6 tips on Behavioral economics for your E-commerce store

 

–by Shavin Pieris

Our emotions guide our actions. In essence, this is the founding concept of a rapidly developing discipline that is shaking up marketing and is already changing the thinking and future of the world of studies. This discipline is called behavioural economics. It was founded by Daniel Kahneman and his colleague Amos Tversky who began their work at Stanford in the late 1970s. Since then their work has been awarded a Nobel Peace Prize.

 

Recently, a lot of “scary” words have appeared in marketing: neural networks, quantum neurobiology, behavioural economics, robotization, information wars in social networks, guerilla marketing. But do not rush to complicate your life with their study – there is a more versatile and extremely cheap tool for managing the target audience: human emotions.

 

People share the same psychological patterns of behaviour, using which you can increase the CTR into action without investing much from your budget. Moreover, startups and small businesses make it much easier due to the lack of strict procedures in the company. We want to share with you the most interesting and effective ways to control the behaviour of your target audience.

 

 

 

1. A well-known rule in marketing: the fewer actions, the better. This is no longer enough!

 

For example, some sites use this technique: you choose a ticket, you are advised to hurry and pay with a card. Why does the company advise you to pay with a card? Modern man has to make a huge number of small decisions, and each subsequent one becomes harder and harder. Give your customers clear instructions on what they need to do!

 

While they choose a payment method, something could distract them, they could change their mind, fall asleep, their computer could break down, the Internet could suddenly disappear and so on. Therefore, it is extremely important to not let these factors prevent them from making their final decision! Choose for the target audience and select what action is best for them.

 

Thus, the rule “the fewer actions, the better” has nuances: between the primary decision and the subsequent one, not only should a minimum amount of time pass in between actions, but also the target audience should clearly see the specific action that they need to take.

 

Compare 2 options:

– Option 1. Pay for your order.

– Option 2. Pay for your order by card now!

 

Which one is more emotional? Which option provokes more action? In which variant is there an element of urgency?

 

2. Be careful with discounts: any discount means the depreciation of the product/service.

 

Recently, there has been a huge amount of price offers already with discounts. On the one hand, any discount causes a feeling of “freebies” and increases the likelihood of buying at a discount. If you sell a wallet for 2000 dollars and write “2000 dollars already at a discount” or “-50%, for only 2000 dollars”, then the second slogan will have a higher CTR, although the price is the same. At the same time, in fact, the price can be without any discount at all: some companies actively use this approach, or they specifically increase the initial prices during sales, leaving the same high percentage discounts.

 

On the other hand, any discount devalues your offer. Therefore, always remember to post a true value proposition, not just discounts.

 

 

 

 

3. Basic emotions always work i.e. fear, desire, guilt. Especially fault and fear.

 

You may notice on your own that we are ready to almost instantly write a negative review about a company if we didn’t like the service or product, but we can’t write a positive review at all. The human brain is set to a negative outcome of events more than a positive one. That is why the fear of loss works often better than the satisfaction of the acquisition.

 

 

 

 

 

What can you lose? Booking.com makes excellent use of this principle, showing almost to each offers a message “we have 1 number left”, or “10 people are now browsing this offer”, or “80% of rooms are already occupied”, etc. Doesn’t that sound emotional? Suddenly you do not have time and lose 20 000 dollars?

 

Another example from the list of Fotoshkola.net, in which the effect of loss is reinforced even more by the arguments “once and for all” and “I have time.”

 

4. Observe the stereotypes of your audience

We have been programmed with many stereotypes that we take for granted, that is, we never pay attention to their presence in our lives. Some of them include:

 

  • You cannot look ugly in a selfie
  • Heels always make a woman more attractive
  • Sport is good for health
  • In the morning before work, many drink coffee or order it on the way to Starbucks
  • In the summer it is customary to go on vacation at sea
  • You get the idea

 

The advice is simple: arrange a brainstorming session and make a list of 15-20 stereotypes, choose the most relevant for your product/service/stock from the list, for each come up with options for slogans (2-3), select the top 3/5 slogans and test them on conversion, run an ad campaign.

 

 

 

5. Effect of waiting: the stronger we want something, the more we expect it.

 

Every adult is a child in the shower. Only we have other toys in mind: waiting for vacation, waiting to by our dream car, waiting for the next iPhone to enter the market, etc. The fact is that the longer we wait, the more we want it and the stronger we ourselves (not the company) attach more value of the product.

 

However, this effect cannot last forever, because the audience simply gets tired of waiting, which is what happened with the newer iPhone models – the degree of each subsequent waiting for the new model weakens, despite a large number of product fans. In general, the effect of waiting rarely works more than 3 times: at 3-4 times the expectations will begin to weaken, and therefore the value attached to the product/service, too.

 

6. The community and social affirmation element in products with a mass audience reinforce value in the product

 

In this case, the reflex inherent in evolution works in the human brain: if the members of the group (“herds”) have not yet died from using/eating something, then this is either safe or necessary or both. Absolutely illogical, but it works very often.

 

For example, coupon services, applications and products with chat elements inside, info products, ticket purchase sites often publish the number of people who purchased their product/service.

 

As you understand, any approach has not only advantages but also disadvantages. In behavioural economics, it is extremely critical not to play with manipulations, because once after finding an obvious manipulation, a customer may have a stable negative association with a service or service. How do you go about this properly?

 

  1. Make it so that a person shares his positive experience in acquiring/using your services or products. This invisible anchor effect is the formation of a steady positive perception. It is better to give bonuses for such actions, rather than discounts since discounts devalue the product, and if it is so beautiful, then why devalue it?
  2. Do not bend the stick with the number of letters and their frequency in mailings. Understanding when you start to bend is simple enough: The click-through rate in discovery and transitions will begin to suffer, regardless of the content published.
  3. Plan your loyalty system in advance. It is desirable to make it so that it is not universal for everyone, but emphasizes an individual approach to the customer. The customer should be comfortable! Neither more nor less. About as comfortable as you are in your warm bed early in the morning. One of the most important tasks of any approach is to make your customer loyal to your brand.

 

And finally, always remember that a quality product will not replace any marketing device.

 

 



CLIENT TESTIMONY
READY TO GROW YOUR BUSINESS?

Don’t hesitate to get in contact with us and make your digital aspirations a reality. Book a consultation with one of our digital experts and start down the road to growing your business now.

Please Enter your details