The Reason CRO is FLAWed
- Posted in Conversion Rate Optimization
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Image Source: Wikipedia
Humans are flawed creatures. We conform to a number of biases outlined by the world’s greatest psychologist. Wikipedia has listed 180 biases that impact our everyday decisions.
This in turn makes our jobs as marketers and optimizers quite tricky. According to social scientists Amos Tversky and Daniel Kahneman, you can’t quite overcome your biases. You’ll always fall into them. Tversky died in 1996 and Kahneman went on to win the 2002 Nobel Prize in Economics for the work the both of the men did together. His work was summarized in the highly acclaimed and 2011 best seller, Thinking, Fast and Slow.Wait so marketers and conversion rate optimizers– they’re biased creatures too!? Reminder: we are as human as the consumer.
I relay the story of my own bias during a qualitative research session with my team where I was completely convinced that the target customer behaved a certain way.
And that’s just taking into consideration the marketer and optimizer who most likely is somewhat conscious of these biases humans hold (if they know what they’re doing). On the consumer side it’s worse. This concept that we cannot change our predisposed biases, ultimately means, we can’t alter consumer behavior.
The bias that Kahneman and Tversky listed as the most damaging: the confirmation bias. Think about the current political divisiveness in America. The confirmation bias allows for this to fester because it’s the effect that leads us to look for evidence confirming what we already think or suspect. The right believes the left is bonkers and is driving the country to shambles, and the left believes the right is extreme and out to destroy the fabric of America. Neither, even when confronted with opposing data to what they believe, are willing to accept anything but what they believe.
This idea scares me about what many marketers and optimizers may be doing. They may not be conscious of this bias and they simply continue to investigate in within a scope of data that confirms what they believe refusing any alternative evidence.
I read an article a year ago in the New Yorker on how facts simply do not change our mind. This is present in our every day life if we consider the deep partisanship of America as mentioned above. But it’s even present in the racial divide in terms of how races view each other and themselves.
The confirmation bias actually impacts me personally very often. I speak internationally at conferences such as Inbound, SMX series, Business of Software and many more. But as a hijab adorning (the scarf on my head) Muslim woman, I’m wearing a label that many people have a confirmation bias against. Whether I like it or not, as much as I talk and reveal my expertise, there are too many people that cannot “change” their minds about me because of the bias they have against Muslims.
Kahneman himself is pessimistically convinced is it almost impossible change our biases citing the Muller-Lyer Illusion. It is basically two lines, both the same length, but at the end of each line the arrows are pointed in different directions; one inward, and one outward.What Kahneman found was that even when the evidence and fact are present that the lines are the same length, people still perceive one line to be shorter than the other. But we can convince our analytical mind (system 2 according to Kahneman) that our system 1 perception (automatic, unconscious, and fast thinking mind) is wrong. System 1 is efficient but prone to errors and biases, while system 2 is very controlled.
In the real world, it’s not so easy to reach system 2. And when dealing with daily quick decisions by consumers, the challenge is greater. Most of our decisions are made with system 1 (about 90% of them!).
There are many stories and experiments done testing the effect of psychological biases. What we have found conducting CRO for many years that indeed, it’s not easy to change people’s thinking, although not impossible.
This is supported by social psychologist Richard E. Nisbett, a social psychologist at the University of Michigan. He believes, as a result of his research, that there is a great possibility in training people to overcome pitfalls of various biases.
The reality I found while researching this article was that the biases touch each and every part of the sales cycle and consumer journey. And this confirms something I’ve talked about in regards to CRO: it’s not about testing your website. If you have a company that is doing template tweaking for you, it’s not going to give you that huge impact you’re seeking. Ultimately every decision at any point in the sales cycle may already have preconceived biases or builds up biases. If the marketer or optimizer is tackling just one small part of the experience, they are missing the boat.
Let’s peel it a part – understand some of the most prevalent biases that impact the consumer, your customer, and you, and then present different methodologies and approaches to countering the particular bias:
The Confirmation Bias
I’ve talked about this specific bias at length above.
“Confirmation bias, also called confirmatory bias or my side bias,[Note 1] is the tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses. It is a type of cognitive bias and a systematic error of inductive reasoning.” Wikipedia
How does it impact consumers?
According to Jeff Toister, confirmation bias can:
- “A customer’s first impression can anchor how they feel about your business.
- Online reviews can convince customers that you’re awesome (or not).
- How quickly and how well you handle problems can cement a reputation.
- Making personal connections with customers can strengthen their positive bias.
- One prickly employee can convince customers you suck.”
Well, for one, we find this present in consumers when they are exposed to negative reputation or reviews about a company. It’s very difficult to “change” their mind’s to believe that the reputation is sound and the negative comments are isolated incidents.
Think about McDonald’s and their attempt to redeem their reputation by advertising better quality, and fresher food options.
What we’ve found is businesses battling confirmation bias need to be transparent and honest. This is paramount to repair the damage confirmation bias causes. Like the infamous KFC full page advertisement admitting their erroneous error of running out of chicken, they tackled the issue head on.
Social media is also a great tool to connect with customers, hear their voice and address the issues head on.
Another way of countering this bias is by feeding into already held beliefs. So if you’re promoting a product of sorts, try to fit it within preconceptions and expectations that your consumer may already have. For example, a client of ours promoting their book’s compatibility with e-learners or e-books like the kindle, use that convenience element that the kindle’s have to promote their own books.
Of course if someone has a positive confirmation bias of your organization you have it made. For example, this happened to me, when Zappos first became popular with their “free shipping both ways” policy. I was infatuated with the ease and convenience of it, that although I had personally experienced inconvenience with their service and found their prices outrageous, I still shopped there. It happened to me when “Ideeli” was a thing. I loved the concept of getting designer labels for a fraction of the price, and ignored some of the negatives I experienced with the service.
I am your typical consumer. Eventually I recognized what was happening and stopped shopping at these places. But the point is, confirmation bias can actually be positive, and what’s key is to keep those already happy customers happier. That rarely happens.
I always tell my clients, our work does not happen in a vacuum. I’m sorry, if your visitors turned customers have a beautiful, seamless purchase experience, but the end result is negative, they will remember the negative part. And that’s why it’s important to us to be a part of the entire experience, because it all impacts the end result of what we are trying to achieve.
In consulting this is a constant struggle. We have clients that are super happy with our service, and one misstep, wrong email, negative performing test, and it all goes to hell.
While this bias is present, it’s actually not difficult to counter. A friend of mine started an e-commerce operation. In all of the packages she included a special letter and beautifully scented tissue paper. She found eventually that this wasn’t sustainable, and removed it from her process as she grew. What she forgot was how that final unpacking is what clings in people’s minds about the product. And that beautiful scent and experience is what is paramount to leave lingering in people’s minds.
So don’t just care about making the sale. Care about the long-lasting relationship, the repeat customer, because that confirms the type of lingering effect your changes had on the consumer (positive or negative).
Visitor’s always want to feel like they’re winning. If they feel like they’ve lost or were somehow ripped off, this will certainly leave a bad taste in their mouths.
We has a client that built his entire model on hiding fees from customers. He would make money off of the hidden fees. Long term, this plan did not pay off for him. People felt they lost a few more dollars when they thought they were going to be getting a discount, so the psychological effects were great. Ultimately they were unable to maintain long-term, repeat business in a space that easily could have achieved that for them.
I have this when I shop at any of the online flower shop. The deal looks great but then I see the attached fees for shipping and handling and I become supremely discouraged. What starts out as a $50-60 dollar purchase, reaches 100 easily when everything is said and done. Every single time.
Other Biases that work to our advantage
There are a number of other biases that we need to be aware of. I’m sure we will have webinars and posts that delve deeper on this topic (shedding to light other very important biases).
But the interesting thing is there are a number of biases that actually help marketers and optimizers as well. If we are able to anticipate the negative biases, and tap into the ones that work in our favor, we can really understand what our customers want at a deeper level.
Let’s see what some of the biases are and how to tap into them:
Anchoring – with anchoring this is prevalent in SaaS when listing the different packages – marketers tend to list 3 or 4 with varying benefits, and they anchor the packages with the most expensive package, but offer a “best value” at the most desirable package at the price point that makes the most sense to the company.
Image Source: findingbeyond
Bandwagon Effect – the tendency of people following the group. This is helpful if celebrity or influencers use a product or service, many will “jump on the bandwagon” and get the same product or service.
Framing and Priming – priming specific desirable packages with better value by using terms that help visitors see it. We conducted a test with a gift basket retailer by placing badges on the category page to draw attention and distinguish some baskets over others.
In-group favoritism – Apple does this wonderfully. This is the idea of creating a tribe around the product, and once you’ve committed to the tribe, you likely have the business forever. In Apple, Samsung, and other competitors, they continuously have more products to up-sell their customers. That becomes challenging for retailers that don’t have the same type of product that constantly needs uploading .
Salience – if your product or service has a compelling characteristic, consumers tend to focus on that one thing over others. This makes the job of marketers a bit tricky to ensure that certain characteristics become more memorable for the visitor.
Zero-Risk Bias – no surprise, humans hate risk. That’s why when you offer 100% satisfaction guarantees and free trials, people jump on the chance. If there’s 0 risk, they are more likely to try it.
The Decoy Effect – By presenting visitors with options that offer more value as compared to a more expensive or less expensive option, it taps into the decoy effect bias. Visitors will see it as getting a great deal and go with the medium option.
The Humor Effect – People remember humor, so by offering something funny or running a humorous campaign, you can stick better in people’s minds.
Mere Exposure Effect – Retargeting campaigns work for a reason. By getting your product in a potential customer’s face repeatedly, on many different platforms you’ll be in mind, especially when they need your product or service.
Sunk-cost fallacy – I’ve already invested in it, I may as well see it through. When President Donald Trump decided to send more troops to Afghanistan because: “Our nation must seek an honorable and enduring outcome worthy of the tremendous sacrifices that have been made, especially the sacrifices of lives.” More lives and more investment in a lost war because we’ve already started is a clear case of sunk-cost thinking.
Ultimately it tells us to stick with a bad investment, a product, a service: because of the money we have already lost on it. This happened recently when I decided to watch the movie Crazy Rich Asians. I know I’m one of the few people out there that didn’t enjoy it, but I really disliked it and just went because of the bandwagon effect on me (everyone was buzzing about it). From the onset I didn’t like it but I gave it a chance. 40 minutes in I knew I hated, but thought, I already sat through half of it, I really don’t want to walk out now, maybe it’ll get better. It didn’t. And I was so angry I lost all that time watching a movie I really hated. But I fell into the sunk cost fallacy.
Ok how can this help marketers? Actually, stay away from this if possible. Don’t make people start with your product and service and just stick with it because they already started.
But remember, tricks and simple nudges are no longer enough. Marketing campaigns need to be studied, tested and really push the limits to give visitor’s an experience they won’t forget.
My name is Ayat Shukairy, and I’m a co-founder and CCO at Invesp. Here’s a little more about me: At the very beginning of my career, I worked on countless high-profile e-commerce projects, helping diverse organizations optimize website copy. I realized, that although the copy was great and was generating more foot traffic, many of the sites performed poorly because of usability and design issues.View All Posts By Ayat Shukairy
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