2/4 of course Flashcards
what is the availability heuristic?
info that comes to mind quickly (vivid, pictures, memorable) is more important/true
what is anchoring?
the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions
what is framing?
our choices are influenced by the way they are framed through different wordings, settings, and situations
- losses loom larger than gains
what is the decoy effect?
adding a more expensive option makes the middle option look more attractive (middle option is between low quality anchor and high price anchor)
what is distance bias?
people think abstractly for events that are distant in time/space, but concretely for events that are close in time/space
what is the coherence bias?
tendency for people to see order in randomness
what is the peak-end bias?
people prefer experiences that get better over time, and end on a high
how can we reduce our biases?
KAFEH
- Knowledge
- Apply
- Feedback
- Examples
- Habit
what is the status quo bias?
we have a general preference to stick to what we already have/do
what is FOBO?
fear of better options
- more reliance on recommendations and known brands
what is a hook?
high expectations on attribute 1 (set by ads/reviews/personal experience) and meet these expectations
what is a surprise?
low/absent expectations on attribute 2 and then exceed these expectations
- Reason for high satisfaction
what is positive disconfirmaiton?
pleasant surprise
how do you use surprise to create higher satisfaction?
- Stream of surprises (new features, new offerings)
- Creativity required
- Small surprises ok
- Cheaper surprises better
- Easier to program surprises in digital products
When there are negative surprises, consumers think about possible reasons/attributions:
Focus (who is responsible?)
Stability (what is the frequency?)
Control (what is being done about it?)
what are Challenges in Delivering High Service Quality?
- Factory-level quality control not possible
- Employees are human and may not deliver consistent quality
- Service quality might depend on the participation of customers
- Other customers might influence service quality
what are the 4 realms of experience?
- entertainment
- educational
- escapist
- esthetic
what is the peak-end bias?
People prefer experiences that get better over time, and end on a high
what is churn rate?
% of customers who leave each year
what is the formula for expected value?
Probability x Outcome (summed across outcomes)
what is AC
acquisition cost of customer
what is social influence?
influence from non-marketer sources
what are the 6 social norms?
- Fairness
- Consistency
- Social proof
- Authority
- Scarcity
- Liking
what is consistency?
“Get someone to do a smaller action, and they’re more likely to do a bigger action”
