It’s true.

Visitors who complete purchases, subscribe to plans, or hire your services, do so because they are laser focused on accomplishing a task to fulfill life and business goals.

This sharp focus makes visitors see and engage with only limited sections of your page, depending on their goals at each visit.

Related to unintentional blindness, change blindness, and selective disregard, a phenomenon called selective attention is responsible for this behavior.

Find out more on this human behavior, how it may affect your site conversion rates, and how to address it to increase conversions.

What Is Selective Attention Psychology?

Selective attention is our coping mechanism to process the information around us.

With the massive offer of sensorial stimuli in the world, our brain became adapted to filter what is important at each moment. And just ignore the rest.

Per second, on average, our eyes receive 10,000,000 bits (the smallest possible piece) of information, but the conscious brain can only process 40 bits per second. You can see below the enormous difference between the data available around us and the amount our brain is able to process.

This ability to focus keeps us alive and smartly productive.

With limited resources of attention, we learned how to channel our senses to both perceiving threats in the environment and finishing tasks faster to let our brain free to focus on new projects.

Let’s try it out. With a quick glance over the website below, what can you see?

A glance probably gives you just the image of the shoe, and the name of it, in white, at the upper left of the hero image.

But if you had a task in mind, let’s say you were looking to buy black shorts for playing football, your focus would be on the task and less on the prominent red on the page.

In this case, you would probably first look at the top of the page, right side, to find a search bar. The upper-right corner is still where 17% of visitors expect to find search.

This is selective attention. You focus on the important elements that help you accomplish a task. All other elements get ignored because they would just distract you and slow you down.

The gaze plots below show how visitors focus on information relevant to the task they want to complete.

Each dot in the glaze plot shows parts of the page where visitors fixed longer to read the text or see the details of an image. The larger the dots, the longer the fixation. Long fixations may be a sign of interest or, alternatively, a sign of confusion. The lines between the dots represent the saccades between the fixations. During the eye movement, which is extremely fast, visitors can’t register any visual data.

With the task of just “take a look at the page,” you can see participants did not waste time, or focus, on too many things.

Image source: NNGroup

But when asked to find out “to which places do these getaways go,” participants focused on the titles of the sections:

Image source: NNGroup

The focus switched to the images of the packages when participants were asked “which place looks the nicest to you?”

Image source: NNGroup

When scanning websites for information, visitors have an aim. With a goal in mind, they don’t pay attention to all elements on page, they rather focus on the useful elements for the task, so the brain can process just useful information.

Before reading on, watch the following video to understand what we mean.

Source: The Invisible Gorilla

Half of people watching this video also missed the guy crossing the screen dressed as a gorilla in the experiment conducted by Christopher Chabris and Daniel Simons. Participants were asked to watch the video and keep a silent count of the number of passes made by the people in white shirts. The gorilla spends nine seconds on the screen, but as people focused on counting the passes they could not see the disruptive intrusion.

If the experiment didn’t work for you, try again. But now that you know about the gorilla, he might be all you can see in the video. You’ll be waiting for the gorilla to show up. So, you can test this experiment using the video below on a loved one. Remember: ask them to keep a silent count of the number of passes made by the people in white shirts.

This shouldn’t be surprising. We do this all the time. We like to think we absorb all stimuli around us, but the truth is we wouldn’t even see a ghost close to us. When Tony Cornell, a parapsychology researcher, dressed as a ghost and walked across the stage of a movie theater, only 50% of the audience saw anything of the ghost appearance, and many could not describe it accurately, as an effect of in attentional blindness.

Just to have an idea of how much we miss around us, you can check the beginning of this video, for an experiment on how people see works of art, from The Van Gogh Museum Eye-tracking Project. You can follow where the participant focuses, and identify how much is left out. You can also check how the eyes focus on the task that needs to be accomplished.

To recap, selective attention means:

• We have limited resources to process sensorial stimuli, so we focus our attention to what matters most at the task we are currently performing.
• When visitors already know the location of elements they need on a website, they disregard other elements of the page.
• When visitors have expectations on the layout of a webpage, they focus on specific sections of the page and overlook other parts.
• If visitors think an item of the page seems useless based on its rough appearance, as perceived by peripheral vision, they ignore the item (in other words, visitors suffer from banner blindness).

You can check visitors’ selective attention as you follow the eye movement of the participants in this eye tracking on Delta.com. As participants accomplishing different tasks, you can see how the focus changes depending on the task and how much is ignored on each page.

Image source: Eye Tracking on Delta.com

How Can Selective Attention Affect Conversion Rates

If visitors ignore essential links, navigation paths, and sections of a page, you can tell it will be hard for them to convert.

Here are a few of the common ways visitors ignore information on your page.

1. Banner Blindness

As visitors focus on accomplishing a task on a website, they naturally ignore elements that look like ads. Mainly, banners.

The brain expects to find ads on banners, and understand those ads as a distraction from completing a task.

So, banners get ignored frequently. In general, over 70% of visitors tune out online banner ads.  This affects your conversion rates on PPC ads, of course, but also on your pages, if you display content in banner-looking designs.

Image source: tobiipro

2. Right Rail Blindness

As visitors are familiar with finding ads on the right column on websites, and we read from left to right, right rail blindness came into play.

For the most part, visitors ignore information displayed on the right side of the pages. With the raise of mobile screens, the right column is even on the verge of disappearing.

This can affect your conversion rates because people may ignore important information you display on the right side, even if it doesn’t look like a banner.

3. Change Blindness

Visual changes usually catch visitors’ attention. However, if the transition between changes has any type of interruption, visitors might ignore the changes, as the brain replaces the new visual field by a mental representation of the old field.

The interruptions could be page flickers, page reloads, blinking of the eyes, and saccades between gazes, to name a few.

Over 90% of visitors can detect changes with no visual disruption, but when the screen flickers, rotates, or a push notification comes along, then changes go by unnoticed.

This affects your conversion rates, for instance, if visitors can’t easily see the fields they need to re-enter to complete a form, if visitors can’t be sure about the progress or change on page after clicking on buttons and links, or if visitors can’t realize filtering options are working well when options change after reloading (as the image below shows).

4. Search Behavior

Website visitors can either follow a search or navigation dominant behavior.

Search dominant visitors will go straight to the search bar and ignore most other forms of finding information and products on your site.

Navigation dominant visitors will try the menus and links to go through the options in your site and usually ignore the search functionality.

Each predominant behavior can affect your conversion rates. If a search dominant visitor can’t quickly find the search on your site, they will leave without converting. If a navigation dominant visitor can’t make sense of your menus and navigation, they will also leave before converting.

You can see below visitors used menus and navigation, and completely ignored the search box on the top right side.

Image source: Usability

How You Can Work Around Visitors’ Selective Attention to Increase Conversion Rates?

The better you understand your website visitors, the better you will address selective attention to optimize your site for conversions.

Your site works well when visitors can successfully find what they need and successfully ignore everything else.

Here are a few ways you can increase conversion rates by helping visitors focus on the right elements on page.

1. Conduct Usability Studies

You need to understand:

• your visitors’ goals when using your site
• your visitors’ behavior when using your site

You can choose the usability method that makes more sense in terms of time and resources available, but make sure the results bring the right data to analyze why your visitors arrive at your site, and how they browse and convert.

You can follow the steps in this roadmap to guarantee an effective usability study.

Depending on the goal of your study, you can find excellent insights by conducting polls.

2. Focus on Visitors’ Goals

Once you find out your website visitors’ goals, you need to make it easy as possible for them to accomplish their goals.

• Make sure the site design highlights paths for both search and navigation dominant visitors.
• Assess if the information architecture on your site makes sense for your visitors. Change it if you see a different structure could help them find the right information faster.

Image source: Cludo

3. Declutter and Use White Space

To help your visitors focus on the right information, you should:

• Reduce clutter and noise.
• Make a smart use of white space.

Cluttering has a proven effect on change blindness. As this study shows, change detection decreases as the number of icons increase on screen.

You can check our case study on how decluttering and highlighting incentives increased conversions by 13.98% on product pages and 17.75% on cart page. Clutter on these pages was preventing visitors from recognizing the incentives and converting.

4. Be Careful with Banners and Right Column Content

As banners get frequently ignored, be careful when adding banners to your site, or banner-looking content.

• If you have essential information to display on a page, think twice if you really need to design it in a banner format. Anything resembling a banner won’t get much of visitors’ attention.
• Avoid using banner-looking content.
• Assess how your visitors use the right column on your website with usability studies. Adjust the content you display on this column according to users behavior on your site.
• If you do have banners, make sure they are positioned away from crucial content your visitors need on each page.
• Inside your banners, choose images that convey useful information to visitors.
• Use emotional targeting. Almost half of US adults between 39-45 believe online ads could be improved if the messages were funnier or spoke more to audience values. The same goes for content on your page. Make it emotional, so visitors spot what they need.

5. Use Functional Animation

Functional animation is a great way of drawing visitors’ attention and explaining changes on the interface.

• Make sure your animations have a purpose. After conducting your usability studies, you will be able to evaluate if a transitional animation could help on a specific attention issue your visitors might be facing.
• Choose animations that help your visitor in accomplishing the task they want to on your site. Animations that distract visitors from their goal won’t be well received.
• Be careful when using animation, because animations with no functional purpose can quickly get annoying.

Target.com uses a subtle animation on search results, with a turning arrow and a sliding down menu for filtering product options. This subtle change is enough to help visitors in searching and detecting change in the menu.

6. Use Visual Hierarchy

Once you understand your visitors’ goal on your page, you can better organize content to help guide visitors in accomplishing tasks on your site. Visual hierarchy organizes information, so visitors can quickly detect what section, link, or button on site they need to focus to fulfill their goal.

• Consider F-shaped and Z-shaped reading patterns.
• Pay attention to elements that affect visual hierarchy:
  • Size
  • Color
  • Contrast
  • Alignment
  • Repetition
  • Proximity
  • White space
  • Texture
  • Style
• Test your visual hierarchy with the blur technique.

Panike.com, a Portuguese Bakery, uses visual hierarchy to display their menu.

7. Use Pop-Ups and Modal Windows

Finally, pop-ups and modal windows are a surefire way of guiding visitors’ attention to accomplish their tasks and engaging with your site.

• Define the purpose of the pop-ups and modal windows. They should serve the general purpose of helping visitors accomplish their goal on your site, drawing attention to the tasks that visitors are performing.
• Some of the best practices for modal windows include:
  • size
  • location
  • clear instructions on buttons
  • clear close option
  • descriptive title
• As with other attention grab techniques, be careful when using pop-ups. As a form of advertising, they get a horrible reputation. Around 70% of internet users classify popups as intrusive and the most widely disliked type of ad.
• As annoying they might be, pop-ups and modal windows help increase conversions.

Walmart.com uses a modal window for cart content, after visitors click on “Add to cart” on product pages.

Conclusion

At first, selective attention seems an awful barrier to visitors converting on your site. If visitors are ignoring content on your page, how could they ever convert?

But this behavior is also good news.

If you learn how to direct visitors’ attention to fulfilling their goal on your site, selective attention is an ally on getting more conversions.

Just gather data and insights on your visitors’ behavior and you will be to better guide them in completing tasks on your site.

The post Selective Attention Psychology – How to Use the Power of Selective Attention Theory for Higher Conversion Rates appeared first on Invesp.

Everyone knows the power a fresh start has. It makes us feel confident, even overly capable of achieving whatever goal is in our sights. How many mediocre students do you know from high school who went on to get straight A’s through college? Probably more than you realize. A simple change of scenery and a clean slate is all many students need to discover they are capable of excelling.

A fresh start is a great feeling to have, and research confirms it has a powerful impact on our aspirations and behaviors. As a result, many psychologists, counselors, and goal-minded entrepreneurs are trying to apply the Fresh Start Effect to improve their lives or others.

But what impact can the Fresh Start Effect have in marketing? Some savvy marketers are already using it to encourage their audience to act and convert, whether they know it or not. Khalid wrote about creating a conversion plan for peek seasons and how that can help you generate more revenue. In this article, I will discuss the fresh-start effect, how it inspires people to act, and how marketers can use it to drive conversions.

The fresh-start effect: What pushes us to make new goals?

Complacency is a defining characteristic in a lot of people. Everyone wants to make changes to improve their health, social position, finances, and relationships, but more than often go year after year without taking any real steps to do it.

For most people, the driving force behind this inaction is self-perception. We focus on our past mistakes and let them convince us that we can’t do anything differently. Our failures and imperfections become a part of our identity.

The self-perception problem can be a challenge to overcome, but there are certain events that inspire us to look past our current or past imperfections and set new goals. These are called temporal landmarks.

Probably the most obvious example of a temporal landmark is New Years. It’s an annual disruption to the mundane that opens the door for us to start over. It inspires people to set new goals — even if we don’t ultimately keep them.

But other memorable dates in a person’s life can serve the same purpose. Everyone remembers the day they got in a car accident, won the lottery, or their child was born. Even if you got in a car accident years ago, but the day details are likely etched in your mind a lot more than what you were doing at lunchtime a week and a half ago.

Day-to-day life is mundane, making it nearly impossible to think back and remember what you had for lunch last week. But when a temporal landmark occurs, suddenly everything about that day, even your boring routines, stay crystal clear in your mind for the long term.

Researcher Michael S. Shum explains that temporal landmarks initiate new periods of clarity in our lives, that “emerge from and stand in marked contrast to the seemingly unending stream of trivial and ordinary occurrences that happen to us everyday.”

Whether they come from the calendar (National holidays, the back to school season, etc.) or other meaningful life events, temporal landmarks help us form memories and create new goals.

Researchers from University of Pennsylvania dug deeper into temporal landmarks and saw they are a powerful way to motivate aspirational behavior.

Calling it the “Fresh Start Effect,” they found that people are able to overlook their past imperfections and ordinary occurrences of their daily lives on days that serve as temporal landmarks. As a result, they take more actions to create change, including setting goals and looking for helpful resources to achieve them.

A drug overdose, for example, would be an important temporal landmark that initiates the Fresh Start Effect. When someone overdoses, they’ve reached their lowest point and have a near-death experience. Not only is it memorable, it’s an opportunity for a fresh start because there’s nowhere left to go from there but up. It’s easy to see how drug rehab centers can target their marketing strategy to encourage people to seek treatment after such an event.

Applying the Fresh Start Effect to conversion marketing

Drug rehab centers aren’t the only business type that can take advantage of the Fresh Start Effect to encourage audiences to convert. Temporal landmarks can help encourage behavior that leads to more conversions, better sales, higher retention, and more for every kind of business.

Here are 5 steps you can take to identify temporal landmarks relevant to your business niche and get the most out of the Fresh Start Effect for conversion marketing.

Step 1: Think beyond New Year: Identify the right temporal landmarks

New Year is definitely the most memorable temporal landmark that initiates the Fresh Start Effect. But it’s not the only occasion throughout the year that encourages people to set new goals and start new things.

As a marketer, you’ll want to identify other temporal landmarks that are relevant to your business. Temporal landmarks you might use include:

• Other federal holidays
• Birthdays
• Start of the school year
• Start of sports seasons

These are all general options — there are likely other very specific temporal landmarks that are relevant to your business. Here are a few examples of temporal landmarks for different business models:

Most marketers take advantage of calendric temporal landmarks to inspire action in their audience. If you want to really stand out, identify temporal landmarks that are unique to your niche that you can use to segment and inspire your audience. They can also be something you create and point out to your audience to inspire them.

Usually, it’s hard to target your marketing message to your audience’s most relevant temporal landmarks unless you gathered a lot of information about them in the signup process.

No one’s saying you should ask your email subscribers to offer up their birthday, anniversary, the day their kids were born, etc., despite the fact that those are valuable temporal landmarks to use for segmentation. [editor note: read more on how to create e-commerce emails that actually work and tips to create an engaging email marketing campaign]

But that doesn’t mean you can’t address them as part of your content marketing strategy to attract people to your blog and other content.

Allstate’s content marketing strategy is a great example of this in action. They have a whole section of blog posts and resources related to life’s big milestones: buying a home, getting married, expecting a baby, an empty nest.

Creating content based on these temporal landmarks can help them drive traffic from SEO, social media, etc.

They create a variety of content around these life milestones, and highlight their services as solutions — encouraging their audience to act and convert:

Once you’ve identified the most relevant temporal landmarks for your audience, you’re ready to build a marketing message around it.

Step 2: Redevelop the pain points your content addresses

As a seasoned marketer, you’ve already positioned your products/services to address your audience’s needs/desires. But if you want to really get the most out of the inspirational impact of temporal landmarks, you should take a step back and redevelop your marketing message with them in mind.

Start by focusing on goals your audience wants to achieve but think they can’t. These are probably some of the existing pain points you built from your buyer personas. Then, position your products/services as a solution, but use temporal landmarks to motivate your audience.

Here’s an example of this in action from financial management tool Mint:

This email has all the elements Mint needs to benefit from the Fresh Start Effect:

• An unmet goal (better financial health)
• A product or service that can help (a fresh new credit score)
• A temporal landmark (a fresh season that symbolizes new beginnings).

That’s a simple example of aligning your existing marketing message with a temporal landmark to inspire action. But there are other creative opportunities beyond this.

Next you can move onto encouraging aspirational behavior that might not have been a part of your audience’s existing pain points.

Here’s an example from meditation app Headspace:

Most people who download and try out a new app like Headspace do it because of mild curiosity, not with goal-setting aspirational behaviors in mind.

Headspace sends out this email after someone completed their first 10 minutes of mediation. It highlights that they already took the first step to becoming a consistent meditator, setting them apart from everyone else who hasn’t tried at all. That’s the temporal landmark they leverage to encourage people to try and pay for more meditation sessions.

Use temporal landmarks like this to help your audience realize new desires and goals.

Step 3: Relate to your audience through temporal landmarks

Once you’ve identified relevant temporal landmarks for your audience, how can you use them to encourage your audience to act?

The “Fresh Start Effect” researchers identified two main ways temporal landmarks affect online behavior. In their laboratory experiments, they prompted some participants to reflect on the meaningfulness of the 2014 New Year. They clicked on three times as many goal-related websites and spend 46% more time reading them.

Here’s the takeaway for marketers: Use temporal landmarks in your marketing message as a way to relate to your audience and encourage them to act.

This targeted Facebook birthday ad is a good example of this:

You can use temporal landmarks to tap into your audience’s sentimental side and encourage engagement. Animoto does this in their “Make 2017 Your Year of Video” email:

In it, they offer suggestions on how to document your next year through video and recap the previous year:

Use the sentimental power of temporal landmarks to encourage your audience to act: become a customer, use your services, etc.

Step 4: Encourage goal pursuit with your customers

Reminding your audience of temporal landmarks encourages them to act on aspirational behaviors. But the Fresh Start Effect researchers also found that people prefer to be reminded of goals they’re pursuing on temporal landmarks.

For example:

• When they labeled March 20th the first day of spring (instead of the third Thursday in March), 354% more people chose that day to receive reminders.
• When they labeled May 14th the first day of summer break, 657% more university students chose that day to receive reminders.

In conversions optimization, you can use the Fresh Start Effect as part of your communication strategy, either through the subscription process or to encourage goal pursuit.

Duolingo does a good job of encouraging goal pursuit using temporal landmarks:

You can also incorporate temporal landmarks into the conversion process, exactly like the researchers did with their studies. Start of the week, month, year, or semester also serve as “mental accounting periods” that help people distance themselves from past imperfections and pursue new goals.

The Fresh Start Effect researchers looked into how these mental accounting periods affected people’s exercise habits. Seven percent of people are more likely to exercise after a birthday, and:

• 33% at the beginning of the week
• 14% at the beginning of the month
• 11% at the beginning of the year
• 47% at the beginning of the semester

You can apply the same principles to any goal-pursuing venture related to your business.

So for example, an online investing tool like Betterment and Wealthfront that caters to college-age investors can include recurring payment options that land on these temporal landmarks. That would encourage people to sign up and pursue these goals.

Step 5: Maintain momentum with your audience

The gym’s always packed in January but we all know the things thin out by March.The motivation that comes from the Fresh Start Effect doesn’t last forever.

If you want to maintain momentum with your audience and encourage customer retention, you have to fight back against the factors that cause people to abandon their goals.

Research into New Year’s goal keeping has shed some light on the factors that help people succeed, namely more stimulus control, reinforcement and willpower. Marketers are positioned to offer positive reinforcement and encourage willpower with their content marketing strategy.

Even a simple follow up on another temporal landmark in your subscriber’s life can serve this purpose — like this birthday greeting from a yoga business:

Don’t look at temporal landmarks as a one time opportunity to encourage your audience to ask. Just like with any other marketing strategy, nurture your audience by reminding them of their goals and leveraging other temporal landmarks to inspire continued commitment to your business.

Wrapping up

We given examples in the past on different ways you can use emotional triggers to boost your ecommerce sales.

Temporal landmarks have been inspiring people to act for ages now, but research into how exactly they drive aspirational behavior is just beginning. It’s easy to see how marketers can apply these findings to help improve conversions — now we just need practical case studies on the ground.

Incorporate the Fresh Start Effect into your marketing strategy by:

• Aligning your existing pain points with temporal landmarks (E.g. Seeking treatment after an overdose).
• Creating new temporal landmarks to initiate the Fresh Start Effect (E.g. Taking the first step to becoming a consistent meditator).
• Encouraging your audience to make and work towards new goals (E.g. Learn a new language).

Exercising after New Year’s can’t be the only way fresh starts inspire people to act. Apply the Fresh Start Effect to your marketing strategy and track results to see the real impact it has on your audience’s behavior.

The post Fresh Start Effect – How to Use Fresh Start Psychology for Better Conversion Marketing appeared first on Invesp.

In today’s fast-paced world, understanding consumer psychology, and more specifically, your potential buyer, is more than a necessity.

Every decision your customer makes consists of several conscious and subconscious emotional triggers.

As neurologist Antonio Damasio argues in his book “Descartes Error”

“Emotion is a necessary ingredient to almost all decisions”

While most people believe the choices they make result from rational analysis of available alternatives. In reality, emotions are the main drivers in the entire decision-making process.

Damasio’s view is based on his studies of people whose connections between the “thinking” and “emotional” areas of the brain had been damaged.

While these people were capable of rationally processing information about alternative choices… they were unable to make decisions because they lacked any sense of how they felt about the options.

Now, there are several emotional triggers you can use to dramatically boost your revenue and drive your conversions to roof, while also acquiring and underscoring customer loyalty.

This post takes a look at the most common emotional triggers and shares few ideas and examples for introducing them into your own marketing activities.

1.Tell Stories

People love stories.

They appeal to the emotional decision making bits in ways facts and figures can’t.

As Princeton’s Uri Hasson puts it:

“By simply telling a story [a person] could plant ideas, thoughts and emotions into the listener’s brain.”

We as human beings, have been telling stories for thousands of years.

The reason?

Stories trigger emotions.

Gerard Zaltman found 95% of cognition happens inside our subconscious [emotional brain].

Now: How do you incorporate storytelling to boost your E-commerce sales?

First, Define your brand:

• What do you offer?
• What market need are you addressing?
• What makes your brand different?
• Who’s your brand for?

Second, Leverage storytelling:

Replace Product Descriptions With Product Stories

Tell your customers interesting stories related to the product.

Zady is a good example of a clothing and consumer goods e-commerce company using the power of storytelling in product descriptions.

Replace “About Us” Page With “Our Story/History” Page

Tell your brand story. How it all started? What inspired you? What problems are you trying to solve?  The team behind your brand?

For example: Trader Joe’s tells a good story on how it all started for them…

 Provide A Face To Your Brand

Harry’s does this very well:

Entertain Your Audience With Good-Old Stories

Gatsby is a shirt!!

2. Inspire Fear

Fear is an unpleasant emotion caused by the belief that something or someone is likely to cause pain or threat.

According to Academia.edu, Fear is one of the most frequently used motivators for getting people to respond to marketing of any sort.

But even though it evokes our emotions, it should rather be used delicately, because most people don’t like threats.

As Bart Schutz explains:

“Multiple variables have been found to influence the effectiveness of fear appeals, such as perceived severity, individual characteristics and -more important -susceptibility. But also the intensity of the fear: weak fear appeals may not attract enough attention, yet strong fear appeals may cause an individual to avoid or ignore a message by employing defense mechanisms.”

Why Fear Drives Conversions?

“Fear appeal” posits the risks that if you don’t “use” or “buy” a specific product or service – dire consequences will occur.

It is a deep evolutionary characteristic in humans that triggers us to avoid potentially dangerous stimuli.

In other words:

We’re driven toward things that give us pleasure and avoid which give us pain.

How To Use Fear Persuasively?

Multiple variables have been found to influence the effectiveness of fear appeals, such as, perceived severity, individual characteristics and more important – susceptibility.

Now, there are few ways you can to take advantage of the effectiveness of fear appeals in e-commerce:

1. Use personally relevant threats (not too small, nor too big).

For example,  You could take advantage of ‘the fear of missing out’ by offering limited time discounts…

2. Make sure you directly boost your customer’s efficacy, by convincingly offering your solution as easy and effective.

For example, Madewell does this well with all of it’s call to actions…

3. Provide a clear and strong call-to-action directly after/next to your scaring message.

According to Wheel of Persuasion, the most important ingredient in an effective fear appeal campaign is ‘perceived efficacy’

For example, this fear appeal calls for the viewers to wear a helmet – something easily implementable:

If your message is sufficiently scary and seems easy enough to avoid, then you simply need to give your viewers a call to action, or a way to assuage the fear (usually with your product or solution)

3. Leverage Greed

“Greed is good. Says Wall Street’s Gordon Gekko, greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love.”

Greed is commonly used in all sorts of persuasion. Just look at the use of the word ‘FREE’ in advertising.

Image Source:

Also, here’s how changingminds.org explained greed:

“It typically involves making the other person believe they are getting an incredible bargain (often without their apparent knowledge). Of course, they don’t get what they had hoped for, but they will do a great deal for you if they think you can give them something for virtually nothing.”

Greed + Free

You want to make your customers say:

“If I make a decision now, I will be rewarded”

‘Free’ is by no means a silver bullet but there are times when it is effective.

From the Hubspot blog, Emma Brudner shared great tips on using fear to sell:

1. Help your customers realize the cost of inaction. E.g “Limited time offer”
2. Emphasize the personal benefits.
3. Point out the hard ROI
4. Play up what they stand to lose.
5. Use words such as “reward” “free” “valuable” “exclusive” “all yours” “gain.”

4. Employ Altruism

Giving back is one of the most powerful tools you can use to enhance customer loyalty, increase brand awareness and boost your reputation within a community.

According to the Cone Cause Evolution Study:

• 85% of consumers have a more positive image of a product or company when it supports a charity they care about.
• 83% of Americans wish more products and services they use would support charities.
• 80% of Americans are likely to switch brands (equal in quality and price) to the one that supports a charity.

Therefore, not only will you boost your overall brand awareness and reputation… you’ll also significantly increase your revenue.

Why?

Altruism (giving back) provides a sense of belonging to your social conscious customers (more on that later)

Examples of companies using Altruism:

TOMS

TOMS started with one idea:

“For every pair of shoes purchased, a pair is donated to help kids all over the world who can’t afford shoes.”

They’ve grown from selling shoes out of an apartment to a $300m+ company in just 9 years, giving away over 45 million pairs of shoes to charity.

2. Tentree

Tentree plants ten trees with every product purchase. They’ve now planted over 12,682,850 trees worldwide.

You could start off with something simple, just like TOMS.

• Donate 1-3$ with every purchase
• Promote Local Businesses
• Participate in Holiday Food Drives
• Set Up a Collection Jar
• Hold a Contest
• Sponsor an Event

5. Encourage Reciprocity

The principle behind reciprocity is based on the idea that, we as humans feel obligated to reciprocate (pay back) those who do or give something to us.

This behavior was described in Robert Cialdini’s book, “Influence: The Psychology of Persuasion.” We should try to repay, in kind, what another person has provided us.

In e-commerce, Reciprocity is powerful.

All you need to do is give your customers something with perceived value and they’ll subconsciously feel obligated to repay you.

Free Gift With Purchase

Ulta beauty does this awesomely well by giving away a free bag if you purchase any $40 fragrance.

Ship A Surprise Gift

Each order from Gameklip included a pack of smarties:

And it made their customers happy…

Loyalty Points Program

For example: Gilt is motivating customers to spend more and be more active with their program. Some rewards include early access to sales, an exclusive first look at new products, and preferred customer service.

6. Use Social Proof

Social proof is a demonstration that other people have experienced your product or service –   thereby encouraging others to do so.

Marketers use social proof to increase conversions by easing the minds of worried customers.

Studies show nearly 90 percent of online consumers look at a product review prior to making a purchase.

Think about this for a moment:

When was the last time did you buy something online without reading a review or asking your friend about it?

Exactly… Zero times!

There are 6 major types of social proofs you can use to get that revenue lift:

• Customers – social proof from your existing customers or users (e.g. testimonials or case studies).
• Experts – social proof from credible and esteemed experts in your industry.
• Celebrities – social proof from celebrities or other influencers (e.g. celebrities who have bought your product, or visited your establishment).
• Crowds – large numbers of people who provide social proof (e.g. “300,000+ love “Yourawesomecompany”).
• Friends – e.g. 50 of your friends like “Yourawesomecompany”
• Certifications – a credible, 3rd party entity which certifies that you are a knowledgeable, high-quality or trustworthy source (e.g. “USDA Certified Organic”). (Source: OptinMonster)

For example:

Use a recommend-er like “Other people who purchased this item also purchased”

Display “# sold” and “# of people watching” as seen on every eBay listing.

Put total review counts on display, similar to how Airbnb lists reviews.

7. Build Trust

Trust signals are features or qualities of your site that inspire confidence, belief and assurance in the mind of the customer.

Experts at the Singapore Management University published an extensive study on the relationship between trust and consumers’ intent to buy.

The study revealed people are more likely to make a purchase from a website if they have both high levels of trust and low levels of perceived risk when using the website.

Now:

Here’s how to build trust with your e-commerce site and eventually increase sales:

#1 Social Proof (See above)

#2 Add Your Contact Information

When shopping online, most people have questions that can impact their decision to make the purchase.

You need to add various ways your customers to contact you or your team:

• Phone number
• Live chat during working hours.
• Email

#3 Add Trust Seals and Security Certificates

So what’s the deal with trust seals?

Actualinsights.com did a test and found:

“An overwhelming majority of 61% respondents have cancelled a purchase because trust logos were missing on the website.”

Image source:

Note: Trust seals/badges does not represent any technical security. It just makes a website look legitimate and professional.

On the other hand though, SSL certificates indicate the site is secure technically.

Wrapping It Up:

When evaluating brands, consumers primarily use emotions (personal feelings and experiences) rather than information (brand attributes, features, objective facts).

Each of the emotions outlined above will make a noticeable difference to your conversions.

But to get above-average results, you need to combine as many as you can.

Be responsible and always remember to look after what matters most: your customers.

It’s important to keep honesty and integrity front and center. As powerful as emotional factors in marketing can be, falling short when it comes to genuine copy and realistic claims can be disastrous.

What specific emotions are you using on your store? Did I miss it? Mention it in the comments below!

The post 7 Ways You Can Use Emotional Triggers To Boost Your E-commerce Sales (With Examples) appeared first on Invesp.

In 1979, psychologists Daniel Kahneman and Amos Tversky published a paper titled, “Prospect Theory: An Analysis Of Decision Under Risk”

 The theory states:

“People make decisions based on the potential value of losses and gains rather than the final outcome.”

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According to Kahneman and Tversky, losses and gains are valued differently, and thus users make decisions based on perceived gains instead of perceived losses.

For example, most people prefer winning $50 with certainty rather than taking a risky bet in which they can toss a coin and either win $100 or nothing.

However, Kahneman and Tversky also found:

The same people when confronted with 100% chance of losing $50 versus a 50% chance of no loss or $100 loss – they often choose the second option.

In this piece, we will look at how prospect theory works, the three biases of prospect theory (with examples), systematic patterns in thinking: other biases, and the importance of prospect theory.

Ready to dive in? Let’s get started.

How prospect theory works

Unlike the utility theory which models the decision-making process of rational agents, the prospect theory seeks to describe the conduct of actual individuals.

Prospect theory belongs to the behavioral economic subgroup and it describes how individuals are influenced by the possibility of a loss, than a perceived gain.

According to Tversky and Kahneman, this means that proposed losses cause a greater emotional impact on an individual than does an equivalent amount of gain, so given choices presented two ways—with both offering the same result—an individual will pick the option offering perceived gains.

The 3 biases of Prospect Theory

Prospect theory explains three biases people use when making decisions:

1. Certainty: “This is when people tend to overweight options that are certain and risk averse for gains.”
2. Isolation effect: “Refers to people’s tendency to act on information that stands out and differs from the rest.”
3. Loss aversion:  “When people prefer to avoid losses to acquire equivalent gains”

This post dives deep into these biases and shares few ideas and examples for introducing them into your own marketing or business activities.

Ready? Let’s jump right in…

1. Certainty

According to Li & Chapman:

“The certainty effect happens when people overweight outcomes that are considered certain over outcomes that are merely possible.”

In other words:

We would rather get an assured, lesser win than taking the chance at winning more [but also risk possibly getting nothing]

Consider this example:

Which of the following option would you choose?

1. 100% chance to win $900.
2. 90% chance to win $1000 or nothing ($0)

With option 1, you’re assured to get $900.

While with option 2, there’s a 10% chance you could get $1000 or nothing.

Studies confirmed that nearly 80 percent of people will choose option 1.

The reason?

Most people avoid the risk and take the $900.

Now, consider this example:

Which of the following option would you choose?

1. 100% chance of losing $900
2. 90% chance of losing $1000 or nothing ($0)

With option 1, you’re assured to lose $900…

And with option 2 you have a 10% chance of losing either $1000 or nothing – $0.

Most people would prefer the second option.

Why?

Because when aiming to avoid losses, we become risk seeking and take the gamble over a sure loss, in the hope of losing nothing.

Why certainty affects you and how to use it?

Since people would rather accept a small but certain reward over a mere chance at a larger gain.

To persuade them to take action, consider using the certainty bias to your advantage.

For example, you could:

1. Reward users who subscribe to your email list ‘X% off’ their next purchase

Old Navy does this well by offering 30% off:

This coupon is more appealing and more effective than a sweepstake of say, $1000 – a reward that is large, but highly unlikely.

2. Assure users will save ‘X amount of $’ when they order two or more

Amazon does this well by rewarding customers $100 who purchase two echo devices:

3. Offer free shipping over ‘X amount of orders’

Lulu’s does this well by offering free shipping over $50:

Now, using the certainty effect can result in higher conversions compared to using uncertain promotional tactics.

Customers immediately see value in the proposition offered and are automatically persuaded to purchase more.

But here’s the kicker:

A research done by cognitive lode urges:

“Uncertainty has had something of a harsh time over the years. It’s been bullied by its bigger, more established and confident brother, Certainty.”

• It creates more positive, exciting experiences. Since as humans, we get excited by the unknown.
• It is more powerful in boosting motivation en route to a goal
• Increases one’s investment of effort, time, and money in pursuing rewards.

Also, newer studies from the University of Chicago confirmed that uncertainty has untold power when motivating people about positive outcomes. It gives us feelings of excitement and enjoyment.

In one of the studies:

Two groups were asked to bid on opaque cups of chocolate coins. The cups contained either a certain amount of 5 tasty coins or an uncertain amount of 3 or 5.

Half from each group was asked to focus on the actual bidding process, whereas the other half was asked up front how much they’d be willing to bid for the coin cups.

The findings showed those who were made to focus on the process risked more money for uncertain rewards. They risked around $1.50 for the 3-5 uncertain coin cup, as opposed to only $0.80 for the certain 5 coin cup.

So what does this mean?

[Psychologist] Marvin Zuckerman had this to say:

“The uncertainty effect works best with ‘sensation-seekers’: those who have a craving for and desire to seek out positive experiences.“

Three ways you can use the uncertainty effect

• Add uncertain rewards to existing certain rewards

In order to foster ongoing motivation and higher return rates, use uncertain rewards in-line with certain rewards. [Kahneman and Tversky]

For example, soon after you offer your customers 10% off over the next purchase – you let them know that with all future purchases they’ll receive monthly discounts.

Here’s an example from Bolingo:

• Add uncertain rewards to Loyalty programs

Adding in uncertain rewards to existing loyalty programs will keep your customers excited and likely to invest more effort, time, and money in the future.

Here’s an example from Topps:

• Add uncertain rewards to incentivize loyalty behavior of existing customers

Since uncertain rewards can increase investment over time, frequently give away uncertain rewards to your existing customers.

2. The Isolation Effect

German psychologist Hedwig Von Restorff first documented the Isolation effect in 1933, and found:

“When multiple stimuli are presented, the stimulus that differs from the rest is more likely to be remembered.”

For example:

An item on a list which is a different color, size or font is more likely to be remembered than the other normal looking listed items.

Try to remember this list:

The chance is you’ll easily remember ‘February” because it stands out with a bigger size, different font, and color.

Why the isolation affects you and how to use it?

The Isolation effect [also known as the Von Restorff effect] can be used to your advantage by designing your website so that customers pay attention to what you want them to see and remember.

For example, you could:

1. Make use of shapes that stand out from the rest of the homepage to draw attention to certain elements

2. Choose a color that contrasts strongly with the rest of the site for your Call-To-Action.

Here’s an example from Obvi:

3. Use a wide range of words, tenses, and expressions to make sure important information catches the visitor’s attention

3. Loss Aversion

[We have given 13 different to use loss aversion to increase conversion rates in the past.]

Psychologically, the “pain of losing something is twice as powerful as the pleasure of gaining.”

For example, winning $100, then losing $80 feels like a net loss even though you are actually ahead by $20.

However, were we to first lose $80, then come back and win $100, it would shift our reference point and make it feel like a net gain.

Science Magazine did an experiment illustrating how humans find avoiding loss more urgent than winning something new…

Participants were handed $50 at the beginning and then given two options to choose from:

Keep $30 of the $50,

Or

Gamble the whole pot with an equal shot at either keeping the full $50 or losing the full $50.

57 percent of the participants decided to keep the $30.

The next group of participants was asked to:

Either lose $20 of the original $50, or…

Gamble the whole pot with an equal shot at either keeping the full $50 or losing the full $50.

61% of participants chose to gamble the $50.

Why?

Because this time, researchers put the game into a “loss” frame, even though the game itself really hadn’t changed.

The idea of losing $20 was more painful than keeping $30.

As Behavioraleconomics.com put it:

“It’s the reason why we hold onto things in our closets we aren’t wearing; why we pay for gym memberships we aren’t using.”

We tend to place higher value on a good that we own than on an identical good that we do not own (Kahneman, Knetsch, and Thaler in 1990)

Why loss aversion affects you and how to use it?

Loss aversion is one of the reasons we often see phrases like “last chance” or “hurry” in marketing campaigns.

Now, there are few ways to use this behavioral theory without being pushy…

For example:

1. You could incorporate fear of missing out by creating urgency and scarcity

Topman is a great example of how this sort of bias can be implemented on product landing pages for e-commerce stores.

2. Incentivize offers by offering limited-time coupons and discounts.

For example, Memebox offers shop-wide discounts and promo codes to their email subscribers.

3. Offer friendly nudges by sending push notifications and alerts

1-800-Flowers’ does this well by sending trigger-based push notifications with promo codes.

4. Offer free trials of your products or services for a limited period of time.

For example, most software companies use this to their advantage.

Systematic Pattern In Thinking: Other biases

Tversky and Kahneman also introduced a systematic pattern in thinking that affects the decisions and judgments that people make named: “Behavioral cognitive biases”

These biases impact how we buy, sell, think, feel, interact with friends and more.

This means, they also affect how your visitors think and feel about your site, your company, products, and services.

Few common examples of Cognitive biases include:

The Framing Effect

People react to a particular choice in different ways depending on how it was presented.

We tend to avoid risk when a positive frame is presented but seek risks when a negative frame is presented.

Image Source:

Negative Framed Vs Positive Framed Stimulus

Gerald Smith & Meera Venkatraman study found:

• Positive frames have a greater impact than negative frames on brand attitude.
• Enduringly involved consumers are more influenced by positive frames.
• Less-involved consumers are influenced by negative frames.

Image Source:

It has been said over and over again the “fear of loss” is more motivating than the “potential for gain”

People tend to avoid risk when a positive frame is presented but seek risks when a negative frame is presented.

The Bandwagon Effect

The Bandwagon effect is the tendency to do [or believe] things because other people do [or believe] the same.

We may hate to admit: But we like doing what other people are doing.

For example, If your visitor sees their friend using your product or service, they’re more likely to use your product or service.

And the more popular something gets, the greater the probability of even more people trying it.

So, how do you use the Bandwagon effect to your website?

Simple. Add social proof.

Fitbit does this well:

You can find a complete list of cognitive biases on Wikipedia or 65 more from neurosciencemarketing.com.

The Importance of Prospect Theory

1.  It’s useful in framing offers and the copy presented to site visitors and customers.

2. It can be used to improve people’s overall experience on your site. When people experience a terrible experience using a platform, they tend to remember it longer.

Having this in mind, we test everything and make sure user experience issues that will be frustrating are dealt with/minimized.

Final thoughts

People make decisions using several common biases.

Understanding these biases can help you persuade them to take action.

However, although prospect theory factors arose as a descriptive model, it offers no psychological explanations for the processes stated in it.

Furthermore, factors that are equally important to decision-making processes have not been included in the model, such as emotion.

Are you currently using any biases on your store or website? Mention it in the comment section below.

We’d love to hear your thoughts!

The post Prospect Theory: How Users Make Decisions appeared first on Invesp.

However, there is a dilemma here.

Although getting new customers to convert remains to be a challenge, once they do convert, returning customers love the site and experience. Would you disrupt and invest in something loyal customers seem pretty okay with?

To go the full site redesign route, you have to know your numbers to determine whether or not the disruption a redesign may cause to loyal and returning customers is worth it.

How can you juggle between a redesign and keeping all visitors satisfied?

Humans are creatures of habit.

Within a short period, website visitors choose a way of working around your website and form habits to these familiar paths. As you conduct A/B testing on your website or consider rolling out complete new redesigns, these habits can be detrimental.

Consider what happens every time Facebook releases an update to the site. Many platform users complain, although the changes that Facebook is bringing forth may be superior to the previous design. Yet, a few weeks later, these same users create new habits and get things done.

Find out in this article what visitor momentum behavior is, how it affects your conversion rates, and how you can prevent it from decreasing conversions on your site or application.

What Is Visitors’ Momentum Behavior on a Website?

Momentum behavior relates to the routine patterns (or habits) visitors take when completing tasks on your website. Any returning visitors adhere to specific successful paths they like to use around a website and interface, such as apps, software, ATM screens, you name it. Learning new paths or routines to complete old tasks requires an investment that users are not willing to make.

I recently had a conversation with some girlfriends about their shopping behaviors on mobile devices. One girl mentioned that she loves to shop on apps, although she always checks out as a guest user. I asked her: “So what’s the point if you aren’t storing your info on the app because ultimately that’s what they are there for.” She said that she really doesn’t like to store her information anywhere, and she periodically clears her mobile browser cookies, which is why she cannot use the mobile browser. Otherwise, she would lose her cart. She uses the mobile app primarily to store the items, and when she’s ready, she goes to the app and checks out anonymously.

This behavior could never be guessed by any of the stores she shops from, but it’s valuable information on the habits she has formed. The stores she purchases from would lose out on her business if they start requiring in-app purchases to sign in.

These are the three main features of momentum behavior:

• Visitors intuitively select a preferred way of accomplishing tasks on an interface.
• Visitors rapidly stick to the way they first found it, no matter if this is the fastest or best way of using the interface.
• Visitors do not want to go through the trouble of learning a new way of accomplishing tasks on the same website. The perceived cost of learning seems higher than the benefit of performing the same task in a faster, better way.

For instance, if you wanted to buy a new kettle, how would you go about the process on a familiar site like Amazon.com?

Any path you choose will (hopefully) lead you to your new desired kettle. Some paths might take longer, more time, and more clicks to find the product you want, but if you are a regular Amazon buyer, you probably already have your go-to routine for buying there.

If you like to use the search bar, you probably land on the Amazon homepage and instantly move your cursor to click on the bar. If you like to use the department’s option on the left navigation menu, you probably already position your cursor on the far left as soon as the page loads.

Which of these ways gets you faster to the right product page? Which of these paths is the easiest one?

It doesn’t matter. Really.

If you are a firm bar searcher, you will not switch to department category pages just because a study found out that navigation menus lead visitors to product pages faster.

You won’t try new ways of shopping each time you visit Amazon. That’s time-consuming. You just stick to one way of finding the products you want on-site. This one way feels fast and accurate to you.

Kara Pernice, Senior Vice President at Nielsen Norman Group, defines momentum behavior below:

Momentum behavior occurs when people look at but do not choose an option that could help them because they have already selected a course and are sticking to it. Even within moments, users can become loyal to the route they have chosen and oblivious to other interface elements.

Amazon spends a lot of time on understanding visitors’ behaviors, including momentum behavior. And think about it: when was the last time we saw a major redesign (full redesign, not just single elements) for the Amazon.com site? Conversion rates for Prime subscribers (returning and reoccurring customers) are more than 70%.

So, certainly, a redesign for Amazon can have a tremendous negative impact due to momentum behavior.

If you’d like to follow someone searching for a kettle on Amazon, you can check this eye-tracking video. It takes less than three minutes for this shopper to accomplish the task, from the homepage to category pages to the product page.

This usability case study on Amazon.com shows us that:

• 80% of regular Amazon shoppers are able to accomplish the task of completing a purchase in less than three minutes, as 60% of window shoppers and 40% of surfers.
• Between regular shoppers, surfers, and window shoppers, it takes around two minutes to over five minutes to accomplish the task of choosing a product on Amazon.
• Regular shoppers predominantly use links over the search bar.
• It takes window shoppers or what we describe as browsers (visitors at an earlier buying stage) more clicks to get to the product page and make a decision.

Note: both this case study and the eye-tracking video were conducted in previous designs of Amazon.com and Amazon.co.uk. But these designs already featured the department navigation menu on the left and the prominent search bar. If you’d like to check, here is the evolution of Amazon’s website through the years.

Let’s recap how momentum behavior works.

These are the three main features of momentum behavior:

• Visitors intuitively select a preferred way of accomplishing tasks on an interface.
• Visitors rapidly stick to the way they first found, no matter if this is the fastest, best way of using the interface.
• Visitors do not want to go through the trouble of learning a new way of accomplishing tasks in the same website. The perceived cost of learning seems higher than the benefit of performing the same task in a faster, better way.

Does Visitors’ Momentum Behavior Impact Conversion Rate Optimization?

illustration of image of scattered skittle and bowling ball on wooden floor

Yes!

If you are running a conversion rate optimization program on your website, you have at least 500 conversions a month, so you likely have a good traffic to your site and committed users who are already familiar to the interface and design.

Any change on the interface, design, and structure of your website is going to be disruptive to the routine, familiar experience of using your site.

Even when you introduce a better redesign, with a better interface and better UX, your loyal visitors will need to go through the learning phase of using your website again.

Momentum behavior will make it seem like a daunting effort, because users grew accustomed to the previous, maybe inferior, paths around the website.

How to Prevent Visitors’ Momentum Behavior from Decreasing Your Conversion Rates

When conducting a CRO program, you can take a few steps to make sure your loyal customers habits won’t get affected by the redesigns you want to implement.

Let’s see the three main procedures that can help you prevent a redesign disaster and ensure an increase in conversion rates.

1. Examine Usability Metrics to Determine the Quality of New Designs

Usability studies are powerful when you are discovering your visitors’ patterns of behavior.

Getting to know how visitors currently use your website will give you insights on issues to solve and navigational paths to maintain.

When conducting a usability study, make sure you define a scenario and assign a task to participants.

During this step, keep track of the task completion ratio by registering:

• How many participants are able to accomplish the task
• How long it takes participants to complete the task (in seconds or minutes)
• How many clicks it takes participants to complete the task

When you roll out a new design, conduct the same usability study to compare usability metrics for both the old and the new designs.

By comparing the task completion ratio, time to complete a task, and number of clicks to complete a task of your current design to with the new ratio, you can evaluate if the changes you made are positive and will lead to a better user experience.

You can use additional metrics to assess the quality of your new designs, including:

• Mouse movement patterns
• Click maps
• Answers to questions pre-task and post-task

This experimental study for improving the interface of the Amazon iOS app shows step-by-step usability testing for detecting issues and validation testing for the proposed solutions.

This is the scenario of the study:

“You’re in a bookstore, and you see this book that you want to buy. However, the price looks a little steep, and you’re wondering if you could find a better deal online.”

These are some of the tasks participants had to perform:

• Search for this book
• Now search for this book using a different method
• Read the good reviews
• Read the bad reviews
• Check the shipping address

By observing users during the task completion and interviewing them afterward, the researcher detected three major pain points in user experience.

For each pain point, the researcher created a solution that was also tested. Here is an example of the issue detected and the solution proposed:

Image source: Finding My Way Through the Amazon

When comparing the results of both tests, the new design outperformed the original.

1. For sorting and filtering reviews, the original design was not clear to participants.

The redesign achieved a better outcome.

2. For checking the delivery address, the original design confused participants.

The redesign offered a helpful solution.

3. For using the scan and voice search features, the original did not perform well.

The new design tackled the issue.

Images source: Finding My Way Through the Amazon

 Note: for this study, all participants had previous experience with shopping on Amazon on a desktop but were not familiar with shopping on the mobile app.

When the Aldo Group took on redesigning the complete omnichannel e-commerce experience for their customers, they relied heavily on research.

Grégoire Baret, Aldo’s general manager of omnichannel experience, points out that, through research, they found out 70% of their customers go online to prep for in-store purchases. Their website is used by visitors more as a tool to discover products than a place to buy the products.

Knowing that visitors’ ultimate goal on-site was not to complete the purchase, the Aldo Group worked on a redesign that honored the visitors’ goal. So, now, visitors can find a product online, check in-store availability, and connect with the store.

Through usability research, the redesign team at the Aldo Group also found out that their first beautiful design was confusing and complex to visitors. The final approved redesign looks more practical than the more abstract first option they created.

With this project, we did usability testing and invited consumers to give a very early visual reaction. We researched consumer reaction to the actual structure of the website, making sure the way we were naming the categories made sense to shoppers.

I think the consumer is our source of objectivity. Research has to be part of the development process; the consumer has to be part of the development process.

Grégoire Baret, General Manager, Omnichannel Experience

2. Do Not Launch to Everybody

While optimizing your site for conversions, keep in mind that new design usually performs better with new visitors.

We learned this firsthand at least 10 years ago.

We were conducting a major CRO program for an IRCE-500 online retailer. All usability metrics indicated that the new designs were better. Yet, our A/B testing program showed that the new designs consistently lost to the original website designs.

The particular e-tailer had a very strong following, and over half of its traffic was returning visitors. When we segmented the data, it became very clear. New designs beat the original designs with the new visitors segment. However, the same winning designs would be lost when we look at the returning visitors segment.

When you consider momentum behavior, you should expect returning visitors to convert less than new visitors through the implementation of a new, better design.

While there are many data segments that you should look at, it is imperative to segment your data between new and returning visitors.

Returning visitors might hate the new page layout, structure, or message because they are used to the old version. They have learned how to find their way of accomplishing tasks on the website and might not approve the changes you made. Even if the changes are true improvements.

With 1.94 billion monthly active users, Facebook is a great example of a platform that carefully tests and introduces redesigns, to make sure the new experience is not disruptive for long-time loyal users. The overall design and features of Facebook changed a lot over the years, but both minor and huge changes were implemented gradually.

Image source: PCMag

For the Home redesign to introduce the News Feed, the Facebook UX team combined different methods of research with a group of regular users.Marco de Sa, Facebook’s UX researcher at the time, assigned to Home, explains that this research was unique in terms of following up with users:

One of the things that we did as research was running a bunch of diary studies; so we had people providing feedback over time, quite frequently, every week. I’d interview or get feedback through surveys, questionnaires by a bunch of people that were using the product, and that helped us understand how people would get interested more in some types of content or less over time. It also helped fine-tune the algorithm that actually provided levels of content that shows up on cover feed. The product actually changed a lot.

Being a platform that deals with many frequent returning visitors, Facebook is careful in testing new features with loyal users. For Home redesign, they closely followed the interaction of participants over the course of a month. As Marco de Sa points out:

Because people are absolutely fascinated the first time they see cover feed; and it’s just a surprising experience. We were trying to understand how would that change over time after the first experience; so for that, we used a diary study.

The Home redesign was a major change to Facebook. To make sure the change addressed users’ behavior, the researchers chose to test the new features with regular users, who could better give insights on how the interaction with the redesign would take place over time, from first impressions to getting used to the News Feed.

3. Be Aware of the Time of Adjustment

So, you tested and selected a winning new design to implement on your site. The testing showed a promising increase in conversion rates. The changes were carefully considered by researchers, designers, and engineers.

You did all the due diligence to ensure there was no A/B test data pollution or that you had a false positive in your data.

Now, it is time to launch the new website redesign for ALL of your website visitors.

But during the first week, conversions decrease. And you don’t see any improvement during the entire first month.

As scary as this sounds, be prepared to endure a beginning period of lower conversion rates.

As your loyal, returning visitors need some time to adjust to the new design, momentum behavior may play along and decrease conversions.

No matter how better the new design is, always consider a one to two-month adjustment period to let your visitors get used to the redesign.

The higher the percentage of returning visitors to your site, the more you have to worry about decreasing conversion rates in the first two months after launching your redesign.

You can check in the video below the first few months of decrease in conversions during a conversion rate optimization project, followed by a significant increase in the subsequent months:

What If, After All These Steps, Your Redesign Is Still Failing to Increase Conversions?

What if you did everything right, tested the new design, and everything in it looked good, but when you roll it out, your conversion rates (or revenue) tank?

This is a complex problem that some clients suffer from and come to us to find a solution for.

The first step is to examine your analytics and determine how the new design is performing for new versus returning visitors. Are we seeing lower conversion rates across all visitor segments? Or are they just returning visitors?

If you are seeing lower conversion rates across all visitor segments, then you are NOT dealing with momentum behavior anymore.

You most likely have rolled a false positive design, or you have introduced technical problems during the new design rollout.

You have to determine the reason for the lower revenue. Is it momentum behavior, or is it something else? In the end, this does not become a conversion optimization question. It is a business decision question.

At what point do you pull the plug on the new design?

Should You Conduct an A/B Test for a New Website Design?

I often hear this question from clients. And it might be a bit strange to include it in this article. But there are a few things you should consider:

• There is a chance that the new website design will do worse for returning visitors. The decrease in revenue will depend on the percentage of returning visitors in your website traffic.
• There might be technical challenges in implementing the A/B test across a new website design versus an old design. Our recommended approach in this case is to conduct the test as a split URL test. So, if the old website resides at www.mysite.com, then the new website design should reside at www.mysite.com/new-design.
• How will you handle the business question if the A/B test reveals that the new website design performs worse? Let’s say you invested a few months in creating the new design (technical and design hours and the cost associated with that). Are you willing to pull the plug on the new design? That is the real question that should be considered.

Conclusion

Momentum behavior is a pattern visitors stick to when using your website. This familiar route is sometimes responsible for a decrease in conversion rates after you launch a new design on your site.

When you are conducting a CRO program on your website, you must be aware of:

• Carrying usability studies to uncover problems on your site and to validate the solutions you come up with.
• Segmenting new and returning visitors when carrying out research studies and A/B tests.
• Allowing one to two months for visitors to adjust to the new design you implement (expect lower conversion rates in this period).

For the new designs you implement, here are a few tips to help you out in addressing visitors’ momentum behavior:

• Pay attention to users’ pattern behaviors.
• Design for beginners, intermediates, and experts.
• Notify users about the changes you will implement.
• Be careful not to hurt loyal users.
• Consider launching a beta version.

The post Behavioral Momentum: Are Visitors in Love with Your Old Site Design? appeared first on Invesp.

• Losses terrify us as human beings. The possibility of losing what’s closest to our hearts and wallets impacts our decision-making.
• According to old wisdom, a bird in the hand is worth two in the bush, but that’s not always the case when we process our decision-making, especially when cognitive biases come into the picture.
• How you frame your offer helps how your customers perceive if you’re helping them save some money or lose it.

What Is Loss Aversion?

• Loss aversion is an automated response in behavioral economics that facilitates decision-making and helps us avoid loss at all costs.
• As humans, we go through tiny millions of decisions. On food, we overlook over 200 decisions daily.
• We’ve developed mechanisms to help us reach decisions faster to cope with overflowing choices.
• The riskier the context, the more loss aversion affects our decision-making. 

Loss Aversion On A Riskless Context

• An experiment gathered three groups of people: sellers, buyers, and choosers of coffee mugs. 
• The sellers received a coffee mug; they would have to decide on a selling price. No one wanted to sell their mugs for less than $7.12, while the buyers evaluated the mugs and established $2.87 as the maximum they would pay for acquiring them.
• Between the $7.12 and the $2.87 price evaluations lies a gain/loss perspective. Buyers saw the mug as a gain, so they attributed a lower value to it, as they were cautious about not losing money either. On the other hand, Sellers saw the mug as a loss of one of their goods, so they attributed a higher financial value to it.
• What about the choosers? This group could choose between gaining a mug or gaining money. Loss aversion plays upon somewhat risky situations than riskless ones such as the mug or money dilemma. The choosers didn’t overprice nor under-price the product because there was no risk involved. They would gain something, either way, be it money or a mug.

Loss Aversion In A Risky Context

• In this context, we’re examining patients’ reactions to a brochure on preventing advanced breast cancer.
• For the first group, the content emphasized the importance of performing self-examination. For the second group, the brochure highlighted the losses of not performing a self-examination.
• Scared by the possible losses, the second group indicated higher positive attitudes and behaviors related to the exams.

A Case Study On The Capuchin Monkeys

• Scientist Santos and her team created a non-human market where they introduced tokens as a means of exchange to get grapes.
• Soon enough, the monkeys understood they could get food if they handed one of the tokens.
• With time, the scientists started to change the offers, which changed the value of each token. Instead of getting one grape for one token, monkeys could get two or three grapes. With the change in offers, the monkeys had to decide between safe and risky bets.
• The scientists framed these bets differently in terms of loss and gain.
• In one of the scenarios, the monkeys could choose between indeed receiving one grape for one token, plus a bonus grape, or betting on receiving three grapes, two as a bonus, with the risk of getting just one grape (no bonus). In this gain perspective, monkeys always opted for the safe bet, the guy offering one grape plus one bonus every time.
• In the loss scenario, the monkeys started receiving three grapes for one token. But they had to make decisions on how many grapes they would lose. With these two scenarios, scientists could show monkeys, as humans alike, to avoid the certainty of loss and shoot for possible, uncertain wins. 

Loss Aversion In Marketing: Framing your offers

• The not-so-hidden secret to employing this technique? Just frame your offers in terms of loss instead of framing them in terms of gains.
• When tested among other cognitive biases on an e-commerce platform, loss aversion outperformed its counterparts, reaching the highest increase in conversions and the highest mean scores for maximizing page views, as Daugirdas Jankus found out in his research at the ISM University of Management and Economics.
• If you want to highlight your offer from the perspective of loss aversion, make it risky, and offer a referent to base the comparison.
• Discounts are a great way to reinforce loss aversion. Just tell your visitors they could be spending more to buy the same item or service. 
• With specific offers and clear deadlines, coupons frame the benefits of getting a product in terms of loss. 
• Receiving a free trial or sample automatically makes users feel like owners. Once this is established, they don’t want to lose the product.
• Pre-order deals play upon loss aversion by offering discounts and bonuses and providing early exclusive access to new items. Early access creates an ownership people want to preserve.

Here’s A Longer And More Detailed Version Of The Article.

Losses terrify us.

The possibility of losing what is close to our heart, or wallet, impacts our decision-making process.

Naturally, we avoid going through any losses, but our brains have mysterious ways of averting losses and falling into risky situations.

A bird in the hand is worth two in the bush, old wisdom has taught us. Although that is not always how we process our decisions, especially when cognitive biases come into the picture.

So, the central question is: can you help your customers in making decisions that will keep the bird/dollars in their hands, by minimizing their losses? The answer is in how you frame your offers.

You will find in this article three leading experiments on loss aversion.

You will take a look as well at loss aversion outperforming other cognitive biases on increasing conversion rates for an e-commerce platform.

And you will also find inspiration in 13 marketing strategies to trigger loss aversion online.

Ready?

Let’s start!

What is Loss Aversion?

As one of our automated responses in behavioral economics, loss aversion facilitates decision-making, by leading us to avoid losses at all costs.

Decision-making is hard business.

Buying a car or committing to a mortgage stand out as major, energy-draining decisions. Not to mention choosing a career.

But we go through millions of tiny decisions as well. On food alone, we overlook, on average, 200 decisions a day. To cope with overflowing choices and prevent decision fatigue, we have ancestral mechanisms to help us reach faster decisions, based on our previous knowledge and interpretations of the world that surround us.

Our decisions may seem to follow a rational, clear, straight-forward process, but that is just our brains deluding us. We adopt a less logical route when evaluating our choices.

For instance, if we had to decide between gaining 10 dollars or avoid losing 10 dollars, we would avoid losing the money we already have. At a first moment, our happiness for a 10-dollar win should have the same intensity of our sorrow for a 10-dollar loss. But no! The feeling of loss is way deeper and more intense than the joy of gaining.

So, we avoid losses at all costs, and make decisions based on this cognitive bias.

The riskier the context, the harder loss aversion plays upon our decision-making. To better understand this correlation, let’s talk over a cup of coffee.

Loss Aversion on a Riskless Context

For a riskless situation, an experiment gathered three groups of people: sellers, buyers, and choosers of coffee mugs; as Nathan Novemsky, from Yale University, and Daniel Kahneman, from Princeton University, reminds us.

The sellers received a coffee mug they would have to decide on a price for selling. No one wanted to sell their mugs for less than $7.12, while the buyers evaluated the mugs and established $2.87 as the maximum they would pay for acquiring them.

Between the $7.12 and the $2.87 price evaluations lies a gain/loss perspective. Buyers saw the mug as a gain, so they attributed a lower value to it, as they were cautious in not losing money either. Sellers, on the other hand, saw the mug as a loss of one of their goods, so they attributed a higher financial value to it.

What about the choosers? This group could choose between gaining a mug or gaining an amount of money. Different from the sellers, this group would not receive a mug and then exchange it for money, they would either get a mug or money.

How would they put a price on the mug? Those who chose money over mug evaluated $3.12 as a fair amount to receive. They didn’t see the mug as something they already owned.

Loss aversion plays upon rather risky situations than riskless ones as the mug or money dilemma. The choosers didn’t overprice nor under-price the product because there was no risk involved, they would gain something either way, be it money or mug.

However, in this case, choosers’ evaluation of $3.12 almost matches buyers’ predisposition to pay $2.87. This low difference suggests that, in regular purchases, buyers’ expectation of exchanging money for an item diminishes the impact of loss aversion. Buyers didn’t think they were losing money if they spent $2.87. If loss aversion showed up for this decision, buyers would have set much lower prices in comparison to choosers.

In risky situations, loss aversion certainly comes in. Let’s see how this cognitive bias helps people take action when a life-threatening disease is involved.

 

Loss Aversion on a Risky Context

Designed by Freepik

Just to make sure we are at the extreme of a risky context, let’s check patients’ reaction to a brochure on preventing advanced breast cancer.

Two groups of patients received almost identical brochures on breast self-exam. For the first group, the content emphasized the gains of performing self-exams, while the second group received a negatively-framed brochure, highlighting the losses of not performing the self-exams.

Scared by the possible losses, the second group indicated higher positive attitudes and behaviors related to the exams.

As the disease is scary enough, and the content on both brochures was similar, a rational reaction would be a high increase in self-exams in both groups of patients. But loss aversion drove the decision of one of the groups. Framing the self-exams in terms of loss, instead of gains, led patients to take action.

No, we are not the rational decision-makers we wish we were. And we are not alone. As it turns out, capuchin monkeys are loss avert, too.

 

Undeniable Loss Aversion

Designed by Freepik

So far, we talked about loss aversion acting upon decisions on financial and health matters. It all seems pretty human. But, surprisingly, capuchin monkeys display the same cognitive bias for economic decisions, as scientists at the Comparative Cognition Laboratory at Yale University found out.

You can learn how the scientists created a non-human financial market in “A Monkey Economy as Irrational as Ours,” Laurie Santos’ TED Talk. In this market, Santos and her team introduced tokens which the monkeys could exchange for food. Soon enough the monkeys understood they could get food if they handed one of the tokens.

With time, the scientists started to change the offers, which changed the value of each token. Instead of getting one grape for one token, monkeys could get two, or three grapes. With the change in offers the monkeys had to make decisions between safe and risky bets.

The scientists framed these bets differently, in terms of loss and gain.

In one of the scenarios, the monkeys could choose between surely receiving one grape for one token, plus a bonus grape, or betting to receive three grapes, two as bonus, with the risk of getting just one grape (no bonus). In this gain perspective, monkeys always opted for the safe bet, the guy offering one grape plus one bonus every time.

In the loss scenario, the monkeys started out receiving three grapes for one token. But they had to make decisions on how many grapes they would lose. One of the guys always offered two grapes. This was a safe loss. The other guy sometimes offered three grapes, or just one grape. This was a risky loss. Rationally, the monkeys should choose the safe guy, with the safe loss, but acting on loss aversion, and mirroring human decision-making, they always made the risky decision of trying to keep more grapes, losing to risk one more grape in the transaction.

With these two scenarios, scientists could show monkeys, as humans alike, avoid the certainty of loss and shoot for possible, uncertain wins. Monkeys treat losses as more important than gains, just as we feel losses more intensely than we feel the gains.

The gain/loss scenarios also show the decision-making was based on the referent. The monkeys were considering taking the risky action when comparing the choice to the immediate option. They could not evaluate the general picture of receiving two grapes for one token, which was a gain already, when compared to the initial stage of one token buying one grape.

We need an enormous effort to understand reality in absolute terms, so, when making decisions, we use a baseline as reference. In evaluating a gain or loss scenario, we always chose a stand point of reference to base our assessment. This reference might trick us, as it happened with the monkeys and their decisions on trying to get more grapes.

When a close referent makes us lose sight of larger, more distant references, myopic loss aversion comes into play. Investors, in special, fall prey to this bias, as they tend to view their investments under short-term lenses. A larger gain accumulated within a year, for instance, gets dismissed by a recent minor loss over the last month.

As core as these biases are, they must have been shaping our decisions for a long time. Indeed, they have, and marketers could see them before scientists named them. As Robert Collier signals to us in The Robert Collier Letter Book, first published in 1931:

There are only two reasons why your reader will do as you tell him to in your letter. The first is that you have made him want something so badly that of his own volition he reaches out for your order card to get it. The other is that you have aroused in him the fear that he will lose something worthwhile if he does not do as you say.

 

Loss Aversion in Marketing: Framing Your Offers

When you want to inspire fear, be definite! Be specific!  Robert Collier

Inspiring the fear of losing: a powerful technique since the 1930s.

The not-so-hidden secret to employ this technique? Just frame your offers in terms of loss, instead of framing them in terms of gains.

When tested among other cognitive biases on an e-commerce platform, loss aversion outperformed the counterparts, reaching the highest increase in conversions and the highest mean scores for maximizing page views, as Daugirdas Jankus found out in his research at the ISM University of Management and Economics.

Along with loss aversion, Jankus tested the countdown effect, the bandwagon effect, the gain effect, and a control (no effect) variation. For one week, in a website with an average of 21,000 weekly sessions, the biases were tested for page views, view time, page value, and conversions. A weekly test on this platform guaranteed at least 400 unique session views for each of the page combinations with each bias.

The control variation, with no effects on, performed poorly for conversions, time on page, and all the other metrics. Pages equipped with cognitive biases had better overall conversion rates.

The messaging tested by Jankus was meant to trigger different cognitive biases on visitors of a food delivery platform:

Cognitive Bias	Messaging
Loss Aversion	The meal is already reserved! Do not miss a chance to order it!
Countdown Effect	Order your meal in [timer] and we will deliver it to you by [delivery time]!
Bandwagon Effect	This meal was already delivered to 100+ clients! Be one of them – Order Now!
Gain Effect	The faster you order – the faster you get!

 

You can see the messages above frame decisions from different perspectives. For loss aversion, the message implies that the meal already belongs to the visitor.

Difference Between Loss aversion and Risk aversion.

Loss aversion and risk aversion are related psychological concepts in the field of behavioral economics, but they have distinct meanings and implications:

Loss aversion:

Loss aversion is a cognitive bias where people tend to prefer avoiding losses over acquiring equivalent gains. In other words, the psychological impact of a loss is generally perceived as more significant than the pleasure derived from a gain of the same magnitude. This phenomenon was first described by psychologists Daniel Kahneman and Amos Tversky as part of their Prospect Theory. Loss aversion can lead to suboptimal decision-making, as individuals might be overly focused on avoiding losses, even when the potential gains outweigh the risks.

Risk aversion:

Risk aversion refers to the preference for avoiding uncertainty or taking on risk in decision-making situations. A risk-averse individual would typically choose a safer option with a lower, but more certain payoff, over an option with a potentially higher payoff but also a higher degree of uncertainty or risk. Risk aversion is a natural human tendency, as people often want to minimize the potential for negative outcomes. However, it can also result in suboptimal decision-making when the potential gains of a riskier option significantly outweigh the potential losses.

In summary, loss aversion is specifically concerned with the asymmetric psychological impact of losses versus gains, while risk aversion pertains to the general preference for avoiding uncertainty and risk in decision-making situations. Both concepts can influence human behavior and decision-making, sometimes leading to suboptimal choices.

How to frame loss aversion on your offers.

Let’s draw three guidelines from the three experiments of buyers under-pricing mugs, women acting on disease prevention after reading a negatively-framed brochure, and monkeys risk-betting to keep more grapes:

• Frame the offer in terms of loss.
• Make it risky.
• Offer a referent to base the comparison.

Let’s add three of Collier’s advice:

• Inspire the fear of losing.
• Be definitive, by setting a timeframe.
• Be specific, by stating a clear loss.

To sum it up, let’s check 13 techniques online vendors are using to frame loss aversion in their websites:

1. Discounts

The first money-saving technique that comes to mind.

If your goal is to inspire the fear of losing money, just tell your visitors they could be spending more to buy the same item or service. This is old, classic incentive.

DiscountHockey.com offers hockey gear and apparel at reduced prices, as you can see in one of their product pages:

How does Discount Hockey reinforce the discount?

They repeat the offer three times, in three different formats. In the role of the referent, the original price is stroke through. “Item is on Sale” is announced in a contrasting color, red. “Clearance – Save 58%” is declared in bold.

The offer is specific, 58%, and definitive, with few items in stock (zero items in this case).

You will notice that sometimes discounts belong to the website’s value proposition. At Orbitz.com, for example, deals are the essence of their offers.

How does Orbitz reinforces the deals?

They specify the offers, as “save up to 45%” and “save 10 dollars.” There is a timeframe for acquiring the deals, so, again, from the buyers’ perspective, it is better to make the purchase soon, from this site, instead of buying somewhere else for a higher price.

Orbitz uses repetition as well to reinforce the losses. “Deal” appears seven times in the screen below, and “Save” appears five times:

2. Coupons

Coupons are a long-established tradition.

From paper to digital, e-retailers offer coupons on-site, newsletters, as well as in affiliate programs with deal websites or micro-influencers’ sites.

With specific offers, and clear deadlines, coupons frame the benefits in terms of loss. If clients do not use the coupons in time, they risk losing money in purchases of the same items at a higher, regular price.

How do TheKrazyCouponLady.com and Coupons.com, for instance, advertise the deals?

They use repetition of terms, as “save” and “buy 1, get 1.” They state percentages and values of savings, as “$490.98 Available Savings.” They group the coupons in categories, so visitors can easily assess the discounts.

3. Free Trials and Samples

For saving money, free trials and samples loom large as customers’ favorites.

By receiving a free product or sample service, prospects become owners. Ownership makes the sample more valuable, as the coffee mugs priced around $7.00. Once prospects establish the ownership, they do not want to lose the item, or sample service.

An extreme example of successful free sampling comes from The Brazilian author Paulo Coelho. Once his books were pirated and distributed for free around the world, he experienced an astounding growth in sales.

Free trials of software as a service, as Netflix, Spotify, and Evernote, to name a few, also induce users to subscribe to avert the loss.

Although certain consumers may not be willing to pay the market price to try a good, they may pay the market price to avoid losing that good.

Sephora.com offers free samples the customers can choose to add to the basket, before checking out.

4. Pre-order Deals

Pre-order deals play upon loss aversion by offering discounts and bonuses, but also by providing early exclusive access to new items. Early access creates an ownership people want to preserve.

The time frame for buyers’ action is well determined in pre-orders, as the offer expires on launch day.

Jeff Goins, for instance, has a pre-order bonus for his new book. If customers skip this period for purchasing the book, they will lose money on the long run, when they will want to buy the bonuses separately. Goins has already used this strategy for selling his previous book, “The Art of Work,” which he sold 14000 copies in pre-orders.

This time, for “Real Artists Don’t Starve,” Goins is using a dedicated landing page, with clear directions, and a form to capture emails, to send the bonuses. Word repetition, “free” and “bonus,” accompanies coordinating colors between the CTA button, the menu, and book cover.

5. Referral Programs

Referral programs come in many forms, usually offering irresistible compensations in exchange for word-of-mouth marketing. They play with customers’ loss aversion specially when they offer discounts or free benefits.

Dropbox has a successful and famous case of referrals, that helped them go from 100,000 to 4,000,000 users in 15 months.

They framed their referral program as “Get more space:”

Image source: Referral Candy

 

6. Exclusive Launches on VIP E-mail Lists

Exclusive launches on VIP e-mail lists is a great strategy for using loss aversion on your behalf.

VIP email lists bring together people who are already customers, who trust the brand, and are willing to spend money on your products and services. Exclusive launches celebrate this relationship and signal that customers shouldn’t miss the opportunity of acquiring the new goodies.

Emails are, after all, the preferred means for receiving brand promotions:

Image source: Marketing Sherpa

Evy’s tree has a fantastic example of using the VIP list to introduce their new hoodies:

“Here’s the formula and how it works:

A new hoodie inspired by a real woman is named, created, and topped with a story about why that woman is an inspiration

Evy’s Tree doesn’t immediately offer the hoodie for sale. Instead, it launches a sneak peek three days prior to the release. It slowly introduces the hoodie and tells the story behind the hoodie via its Facebook and Instagram channels

On launch day, Evy’s Tree sends out an email to its VIP email list letting everyone know the item is finally for sale and includes a link to a dedicated product landing page

Preorders are taken, with a delivery date somewhere between 2-4 weeks from the preorder date”

You can check the introduction of the “Diana” wrap, the announcement of the email, and the giveaway for the product launch.

7. Urgency

Urgency plays a crucial role in inciting loss aversion, as it sets the time frame for customers’ action.

By the end of the time frame, customers will lose all benefits, as those countdown clocks alarmingly indicate on landing pages.

Amazon, for instance, displays a small countdown clock for deals of the day:

8. Scarcity

Scarcity is also a fundamental feature for framing loss aversion.

The customer needs to act fast to complete the purchase and not miss the opportunity of acquiring a product at a low price.

Discounthockey.com uses scarcity by informing the quantity of items in stock.

9. Rewards Programs

Rewards programs create a new currency.

By collecting points, customers have a new currency to exchange for products and services, so they can save their money.

You can find many formats for rewards programs, but product discounts are customers’ favorite feature. More than half of global loyalty-program participants, 51%, say product discounts are among the three most valued benefits.

100percentpure.com has a rewards program called Purist Perks. The tiers of the program offer benefits that customers would not want to miss, as exclusive deals, sales, and product previews.  You can see they use the repetition for words as “rewards,” “perks,” and “benefits.” They clearly point out that you can “cash points for benefits.”

10. Brand Ambassador Programs

Brand ambassador programs also come in a vast range of formats.

Among the incentives these programs bring to participants, discounts and mutual partnership on marketing efforts are features the ambassadors would want to keep.

100percentpure.com also has an ambassador program. You can see how different this program is from the rewards program we mentioned above. Their Purist Pro Program is for makeup artists and estheticians who work with their products. These pros get discounts, the first benefit mentioned in the list below, but also a lot of marketing joint benefits.

11. Social Proof

Social proof can trigger FOMO (Fear of Missing Out), which, in turn, can play upon loss aversion. When suffering from FOMO, people want to keep up with trends and other people’s activities.

Groupon, for instance, employs many loss aversion strategies. For social proof, which doubles as scarcity in their website, they indicate how many people have bought the item, by also warning “limited quantity available.”

12. Cart Abandonment Notifications and Emails

With notifications for cart abandonment, you can reach out for your customers to recover items they were interested in buying. As they previous selected the items for purchase, they had already considered the items as their own. So, they should not want lose these products.

On pre-orders for the Full Focus Planner, Michael Hyatt chose to send a cart abandonment email, reminding the buyer to complete the purchase. The email mentioned the person could be distracted, and that’s why they left the site without buying the planner. He refers to the product that “you left in your cart,” meaning this belongs to the email recipient, it is just a matter of the person going back and retrieving the product, in order not to lose it.

13. User Interface and Design

At UI-Patterns.com, they compiled a list of four ways you can tingle loss aversion to users. You can:

1. Segregate gains (since gain brings less intense feelings of joy, by segregating them, you make them stronger).
2. Integrate losses (to intensify the strong feeling of sorrow).
3. Integrate smaller losses with larger gains.
4. Segregate small gains from larger losses.

Let’s check how Walmart organizes loss aversion on discounts. Their value proposition and tag line state “We save people money, so they can live better,” and “Save Money. Live Better.” We can expect their site to be structured to convey this message.

In the product page, you can see the “Save $50” in a contrasting color, that matches the CTA button. There is scarcity, “only 7 left,” in black.

They framed “2-day shipping,” and “free 2-day shipping” as gains, in green, with a note on the day of arrival. These gains are announced as nouns, opposed to the stronger command “save.”  In this sense, the 2-day shipping comes as a benefit vs. the action the customer can take that will prevent him from losing money.

 

They keep the interface and layout consistent though the shopping experience.

So, on cart page, when a new discount is introduced, in a banner, for opening up an account, it comes in the same orange color, with the same wording as “save.” The banner also offers a little calculation, so the buyer can see the savings of opening an account.

Free shipping is still in green, and it shows up below the item description, while the discount and scarcity indications show up under the price. So, gains on the left, losses on the right, close to price. Gains are reinforced under the CTA, as “Congratulations – You get free shipping!” again in green.

On another product page, you can check the consistency of the site. The discount appears twice, in colors that match the CTA button, with different wording, “Pickup Discount” and “Save an extra $0.80” Free shipping, as a gain, comes in black.

For retargeting, they keep the consistency, so you can see the CTA color and shape in this ad matches the CTA color and shape of the product page.

Final Thoughts: Optimizing Loss Aversion for Conversions

Do you know any other loss aversion strategy? If you have a suggestion to add, we would be thrilled to hear and add to our list!

After creating and implementing some of these loss aversion strategies to your site (or all of them, if you are extremely bold!), it is time to optimize them.

At a starting point, you should conduct qualitative research and carry out an Analytics investigation. You have to learn if your visitors are aware of all the benefits. Focus on evaluating the location and copy on your website that addresses the loss aversion strategies.

For instance, during research for one of our clients, we found out only 30% of visitors were aware of the incredible loyalty program the brand offered. In this case, we worked on streamlining the wording and adjusting the incentive so it was clearer for visitors the benefits of subscribing to the program.

You can also check our case study on improving copy and location for discount and social proof. With this optimization program, we helped our client reach 13.98% increase in conversion on mobile product pages and 17.75% increase in conversion on mobile cart page.

Remember to always A/B test your findings and hypothesis.

The post What is Loss Aversion and 13 Loss Aversion Marketing Strategies to Increase Conversions appeared first on Invesp.

You can use all the right design elements, the right copy, and the right testing tactics, but unless you truly understand user psychology, you will struggle to persuade users.
User psychology tells you what customers actually care about at a primal level. Master this and you will see happier users and better margins.

In this post, We’ll share 4 proven principles of psychology to help you increase conversion rates.

1. Take advantage of loss aversion theory

Loss aversion theory says that people would rather avoid a loss than reap a reward. When it was first described, it was used as an explanation for the “Endowment effect” – that people ascribe higher value to things they own than things they do not
In simple words, loss aversion means that people will fight harder to prevent a loss than to gain a reward.

Perhaps the most common example of this can be seen in the casinos around the world. People first losing at the games and then trying to make up for the losses.

How to use it

On your website, understand that people will respond better if you tell them what they’re going to miss out on instead of benefits they stand to gain.

A free gift feels more tangible than a discount, making customers feel like they scored a deal with their decision.

For instance, offering free shipping and returns is one of the best ways to put the loss aversion theory into practice. Customers would rather get a “free” gift (in this case, shipping) than spend $5 on shipping.

In fact, a lack of free shipping (and other unexpected charges) is one of the biggest reasons for shopping cart abandonment.

For example, Asos clearly mentions its free shipping policies right at the center of its homepage:

When you click this link, Asos shows you exactly how much you need to shop for to get free shipping:

In psychology speak, this is how Asos triggers loss aversion.

2. Use FoMO (Fear of Missing Out)

When people think they might miss out on something, they immediately act to get it.
Psychologists call this phenomenon Fear of Missing Out aka FoMO.

FoMO is essentially anxiety that an exciting or interesting event may currently be happening elsewhere. It’s closely related to scarcity and social proof – if you are not a part of the exciting event, you don’t have social proof to show that you are knowledgeable or in-tune with current events.

In a study on “scarcity effect” conducted in 1975, researchers put 10 cookies in one jar and 2 of the same cookies into another jar. Participants were then asked to rate the chocolate chip cookies.

Unsurprisingly, participants gave higher ratings to the cookies in two-cookie jar.
This shows people value items that come in limited quantities. “Act now while supplies last” is a great way to persuade customers.

How to use it

On your ecommerce store put a timeline on your products and make it look like customers might lose out if they buy the product right away.

For example, wine.woot.com make user of time limits to encourage purchases. They make one special offer per day. Once the product is timed out, it’s gone forever.

Here’s another example from Hotels.com. Hotels.com uses FoMO by showing the number of rooms left at a particular hotel. Users might think that since there are only limited rooms left, they are missing out on an exciting deal.

3. Give customers instant satisfaction

The brain lights up when people picture instant rewards.

Several Magnetic Resonance Imaging (MRI) studies have shown that our frontal cortex – the part of the brain responsible for reward and attention – is highly active when we think of waiting for something.

You need to remind your customers that your product can solve their problems fast. Focus on quick arrivals, fast shipping and instant gratification to appeal to your customers and give them instant gratification.

How to use it

In your offer copy, use words like “Now”, “Fast”, “Immediate”, “On the spot” etc.
This can apply to page headlines, such as this one from MensFitness.com:

To CTAs:

And even to Twitter customer support queries:

Assure customers that you are there for them and that you will give them what they want as quickly as possible.

4. Use the principle of reciprocity

In 2002, researchers found that waiters could increase their tips with the psychology of reciprocity. Tips increased 3 percent when customers were offered after-dinner mints.

But when the waiters were asked to pause, look at the customers and tell them the mint was specially for them – tips went up by 20 percent!

This is an example of the principle of reciprocity (one of Robert Cialdini’s 6 principles of persuasion) – that we want to give back to people when they do us a favor.

In the above case, the diners tipped extra without being asked by the waiters because they wanted to return the favor.

How to use it

Offer something to your visitors for free so that they feel indebted to you.

One of the best ways to put reciprocity to work is to through content marketing.

By blogging you can give away value for free in the form of blog posts. Your focus should be to genuinely give value to your readers.

The best example of this is MrPorter.com. This site started out as a fashion magazine and has now branched into a full-fledged E-commerce store. It still publishes some of the best men’s lifestyle content online, including in-depth interviews with celebrities, fashion guides, etc.

Another great example is Baxtton magazine. Like MrPorter, this site started out as a platform to share interesting products and gadgets. Instead of directing customers to retailers, Baxtton now offers readers a curated selection of products featured on the blog.

In other words: by giving customers something (in this case, content), Baxtton makes its products more attractive.

Over to You

Understanding user psychology is akin to gaining conversion rate optimization superpowers. Once you know what triggers action and influences human behavior, you can design much better converting experiences.

Use the four tips shown above to start understanding user psychology and implementing it on your site.

The post 4 Time-Tested Principles of Psychology that Will Help You Increase Your Conversion Rates appeared first on Invesp.