Choice overload is partially why users choose familiar options, and this is why leveraging familiarity can be a superpower to make your brand stand out in a sea of similar choices.

2. It modulates the way we perceive experiences

Familiarity bias is not only a resource optimization process but also a real tool that has been shown to modulate attention, memory, brand preferences, donation behavior, and even perceived taste when it comes to food.

Let’s take an example that hits close to home for me: As an Italian, my childhood afternoon snack was Nutella on bread, so whenever I see any other chocolate spread, I don’t even consider it, as they all seem to taste weird to me; however, my Spanish friend Isabel grew up with Nocilla and swears by it, saying that Nutella tastes bad in comparison.

But why does that happen? It’s because familiarity can even modulate the way we perceptually experience something, producing an affect-biased preference behavior, as shown by the Wageningen University & Research in the Netherlands. The research group tested brand recognition and taste preference in soy sauce and concluded that if the brand of the sauce was known and familiar, it was reportedly liked more. This taste preference applied even when participants thought they recognized the familiar brand but were incorrect. Recognition, either correct or incorrect, of their own familiar brand significantly increased liking scores.

While theories of decision-making and emotions are more complex and still under investigation, the power of familiarity on brand perception and preference has been demonstrated by several other studies throughout the last few decades (Monroe, 1976; Park & Lessig, 1981; Maria Sääksjärvi, Saeed Samiee, 2007; Ma, Wang & Da, 2021 to name just a few). For example, an iconic one by McClure and colleagues investigated the behavioral preference displayed for familiar brands by exposing participants to a blind taste test of Pepsi vs. Coca-Cola. When participants did not know the brand of the drink they were tasting, the preference for one or the other was split equally in the group; however, when the drinks were labeled, ‘brand knowledge for one of the drinks had a dramatic influence on expressed behavioral preferences and on the measured brain responses.’ In short, both brand knowledge and cultural influences bias preference based on affect.

3. It makes us feel safe

As we have seen, the familiarity bias allows us to skim down options and free cognitive resources to allocate to other important tasks, but what makes it so powerful in behavioral and financial decisions is something more profound – the perception of safety it can convey.

While it is undoubtedly a resource-effective mechanism, familiarity also modulates how we feel about brands, especially the perceived trust we can put in them. And it is precisely the perception of safety that can lead a casual visitor to a trusted customer.

The familiarity heuristic has been widely known in behavioral economics, with investors choosing local or domestic companies as they associate it with less risk. The same seems to happen for online businesses, too. If you dig into the Google Search Console (GSC) queries of some global companies, you will find that branded, location-based keywords are bringing in a lot of searches – and sometimes minimal click-through rates (CTRs), which is where they might lose prospective customers who are evaluating their offers.