The Framing Effect — Influence Purchase Decisions with ‘Framing’
July 29, 2011 1 Comment
We tend to think that we are logical creatures, that we make rational decisions based on the information that is available to us. But the reality is that all human beings have common biases that can lead to poor judgment and irrational decisions. These inherent biases that influence our thinking are what psychologists refer to as cognitive biases.
There are a number of different cognitive biases that influence our thinking. Confirmation Bias involves the tendency to seek out information that supports our own preconceived notions. The Bandwagon Effect describes the tendency to act or think a specific way because other people do. The cognitive bias that I’ll be looking at here today is framing.
Framing describes that our choices depend on how the problem is presented, the way the question is “framed”. Let’s look at a classic set of experiments on framing:
Participants were offered two alternative solutions for 600 people affected by a hypothetical deadly disease:
- Option A saves 200 people’s lives
- Option B has a 1/3 chance of saving all 600 people and a 2/3 possibility of saving no one
72% of participants chose option A.
They offered the same scenario to another group of participants, but worded differently:
- If option C is taken, then 400 people die
- If option D is taken, then there is a 1/3 chance that no people will die and a 2/3 probability that all 600 will die
However, in this group, 78% of participants chose option D (equivalent to option B)
The above experiment explains the very essence of framing. The two groups favored different options because of the way the options were presented. The first set of participants were given a positive frame (emphasis on lives saved), whereas the second set were given a negative frame (emphasis on lives lost).
Marketers and business owners can influence purchase decisions by the way they frame their offers. Here are some ways to apply this idea of framing:
Percentages and Absolute Numbers
In his blog Neuromarketing, Roger Dooley examines the effects of using percentages versus real numbers. It’s the difference between saying:
- 90% of customers are satisfied with our service.
- 9 out of 10 customers are satisfied with our service.
Real numbers tend to have a much stronger impact on people. Conversely, if you must present negative information, use percentages for a lesser impact. “Only 1% of our products have a defect” does’nt sound nearly as bad as “1 out of every one hundred products have a defect”.
Break it Down
Breaking down the cost for the product in terms of pennies or dollar per day will make your product much more appealing to consumers. 83¢ per day for a gym membership sure sounds more feasible than $25 a month.
Conversely, sometimes it is beneficial to aggregate a cost. For example, $400 for an espresso machine sounds like a large investment when presented with no framing. However, it is much more feasible when you compare it to the aggregated yearly cost of visiting Starbucks. (i.e. $800)
Research shows that price format can also influence a purchase decision. A paper put out by the Harvard Business School compared all-inclusive pricing (e.g., the price of a TV is $500 including shipping) versus partitioned pricing (e.g., the price of a TV is $490 and shipping is $10). They found that price format is an effective way to shift attention from one type of component (the actual price of the TV) to another (the great deal on shipping)
If you enjoyed this article, you may be interested in some others from the Understanding Customer Thinking series: