Firstly, what is a cognitive bias? A cognitive bias is a limitation in rational thinking caused by the tendency for the human brain to take short cuts to save energy. Cognitive biases are coping mechanisms that allow the brain to process vast amounts of input. While the mechanism is very effective, its limitations cause errors in decision-making.
The ambiguity effect is a cognitive bias where decision making is biased by a lack of information (ambiguity). The effect leads people to select options for which the probability of a favourable outcome is known,over an option for which the probability of a favourable outcome is unknown.
In-store and online decision-making are often affected by a dislike of uncertainty. This makes people reluctant to try new things and limits their ability to recognise the long-term benefits of riskier decisions.
Shoppers prefer options with a more certain outcome, even if they aren’t the best choice. So, if you want shoppers to try new things, there are a number of aspects you should consider.
- Be clear about the price – Although there are times when itis wise to split out things like delivery charges, local taxes and the like, to encourage shoppers to experiment, make it clear how much they are ‘risking’.Specifically, if you are launching a new food product, it’s usually unwise to support it with a multibuy. Why should the shopper ‘risk’ buying 2 if they don’t know if they’ll like 1?
- Minimise all risks - Reducing the perception of risk minimises the impact of ambiguity. You can achieve this by providing shoppers with a money-back guarantee, some form of warranty or cooling-off period.
- Add expert endorsements – If you are unable to provides shoppers with all the information they need, consider using an ‘expert’ to promote your brand (think dentist in toothpaste adverts)
In summary, to avoid the ambiguity effect, be clear about the price, clear about any risk and clear about what you brand offers. A few simple steps can enhance the shopping experience and improve the performance of your new brand launch.