Marketing to millennials is going to require a fresh perspective because traditional marketing tactics will fall flat. Don’t go fooling yourself, wasting your money in the wrong places or on the wrong tactics.
Well… now that I’ve sufficiently sounded the alarm… how do you gain the trust of millennials and bring them to your virtual door? This post will help you focus your marketing strategy on this customer segment.
“All businesses need to be young forever. If your customer base ages with you, you’re Woolworth’s.”Oh, and just so we’re on the same page, millennials are generally defined as those born from 1982 to the early 2000s. You may be thinking, “Why would I focus on marketing to millennials? Aren’t they living in their parents’ basements and drowning in student loan debt?” I thought so too. Until I did the research… Continue reading
1. The Ben Franklin EffectThe 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 ProofEveryone’s heard of social proof, of course. It’s covered everywhere in ecommerce marketing – here, here, here and here. It takes forms like:
- Video testimonials
- Starred ratings
- Product reviews
- Tweets, likes and social shares
3. Utility BlindnessWhat 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 ecommerce 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 BiasAs ecommerce 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 ecommerce 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.
“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 SeekingResearchers 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 ecommerce marketers take from this? Take a look at the success of ecommerce 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 DiscountingTalia 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. At Friendbuy we love when ecommerce marketers combine hyperbolic discounts with their email referral blasts, like this one from Brickell Men’s Products. 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 AversionIt’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 EffectWhat 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 ecommerce 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 RewardsWhat 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 ecommerce 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 AnchoringPrice 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 ecommerce 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 TechniqueWay 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 ecommerce 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. They created a social campaign called #realsies. Girls had to post a picture using their mascara on their real eyelashes to Instagram using the #realsies hashtag and they’d be entered to win a year’s supply of mascara. The pictures got Benefit a foot in the door with a huge pool of customers that they can now market to. Good deal, right?
12. ReciprocityThis may sound blunt, but the ultimate goal of gift giving in ecommerce 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 ecommerce 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 ecommerce 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: