Five psychological techniques for online retailers

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By: Wise Marketer Staff |

Posted on April 21, 2014

Five psychological techniques for online retailers

Relatively simple psychology can easily be applied to make small changes to a retail web site, yet have an impressive impact on online sales and conversion rates, according to web psychologist Nathalie Nahai, who here outlines the top five 'web psych' techniques.

Most online sellers, whether large or small, rely on the web to reach out not only to existing customers but also to prospective customers, but the wealth of options available online means there's fierce competition of the consumer's attention.

However, there are several psychological techniques that can help keep an online brand ahead of the competition, including price display options, check-boxes for USPs, and perceived scarcity value, among others. For example:

  1. Make it easy Let's start at the beginning. Have you checked your analytics lately to see which page(s) your customers are landing on the most often when they arrive at your site?

    We tend to assume that the home page is the main point of entry (and therefore the most important), but if you don't actually know where people are entering, it's going to be nigh on impossible to optimise their experience and boost your conversion rate.

    So, first thing's first - check your analytics account to see which are the main points of entry, and then make sure that on each of these pages you make the following three elements really clear: 1. your logo - this should be bold and will usually sit in the top left hand corner; 2. your offer - this should articulate how your service or product benefits your customer, you need to make this concrete; and 3. the call-to-action - make it obvious what you want your customer to do next.

    A great example of a website that does all three of these things really well, is - they've made their homepage easy for you to understand who they are, how they can help you, and what action you should take next.  

  2. Give a choice of three We like to think that if we're given a wide range of choices, we'll make better decisions. However research has found time and again that if we're offered too many choices, what we actually end up with is a state of 'choice paralysis' - an inability to choose. And so it is online.

    Have you ever wondered why so many SaaS websites offer a choice of three price plans, and highlight the one in the middle? LinkedIn and Hootsuite are great examples of this principle in action, and they work because they rely on this heuristic: when faced with several options, you'll tend to go for the one in the middle. Why? Because we seem to be hard-wired to avoid extremes. Research from the field of behavioural economics has found that we dislike losses more than we enjoy similar gains (a principle known as loss aversion), so in order to lower our risk of loss, we hedge our bets and instead opt for the middle ground.

    That's why, if you're selling a range of products or services to your customers, it may serve you best to select your top three items, and place in the middle the one you'd most like to sell.  

  3. Use ticks (check-marks) Now this one is super simple. Some friends of mine over at Online Dialogue in the Netherlands recently conducted an experiment to see if they could increase conversions by changing the way in which they displayed a product's USPs.

    They tried three different conditions: listing the top rated benefits, the lowest rated benefits, and then a mix of both. But contrary to what you might expect, when they only showed users the top rated list, it didn't have much of an impact on conversions - so they decided to change tack.

    Instead of using straightforward, simple bullet points to list their benefits, they decided to try green ticks instead. The results were phenomenal. By changing this one small, seemingly insignificant visual cue, they were able to dramatically increase conversions where they had failed before. These results confirm what we're finding in wider research - that the decisions we make are far from rational, and that by applying and testing these (often subconscious) psychological design elements, we can make a huge impact on our bottom line.  

  4. Leverage scarcity If you've looked into this subject at all, you'll have no doubt heard of the principle of scarcity: that which is rare, is also perceived as valuable. The same applies online. If you want to boost your sales by inducing a sense of urgency in your customers (remember, you should only try this if it fits with the tone of your brand), you can invoke this principle by running limited time sales ("24 hour flash sale!") and highlighting when an item is in low stock ("hurry, only 1 item left!").

    A great example of a website that uses both of these principles beautifully, is - go and have a hunt around their product pages and you'll see just how integrated this technique has become in their user experience.  

  5. The peak end rule Last but not least, there's the peak end rule. Originally coined by Kahneman and his colleagues in an experiment exploring pain, this term describes how we hedonically evaluate our past experiences.

    In a nutshell, we tend to judge an experience by its most intense point and its end, as opposed to the average of the whole experience. Online, this means that if your users are going through your website's sales process and they encounter a moment of intense frustration (which often ironically happens at checkout), you may be losing customers unnecessarily.

    "In my experience, the biggest, most common mistake that businesses make here is to create 'required' or 'mandatory' form fields that are asterisked with aggressive red marks, and that pop up red, unhelpful messages when completed incorrectly," said Nahai. "So instead of punishing your customers for trying to give you their money, try this instead: for every field they complete correctly, give them a green tick. I know it sounds simple, but by offering this culturally relevant, positive mark of affirmation, you're essentially rewarding them for taking the positive action you want them to take."

    Two web sites that do this really well are eLai London, which has retained its red asterisks but also includes ticks, and which highlights each checkout section completed with a green bar and a tick.

So, whether you're an established business or you're just starting out, now that you know these principles, it's up to you to go and apply them. Experiment with them - you may just be surprised at how a few small changes can make a huge impact on your sales.

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