More choice is always better, right?
When it comes to picking out a new outfit or deciding what to eat at a trendy new restaurant, we assume more options should lead to better outcomes.
But actually, the opposite is usually true…
...and that was proven by attempting to sell - of all things - jam.
In a study popularized in persuasion guru Dr. Robert Cialdini’s book Yes! 50 Scientifically Proven Ways to Be Persuasive, Columbia business professor Sheena Iyengar set up a demo at a grocery store selling 24 different kinds of jam on one day and six the next, handing $1 off coupons to everyone who tasted a sample.
Unsurprisingly, 60% of shoppers were drawn to the large display, while only 40% were drawn to the smaller one. However, 30% of shoppers who approached the small display later bought jam, while only 3% of those who approached the large display made a jam purchase.
That’s a 600% increase in conversions.
Just from offering potential customers fewer choices!
This was a landmark study of the "paradox of choice": when we provide people with fewer choices, we can actually reduce anxiety, increase sales and inspire greater happiness after a decision is made. (tweet this)
This is just one of the many buyer psychology principles we’ll explore in this post, all of which will show that if you want to influence buyer behavior, you need to tap into the basic, primal ways we make decisions and use a few unconventional tactics to get unconventional results.
1. The Ben Franklin Effect
The great American inventor and statesman discovered this psychological bias after a rival turned, seemingly out of nowhere, into a friend. All Franklin had done to inspire his enemy to like him was this: he asked to borrow a rare book from the man.
When we do favors for people, for some reason we feel the need to rationalize our good deed by telling ourselves we did it because we like the person.
You can use this effect with your customers by asking them for a favor (preferably after they make a purchase in your store).
Ask customers to take a survey for insights. Or ask them to review their purchase once it’s delivered, like Nordstrom does.
Reviews give your products the very thing that can help persuade more people to buy from you. That thing is...
2. Social Proof
- Video testimonials
- Starred ratings
- Product reviews
- Tweets, likes and social shares
Amazon has built up such a review powerhouse that 30% of e-commerce shoppers go to Amazon just to research products. And we'd be fooling ourselves if we thought that they didn't buy from Amazon in turn.
Social proof is one name given to a range of psychological principles that hold that people will do what they see others do more often than they'll make "lone wolf" decisions. Principles like herd behavior, informational cascades, imitation and collective intelligence are just a handful of concepts that fall under social proof.
One study tested social proof on something that is typically hard to get people to do: vote.
After asking some preliminary questions about their voting habits, researchers told half of the participants that they were much more likely to vote because they were part of the more politically active party. Very sneaky.
It turns out the participants that were told they were active had a 15% higher voter turnout than the other half.
No wonder why customer loyalty programs work so well. When we want to be seen as part of a group, we tend to behave in a way that proves our status.
Check out how fashion retailer ModCloth uses social proof on their product pages.
They don't have models. They have actual pictures of customers wearing the product you're thinking about buying... in real life! Even more, they have five star customer ratings for fit, length and quality, along with personal customer reviews of their clothing. Don't you want to be just like them?
The point is this: don't overestimate independent thinking. We are far more likely to do what others have already done than we like to pretend.
3. Utility Blindness
What would you rather buy: a $72 printer and $20 mouse bundle, or the same printer for $92 and get the mouse for free?
No, this isn’t a trick question.
Researchers conducted a study with university students in December of 2013 that found the students were close to two times more likely to buy the deal package ($92 printer+free mouse) than the bundle ($72 printer+$20 mouse).
This is an example of utility blindness, where we humans have too much information to process, and base our purchasing decision on what we think we gain from the deal rather that its total utility.
When creating deals for your customers in your e-commerce store, think about what your customers get from the deal rather than its total benefit. Be careful about bundling. Focus on ways to position deals as “too good to pass up.”
4. Sensory Perception Bias
As e-commerce marketers, we can’t spray smells through our customers’ computer screens to increase sales like cosmetics departments can.
Instead, we’re limited to using sight and sound to make our products as attractive as possible. We encourage our visitors to zoom in on products and we show 360-degree videos of models walking around in our clothing.
With image zooming and rotation videos becoming all the rage for e-commerce retailers, researchers hooked up participants to fMRI machines while they browsed an online retailer. The goal was to test the effects of image zooming and rotation videos on our brains.
Publishing their results in September of 2014, they found that:
- Image zooming in online apparel stores evoked more visual perception for prospects evaluating whether they should make a purchase or not.
- Rotation videos evoked more mental imagery, pleasure, and anticipation of a reward or pay-off during the purchase decision process.
Which makes perfect sense, right?
Leading e-commerce retailers like Zappos started making videos in 2008 - and they haven’t stopped since.
Laurie Williams, Senior Manager of Website Operations, has said that since they started making videos for their products, Zappos has seen:
“An increase in conversion, decrease in returns, increased organic traffic through SEO, and an enhanced social presence.”
In fact, Zappos found that sales increased 6 to 30% for products that had videos. (tweet this)
Even crazier, sales went up even when people didn’t look at the videos. Just the fact they had them made people more likely to buy! We humans are strange little decision makers...
5. “Newness” and Novelty Seeking
Researchers were recently curious about our obsession with “newness.”
So in March of 2014, they explored what we consider new - and inadvertently discovered some crazy things we do to keep our stuff that way.
The student participants of the study were told to collect images of newness and oldness as they saw them.
Participants were then asked what they do to keep their purchase “new.” Their responses ranged from not wearing stuff they bought for weeks in order to preserve them to keeping shoes in their shoe boxes after they'd worn them to removing sleeves from or adding patches to old clothes.
So we get it: humans like shiny things.
But what can e-commerce marketers take from this?
Take a look at the success of e-commerce retailer RentTheRunway. Launched in 2009 by two Harvard Business School classmates who got the idea when one of the founder’s sisters complained about buying another designer dress that she would only wear once for a wedding.
Customers at RentTheRunway can rent designer dresses for whatever occasion they wish for a fraction of the price and then return them shortly after they use them.
After only six years in business, Rent the Runway has over 4 million members, 250 employees, and over 200 designer partners.
Look for ways to tap in that feeling of “newness” with your products to make more sales and delight your customers! Start by ensuring your site's look, feel and tone doesn't signal "oldness" for your particular audience.
6. Hyperbolic Discounting
Talia Wolf from Conversioner calls hyperbolic discounting “The Immediate Purchase Trigger.”
Here's the idea: customers typically select instant rewards rather than waiting on them, even if the instant reward is worth less.
Instead of offering a free shave kit after five referrals, Brickell offers $10 for every referral no matter how big the purchase. And they even give $10 to the person who gets referred.
With smaller, “instant” rewards, you’ll get more referrals and make your customers happy by not making them wait.
7. Loss Aversion
It’s a fact. Losses we experience are much more painful than the happiness we gain from wins.
Psychologist Daniel Kahneman, the author of the bestselling Thinking Fast, Thinking Slow and winner of the Nobel Prize in Economics (2002), often offers people the following coin toss to demonstrate the power of loss aversion:
"If it’s tails," he says, "you lose $10. How much would you have to gain if the coin lands on heads?"
Most people say at least $20, meaning losses are apparently two times more painful than gains.
You can see how Booking.com uses loss aversion below for booking airlines.
By warning potential customers, “Book Now, prices are likely to go up,” they tug the loss aversion string. This induces anxiety about losing something a person has already, in their mind, gained.
8. Endowment Effect
What you'd pay for a product you see on a website is a lot different from what you'd say it’s worth after purchasing it.
This is the Endowment Effect: we assign more value to things we own than to things we don't. You might recognize this idea as the inverse of Loss Aversion.
Duke University researchers found students that won impossible-to-get men’s basketball tickets valued them at $2,400. Students that didn’t win the tickets said they would spend just $170 to get them.
In your e-commerce store, you can use the endowment effect to your advantage by offering your customers free gifts that are tied to a purchase. Your customers will feel like they already own the gift, making them more likely to follow through with a purchase.
Take this offer from Ulta Beauty, for example. Here a prospective customer need spend only $40 to get a free gift that appears to be relatively valuable.
If you only have $25 in your cart, how much more likely are you to spend to keep that free gift?
The value of the gift is much higher than what someone would pay for it, making it that much more likely that Ulta will be able to increase their cart sizes. The same goes for free shipping deals as well!
9. Variable Rewards
What would motivate you more: rewards you can anticipate or variable rewards, where you don’t know how big your reward will be, or if you’ll even get one at all?
Harvard professor of psychology B.F. Skinner solved this question with lab mice, rewarding them in different ways when they would pull a lever.
The mice that received different sized rewards for pulling the lever would pull it compulsively, not knowing what they would get - or if they’d get anything at all - unlike the mice that received the same reward every time.
Today, marketers are using variable rewards to create internal triggers for everything from social media platforms to mobile gaming and email apps to create a compulsive desire to check their sites.
For your e-commerce store, get out of your typical rewards and switch them up from time to time to keep your customers on their toes! Consider initiatives like:
- Surprising visitors randomly with free shipping - sometimes you get free shipping, sometimes you don't
- Including a different sticker every time you ship a product to a customer, creating a sense of building a collection as well as brain-stimulating uncertainty about what the next sticker will be
- Randomly tweeting fun things - from coupons to cat pics - back to people who engage with you on Twitter
10. Price Anchoring
Price anchoring is a psychological principle that sets a product's value relative to another product.
ConversionXL's blog relays a study by renowned psychologists Amos Tversky and Daniel Kahneman, where test subjects were simply told the number 65 and then asked to estimate what percentage of African nations there were in the UN. Their average response was 45%.
They then told a second group the number ten; their average response was 25%. While the true answer is 23%, you can see how powerful anchoring can be when numbers are involved - including when pricing your products.
Tversky and Kahneman theorized that suggesting an initial figure to a person causes them to use that number as a starting point for estimating unknown quantities.
You can use this tactic in your e-commerce store simply by playing with your product page pricing. Take a look at this listing for a golf bag cigar humor from Cheap Humidors.
By anchoring the price at $17.99, the sale price of $14.99 looks like a steal. Importantly, seeing the "before" price or retail price helps with anchoring; if you show only the percentage saved or the dollars saved and fail to show the before price, anchoring fails.
You can use price anchoring with all the products on your site to make your prices seem even better than they are...a total no brainer!
11. Foot-in-the-Door Technique
Way back in the 1960s, two psychologists investigated the legitimacy of the foot-in-the-door technique. They called a group of housewives and asked them to answer some questions about the household products they used.
A few days later, they called the same women back and asked if they could send some men to their homes to take an inventory of the cleaning products they had. The result? The women who first agreed to answer the researchers questions were two times as likely to agree to the larger (and frankly, somewhat creepy) request.
The foot-in-the-door technique is a great way for e-commerce to build new customers leads simply by getting visitors to take one small step into the sales funnel. Benefit Cosmetics came up with a brilliant idea to get their foot in the door with potential new customers.
The pictures got Benefit a foot in the door with a huge pool of customers that they can now market to. Good deal, right?
This may sound blunt, but the ultimate goal of gift giving in e-commerce marketing is reciprocity. We want customers to return the favor with their wallets.
In January 2014, researchers asked 797 people to fill out a detailed questionnaire about the last time they had received a gift and if they gave back in return. They found that the greater perception of value someone had for a gift, the greater intention they had to give in return.
What this means for e-commerce marketers is this: for giveaways, free shipping deals, etc., it's important to focus on giving as much value as possible to get the best conversion in return. If you can blow customer's minds with a gift of tremendous value (whether real or perceived) you can improve conversions dramatically.
This doesn't necessarily mean actually giving away more. It could mean:
- Assigning a dollar value to the gift and messaging that amount (so people understand that their "free" set of steak knives is worth $59)
- Describing more about what went into the free gift - like 300 manhours spent running experiments on e-commerce sites to create this one ebook
- Avoiding the word "free" and instead creating a sense of supreme value, as Louis Vuitton does to message free shipping:
Also, since the perception of a gift's value is so important, marketers should focus their advertising on gift receivers, giving them a chance to talk about gifts they want on social media channels to create word of mouth for certain products that are perceived to be the best gifts.
13. Reframing Value
Reframing value is a psychological tactic that allows you to increase conversions by changing the way you describe the value proposition of your products. All this takes is a few slight copy changes and you can increase conversions dramatically.
For example, the Help Scout blog found a Carnegie Mellon study that boggles the mind in its simplicity.
Researchers changed the description of an overnight shipping charge on a free DVD trial offer from “a $5 fee” to “a small $5 fee”.
By adding one word to an offer, researchers at Carnegie Mellon were able to increase conversions by 20%!
Copy is your online salesperson. Think carefully about how you describe your products and the value you convey with them - it can make all the difference in your bottom line.
14. Time Salience
Have you ever been asked to attend one of those time share seminars promising a free vacation if you sit through it?
Evidently they work. Time share companies still use that strategy. You'd think everyone would be wise to the fact that there are no free lunches. And yet...
In September of 2013, researchers decided to investigate why such events might be successful.
They did a study offering free vacations to participants. They were trying to find when people considered their calendar when deciding to accept a free vacation giveaway.
It turns out that customers rarely take into consideration how much time they have for a free seminar unless the product giveaway will occur in the near-term. Even more, participants only considered their calendar at the point they had to commit to the giveaway rather than when they would receive the vacation.
The lesson here?
When doing an e-commerce giveaway (which are always "near term decisions"), make it as easy as humanly possible to enter the contest - and take the focus off the amount of time it will take to enter. Focus instead on the prize, or how little it costs to enter, like this jewelry giveaway.
Ah, the fear of missing out. We all feel it and none of want to lose out on something we desire.
Way back in 1975, researchers put two cookies in one jar and 10 in the other. Guess which cookies people valued more highly? Yep, the jar with two cookies, even though they were all the same!
In e-commerce there are great ways to show scarcity in your products, like showing how much of a certain item you have in stock:
Or you can show shipping scarcity like Amazon does, telling customers how much time they have to purchase before they can get it on a certain day:
16. Decoy Effect
The decoy effect capitalizes on the fact that people respond differently to the way products are presented to them, even if they offer the same amount of value.
Dan Ariely, author of Predictably Irrational, revealed the decoy effect in The Economist’s pricing model.
Notice how the print and print & web subscriptions are exactly the same price.
When Ariely presented this to his students at MIT, guess how many chose the the second option? Zero.
When Ariely removed the second option and gave a second group of students only the first and third option, the number of students who choose the more expensive option went from 84% to 32%.
Remember the jam experiment that showed the paradox of choice in the beginning of this post? If you contrast it with the decoy effect, you’ll see that they don’t contradict each other. Which means we can test different combinations of all these principles to optimize our stores, using the winning principles to persuade more visitors more often.
BONUS: Pull the Trigger… For More Conversions
As e-commerce marketers, we dream of the repeat customer who habitually shops in our stores. But too often we fail to think of the triggers we need to implement to create this habit in the first place.
Thankfully we have Nir Eyal, author of Hooked: How To Build Habit Forming Products, to help us in that department. Nir calls triggers “the actuators of behavior” or the spark plugs that help form habits. Here are the two kind of triggers, external and internal, and how you can use them to spark new habits in your customers.
These are the cues, like your alarm clock in the morning, that tell you what to do next.
In e-commerce, an external trigger could be a push notification telling a customer that a dress they wanted is now in stock:
Triggers can also include call to action buttons, shipping notification emails and even Google ads. Anything you use that tries to get a potential customer to take an action.
Developing internal triggers with customers is the golden ticket all e-commerce marketers hope to develop with their visitors.
Instead of being activated by external stimuli like ads or notifications, internal triggers come from our own brains when activated by emotions, like anxiety or boredom.
For example, mobile app developers’ main goal is to form internal triggers with their users, capitalizing on the fact that we check our phones over 34 times a day.
Think about Amazon.com before they were, well, AMAZON, the largest e-commerce retailer in the world. Their site design was awful, but it didn’t matter. Whenever people felt the itch to read, they wanted to be the first site people thought of to relieve that pain point.
They relieved the internal trigger people felt when they wanted to read by having the biggest selection, best prices, and fastest shipping, thus removing pain points and, most importantly, any desire to go to a bookstore.
The best habit-forming e-commerce sites entwine their products with the thoughts, emotions and routines of their users by using psychological principles to increase conversions.