How to Use Consumer Psychology in CRO

Consumer Psychology and CRO - Head With Cogs

Consumer psychology is the study of mental processes (attention, language use, memory, perception, problem solving, creativity, and thinking) and how they relate to consumers. Conversion rate optimisation (CRO) is all about understanding the barriers preventing our customers from converting. These barriers are usually not physical barriers (i.e. broken links) – they’re mental ones. Therefore, the more we understand the way our customers think and process information (mental processes) the better we’ll be at optimising our pages.

Consumer psychology studies show that we are on autopilot about half of the time. We’ve adapted to carry out many tasks without needing to expend mental energy. It’s similar to muscle memory and is hugely beneficial. If we needed to think about every action we do in detail, life would be completely overwhelming. Imagine the thought that would need to go into simply trying to click on a link on a webpage:

  1. You would need to instruct your right arm to lift up off of the keyboard and move across to the mouse
  2. Instructions would be sent to your hand and fingers to shape them around the mouse
  3. Your eyes would need to locate the cursor on the monitor
  4. Your hand would need to co-ordinate with your eyes to move the cursor towards the link
  5. Once the cursor is over the link the brain would need to instruct the index finger to push down on the left mouse button

We have all done this action so many times that we now just do this on autopilot. We give it no thought, and can often accomplish this in less than a second.

 

Applying Consumer Psychology to CRO

Consumer psychology can be applied to many aspects of CRO and when it’s done right it will result in improved conversion rates. As one consumer psychologist rightly points out – “we need to understand our customers better than they understand themselves”.

 

Consumer Psychology – Processes

We are habitual creatures. What this really means is that we employ a number of clever methods or processes to make our lives easier, namely: ease, loss aversion, heuristics, associations, and misattribution. I’ll quickly run through each of these and show how they relate to consumer psychology and CRO.

 

Ease

We are attracted to the path that is the least cognitively demanding – i.e. the easiest (the path of least resistance). In CRO we sometimes refer to this as reducing “friction”. Take landing pages as an example. As we know, best practice is to have just one call to action (button) on a landing page. The reason behind this is to keep things simple and focused. If there are lots of different links and too much information then this requires lots of mental processing – i.e. effort.

Another example would be the one page checkout vs. a long checkout funnel. Once customers have decided to make a purchase it’s in our interest to make it as easy (quick) as possible for them to part ways with their hard earned cash. This is one reason that a one page checkout, or at least a very short funnel, works better than the traditional funnels we saw on retail sites a few years ago.

Forms follow the same principle. Visitors are much more likely to fill out a short form which only asks for sensible information and is easy to use. Long forms with small fields require much more mental processing to work out which fields are mandatory and to persevere to the end. On this subject you’ll also notice that validation errors are much easier to correct when they are next to the corresponding field rather than all bunched at the top of the whole form.

 

Loss Aversion

In consumer psychology there is a concept call “loss aversion”. This refers to the fact that we are more sensitive to loss than to gain. It means that we will make decisions that minimise the risk of feeling bad in the future. It’s why CRO tactics like urgency messaging work so well. We don’t like the idea of missing out as we know that this will make us feel bad. Loss aversion can be used in many different ways by us conversion optimisers. One example used by many online retailers is to increase their average revenue per transaction by selling protection insurance on products. Try buying a TV from Amazon and you’ll get these options:

Consumer Psychology Protection Example - Loss Aversion

Many of us will choose to pay for the cover as we start asking the “what if” questions. It’s also clever how they include the 4 year option just under the 3 year one. Customers will do a quick mental calculation and some will decide that for £19 extra it’s worth having another year’s worth of cover. One test idea would be to further reduce the mental effort involved in this purchase by calculating for them how much it costs for the additional year. The message could then be: “Get 4 -year Breakdown & Accident Cover for only £19 more”. Another interesting test would be to try displaying the monthly figure rather than total – i.e. Get 3-year Breakdown & Accident Cover for only £2.64 per month.

 

Loss Aversion Study

In one loss aversion study performed by Dean Buonomano, participants were given £50 at the start. Then they had to choose between one of the following 2 options:

1) Keep £30, or
2) Gamble with a 50/50 chance of keeping or losing the whole £50.

The result from this experiment was that participants acted in a risk-averse way (only 43% decided to gamble).

The experiment continued and this time the exact same options were presented in a less secure way – i.e. emphasising ‘loss’ rather than ‘keep’ in the first point:

1) Losing £20, or
2) Gamble with a 50/50 chance of keeping or losing the whole £50.

When one of the actions was framed (more on this later) as a ‘loss’ the results were fascinating. Participants were much more likely to gamble (61%). The experiment was statistically significant.

You may be asking how does this apply to CRO? Well what we learn from this is that the way we present information on our website really matters.

  • Present things in a gain way – you’ll be more likely to get risk-averse behaviour (i.e. less sales)
  • Present things in a loss way – your visitors will be more likely to take a risk (i.e. more sales)

 

Heuristics

We use heuristics to simplify the path from thinking to acting. It helps us make decisions quicker. There are many different types of heuristics and many can be applied to help us improve our conversion rates. Take ‘authority heuristic’ for example. This occurs when someone believes the opinion of a person of authority on a subject just because the individual is an authority figure. We often see this used by retailers by getting a celebrity to endorse a particular product. One well known example is the recurring L’Oreal advert (Because You’re Worth It):

When you begin to examine the different heuristics we each use regularly it’s easy to see how they can be used in CRO.

Take the contagion heuristic for example. This causes an individual to avoid something that is thought to be bad or contaminated. For example, when eggs are recalled due to a salmonella outbreak, someone might apply this simple solution and decide to avoid eggs altogether to prevent sickness. When optimising websites we can use this to sell more of certain items. An online chemist for example may be able to increase their flu jab appointments or sales of certain medication with some clever messaging.

The scarcity heuristic suggests that if something is scarce then it is more desirable to obtain. This is commonly employed by hotel websites. A hotel listing will be highlighted to show the number of rooms remaining:

Consumer Psychology Hotels.com Example

 

Associations

Our minds work by making instant associations. What we perceive is driven by what we automatically associate with what we see. In his famous experiment, Pavlov used the unconditioned response of dogs salivating at the sight of food, and paired the sound of a bell with receiving food, and later the dog salivated to the bell alone, indicating that an association had been established between the bell and food. In user experience this could be the association that visitors make with common aspects of a website. For example we have seen the ‘burger menu‘ (aka ‘hamburger menu’) so often that we associate the 3 lines with a menu that will open when clicked:

Consumer Psychology CRO - Burger Menu

This is where there is a big crossover between UX and CRO. If we use the right design on the pages we want to optimise then the ‘associations’ that our visitors make (without even realising) will result in an intuitive site to navigate.

 

Misattribution

Misattribution is the notion that people often (and unconsciously) connect a feeling from something in the wider environment to the focus of their attention. The following is an example of misattribution taken from study.com:

Let’s say you have an argument with your spouse just before leaving for work. When you arrive at work, your boss brings up something that she would like you to improve upon. You respond defensively and walk off the job. The arousal from the argument with your spouse changed the way that you might have otherwise reacted to the comment from your boss. Unless you are aware of the transfer of arousal, you would likely believe that your boss had treated you unfairly and that walking off the job was a reasonable response.

I can’t think of a direct practical application of misattribution to CRO but it’s certainly something to be aware of when considering your customers. Not everyone will respond in the same way every time. We are all affected by different aspects of our lives, past and present, and these can have a huge influence on the way we act even though we are usually completely oblivious to this.

 

Consumer Psychology – Influences

Next we’ll take a look at the three key influences in consumer psychology: priming, framing and social proof. Each of these influence our customers in different ways and therefore can be used as tools in our CRO armoury.

 

Priming

Priming is the notion that the first thing that we experience often shapes how we interpret what we encounter next because it creates the start point for our mental journey. Like many of the previous concepts we’ve explored, priming occurs subconsciously so we’re usually not aware of its impact.

Consumer Psychology Priming - Buy Spectacles Eye Test

In 1999, North et al. conducted a consumer psychology field experiment in a grocery store. For two weeks, stereotypically French and German music were played on alternating days and the amount of French wine versus German wine sold was measured. Additionally, purchasers of wine were asked to fill out a brief survey, the results of which revealed that they were “unaware of [the] effects of music on their product choices.” As you’ve probably guessed, more French wine was sold on days when French music was playing and more German wine was sold on the German music days. A simple, auditory prime had a significant effect on buying behavior, that consumers were not consciously aware of!

One article I came across sums up nicely how we can use priming in digital marketing:

So what does this mean for digital marketing?  Well, it changes everything. Rather than seek to persuade or force people into buying, the central role of marketing becomes to simply capture attention and expose people to ideas that bring to mind positive mental associations for the product or purchase.

Take the following video for example where Arnold Schwarzenegger appears in a CompareTheMarket advert:

He isn’t actually endorsing anything or trying to convince or persuade us to use the site. He simply makes us smile which gives us positive emotional associations – no rational argument is necessary.

Priming can be as basic as using a bright, welcoming background colour on a webpage rather than a darker, more depressing colour. Or using bright, happy images rather than boring business men in suits telling you their insurance product is the one to buy!

 

Framing

Our evaluation is influenced by what’s around the focus of our attention – in consumer psychology this is referred to as framing. One study showed that 93% of PhD students registered early when a penalty fee for late registration was emphasized, with only 67% doing so when this was presented as a discount for earlier registration. In another example, researcher Lindstrom found that adding the sentence “maximum 8 cans per customer” to the price tag of soup cans caused sales to jump, even if no true discount was offered, because it gave the illusion of one.

Airbnb use framing on their homepage to set the right tone for their visitors:

Consumer Psychology Framing - Airbnb

 

The copy clearly indicates the type of holiday you’ll be looking for and the large copy and space between the other elements on the page gives the impression of relaxation and room to breathe – i.e. the same feelings as being on holiday! It sets the right tone and puts you in the mood for booking a holiday.

 

Social Proof

Social proof is the idea that we’re always monitoring what others do and we allow it to shape our own choices. This is used on many travel sites in the form of displaying how many people in your area have searched/booked etc. LateRooms use social proof quite heavily on their search results page:

Consumer Psychology Social Proof Laterooms

Social proof is also the reason that customer reviews and testimonials work so well. People assume the actions of others, in an attempt to reflect correct behaviour for a given situation.

 

Summary

Hopefully you’ve learnt some new concepts from this study of consumer psychology and how to apply it to CRO. Use these to get into the mind of your customers and to truly help improve the user experience. By doing this you’ll create some great test ideas which will result in improved conversion rates.

It’s easy to run tests to determine which version is better. It’s often not so easy however to explain why we see the results that we do. Consumer psychology helps us to understand our customers better and therefore should help us to put forward sensible explanations for the test results that we see.

 

Published on May 18th, 2017

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Author: Phil Williams

Phil is the founder of CRO Converts. He has had the opportuntity of creating successful testing and personalisation strategies for many of the UK and Europe’s leading brands.

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