 studying user behaviour on a distribution website and discovered this very fact: that consumers are less likely to pay attention to elements that don’t concern them before their primary purpose has been accomplished. So if they are online looking for a fridge, then they will want to see elements leading them towards the purchase of this fridge first and will be more receptive to finding other elements salient once this is completed.

Risk Compensation, which was studied in detail in relation to motorway accidents by Professor Sam Peltzman in 1975, describes the way that humans will in fact be more likely to take greater risks when they feel they’re protected by certain factors.

For example, the Peltzman Effect came from Prof. Peltzman’s study that found that measures taken to reduce road traffic accidents actually had no real effect at all as, when people felt like they were safe because they were required by law to wear their seatbelt or their car was fitted with auto-lock brakes, then they were actually more likely to drive faster or more dangerously close to the cars in front, believing themselves to be in a reduced state of risk.

In web marketing, knowledge of Risk Compensation can be applied to encourage conversion through making your customer feel like your website is a safe place to shop. If they feel secure and happy then they will be more likely to actually make purchases and even make more purchases than they would have done otherwise. Adding https (protocol for secure communication), trust badges and customer testimonials to your site will make your customer feel like they’re shopping in a secure environment and put them in the right state of mind to make purchases on your site.

Representativeness Heuristic is a cognitive bias explored by Kahneman and Tversky in their article Subjective Probability: A Judgment of Representativeness (1972). It demonstrates that people tend to “force” statistical arrangements to match with their beliefs when making judgements about the probability of an event under uncertainty. Representativeness Heuristic also explains the way in which we place objects in to a certain category simply based on a limited number of similarities: even if something doesn’t fit exactly into a known category, we will judge it to be the same if we can draw enough parallels. This shortcut leads us to judge the probability of something or the category it fits into in a biased manner by comparing it to a similar thing rather than using objective statistics or knowledge.

For example, if an individual sees three blackbirds fly past in succession, they will expect the fourth bird to go past to be black too, and even assume that maybe there are only black birds in that particular area. They are making biased assumptions based on a mental shortcut that relies on generalisation rather than statistical probability. Mathematically speaking, without knowing any statistics related to the ornithological distribution in the area, the fourth bird to pass is just as likely to be any other colour as it is to be black again.

You can use this principle in web marketing in several ways. In order to make your product appear as attractive as possible to your customers, you can highlight the similarities of this product to another that you know your customer likes (perhaps something they’ve previously bought). You can also make use of this principle to ensure that the products and services you are offering match up with their expectations based on representative models.

It is human nature to compare, and to judge value based on these comparisons, and the world of consumerism is no exception. Most people will only feel justified in purchasing something if the price of it matches a perceived value. This value can be changed according to how it is framed – as with Perceived Value Pricing – and the use of Reference Pricing is one such way that framing a price can change our perception of its value. Reference Pricing refers to the fact that individuals will decide what is a justifiable price to pay for a product or service by comparing it to other reference prices (such as competitors’ pricing or previous, pre-sale pricing etc.).

For example, if you are told that an obscure vinyl record is on sale for £300, you won’t really have any idea whether this is good value or not as there is no point of market reference. If you then find out that another copy of the same record recently sold for almost £1000 then this provides a frame of reference and now the one on sale for £300 seems like it is a very good deal. On a smaller scale, if your local supermarket is selling tins of soup for £1, you’re unlikely to look twice unless you specifically came in to the store for that. However, if they have a visible reference price available showing that this soup is sold at a competitor’s store for £2 – it immediately puts the value, quality and price in to a new perspective and makes the soup a much more attractive purchase.

Research has shown that Reference Pricing even comes in to play on a subconscious level and that even the prices of unrelated products in close proximity can affect the perceived value of something. In a study conducted by Nunes & Boatwright (2004), CDs were placed on a beachside stall next to sweatshirts that were being sold alternately for $10 and $80 (at half hour intervals). When the sweatshirts were sold for $10 people were only willing to pay $7.29 for the adjacent CDs, but when they were being sold at $80, this price jumped almost 18% to $9! Without them even realising, customers were being influenced by the Reference Pricing of the completely unrelated sweatshirts.

In sales and marketing, Reference Pricing is a useful tool to help give products and services the desired value perception. By contrasting your prices with that of competitor’s or by highlighting how large a discount you are offering on a previous advertised price, customers will be likely to consider the purchase justified and, even more so, a good deal.

The Reciprocity Principle describes the human tendency to be more likely to want to give something back after something is received, whether that be a favour, gift, invitation, etc. Sociologists explain this psychological principle by the sense of obligation or indebtedness we automatically feel when someone does something for us because of the social norms that govern our relationships. From a young age, we are socially “trained” to feel as though we are indebted to people who act in our favour. This activates a “give-give” reaction in us that motivates the desire, or even presumed obligation, to always “return a favour”.

An example of this might be when someone buys you a Christmas gift simply because you gave them one: they feel compelled to do so based on the ingrained Reciprocity Principle. Inversely, the Reciprocity Principle can also act in negative situations, meaning that if someone acts wrongly towards you, you are likely to feel a compulsion to do the same to them, even if this would go against your usual character. In both cases, the principle is the same: you adjust your behaviour in relation to that of someone else’s to maintain this “give-give” societal norm.

The Reciprocity Principle has many sales tactic applications. For example, it is the root of the “rejection-then-retreat” sales technique that consists of making a request that will likely never be accepted and then, once rejected, making a more reasonable request that will then be – hopefully – accepted by your customer as they know you have made a concession so they feel compelled to also make one. In web marketing, strategies that give something for free to start with in order to hook a customer in and motivate them to want to give something back are also based on the Reciprocity Principle, as are content marketing strategies that rely on giving customers useful and interesting information before asking them for anything in return.

Recency Effect is a cognitive bias which explains the way in which we always remember first the most recent pieces of information we’ve taken in. Of course, information that we read or heard last will be most freshly inscribed on our short-term memories and so come back to us more quickly when we’re trying to remember. For example, if you ask someone to complete a list of tasks for you, they’re more likely to remember and be able to complete well the last thing on your list than those that came at the beginning or in the middle.

We also give immediate significance to the most recent pieces of information, subconsciously preferring them over anything that came before, which explains our relationship with “novelty” items. The result of this is the Novelty Effect: the way that anything new has a short-term advantage over more established things because of the very fact that we lend precedence to something simply because it is new and different. Looking at this in terms of a website perhaps, if a new function/page/tab is created, visitors are more likely to click on it or interact with it as required – and also to view it in a favourable light – simply due to the fact that it is new and is therefore inciting the “Novelty Effect”.

Many marketing strategies play up to this by updating their products regularly in order to benefit from the Recency and Novelty effects on a constant basis, one prime example being the way that Apple releases new iPhones on a regular basis, being fully aware that – even if the new model doesn’t include many different features – it will generate excitement simply because of the fact that it is new.

The Psychology of Consumption is an important concept that looks at not only selling a product or service but how the after-purchase consumption rate is important in guaranteeing repeat purchases. With the high amount of competition present for almost every product and service today, the key to long-term success is not only securing an initial purchase but ensuring people actually use the product and services they buy.

Whereas we often associate an increased likelihood in making a sale with helping to make the price and payment process as unobtrusive as possible, this tactic doesn’t often work when we want a customer to actually make use of that product and become a returning customer. One of the most effective ways to ensure someone makes use of something they’ve parted money with for is to consistently remind them of that fact. This is in line with the Sunk-Cost Effect, which describes how individuals will make sure they use something, even if they no longer want to, simply because they will feel like it was money wasted otherwise.

For example, a health club might offer customers the option of paying for an annual membership. Whilst this one-off payment will help to reduce the pain of paying as it condenses what could be a large amount of money in to one smooth transaction that they know will last them for a whole year, it also reduces the likelihood that they will continue to workout regularly and ultimately renew their membership next year. In studies, it’s been clearly shown that people who have annual memberships utilise them heavily for the first month or few months – whilst the amount they’ve paid is fresh in their minds – but when the sunk-cost effect has dissipated somewhat, they only use it infrequently, if at all, and are highly unlikely to renew at the end. In contrast, people who pay for a membership monthly are constantly reminded how much it is costing them and so the sunk-cost effect stays intact, motivating them to make the most of it, which ultimately means they’ll see the most benefits and be much more likely to want to continue on longer term.

In order to encourage initial purchase but also tap in the to psychology of consumption, tactics to lessen the pain of paying such as bundle pricing, annual memberships, advanced payments etc. can still be used, but testing sending out regular emails to remind people afterwards of how much each item in their bundle cost them individually or how much their annual membership is costing them per month, whilst perhaps seeming counter-intuitive, could be key to encouraging consumption and therefore increasing retention.