According to a research on conversion rates from Marketing Charts, 60 percent of online marketers plan on doing a customer journey analysis to improve their online conversion rates. Econsultancy reports that only about 22 percent of businesses are satisfied with their conversion rates.
Conversion optimization goes beyond tweaking your call to action, changing fonts and page color. To boost conversion rates, marketers should revisit the beginning of the customer’s journey. That is, the mind of the customer where he or she initially decided to patronize your business.
In this article, I will be discussing four radical psychological experiments, including lessons to boost your conversion rates. One of these experiments was conducted more than 100 years ago.
1. The little Albert experiment – classical conditioning.
The “Little Albert” experiment was conducted by Psychologist John Watson (1913) on a child to observe the process of classical conditioning. The psychologist, picked an 11 month-old infant (Little Albert) to test his reaction to different stimuli and little Albert was indifferent to animals before the experiment but had a liking for a white rat.
During the course of the experiment, Watson paired the presence of the white rat and other animals in Albert’s room with the loud bang of a metal which scared little Albert. As this process was repeated, little Albert associated the loud bang with the animals. Afterward, even without the loud bang, the presence of the animals alone scared little Albert resulting in him moving away and crying.
After some time, little Albert came to fear the white rat (and other animals) he once loved since his brain conditioned the sight of the animals with the loud bang. It was reported that little Albert never recovered from this conditioning.
Key Takeaway: to boost conversion rates for businesses, brands need to be associated with positive emotions. Positive emotions trigger memories and boost perception from customers. In little Albert case, the presence of animals after exposure to the loud bangs caused nervousness and fear.
Brands like Nike and Christian Louboutin have conditioned our minds with psychical fitness and luxury respectively. A perfect example is in Nike ads where you find runners staying healthy wearing Nike kits or sponsoring challenges like Run with Hart.
2. The Amos Tversky and Daniel Kahneman experiment – anchoring
When shopping for household items on e-commerce platforms, we come across prices, which look ridiculous, but a few clicks down the page or on the next listing we find the same items for a cheaper deal making us buy instantly. What prompted you to buy was the “Effect of Anchoring”.
In the experiment conducted by Psychologist Amos Tversky and Daniel Kahneman (1974), a solution was offered to boost conversion rates and combat cart abandonment for cheaper competitors or stores.
The experiment was conducted to observe how initial perception can alter or influence people’s behavior. During the experiment, the Psychologists surveyed and asked people to estimate the percentage of African countries in the United Nations. Participants were asked to spin a wheel with number 0 – 100 before answering the question, unknown to the participants the wheel was rigged to stop at 10 or 65.
The psychologists found that participants who picked 65, choose a higher percentage of African countries than those who picked 10. Participants who picked 10 on the wheel estimated that 25 percent of African countries were part of the UN and participants who picked 65 estimated that 65 percent of African countries were part of the UN.
Key Takeaway: this study proved the effect of anchoring on our shopping habits, and mind – initial exposure to a certain amount of an item will influence our mind when offered the same item for a cheaper amount.
For example, when shopping for a Nespresso that cost $350, you may feel the price is too high, but when you find a similar Nespresso for $250 or $300, you feel you’re getting a bargain and therefore purchase the coffee maker immediately. Amazon and BestBuy do this in their product listings. Anchoring can only be used by e-commerce business and should be applied creatively.
3. The Jam study – more choices aren’t always better.
In the book “The Paradox of Choice” written by psychologist Barry Schwartz, Barry declared that offering too many choices can have unintended effects on people and it is best kept to the barest minimum. The same applies to conversion optimization and the effect was demonstrated in the “jam study”.
The “jam study” was conducted by Psychologist Mark Lepper and Sheena Iyengar in 2000. The study observed the shopping behavior of 754 consumers in a grocery store and their reactions to the choices they were confronted with. On the first day, there was a table with 24 varieties of gourmet jam and on another day, a table was set up with only 6 varieties of gourmet jam.
Results from the remarkable study showed that the table with 24 varieties attracted more interest than the table with 6 varieties but the latter outperformed the former in sales.
This study and others have shown not only that excessive choices can result in choice paralysis (more interest in the table of 24 varieties of jam, but fewer sales) but can also reduce consumer satisfaction even after making the right choice.
Key Takeaway: To increase your conversion rates, instead of offering many choices to customers, cut it down to 2 or 3 options making it easier for customers to make a choice.
This tactic is used by Apple in their product listings: they offer only 3 sizes (16GB, 64GB, and 128GB or more recently 32GB, 128GB, and 256GB) of space on their mobile devices. This allows for controlled variables and more profit when used.
4. The beer on the beach experiment – context boost perceived value.
Have you ever wondered why people pay up to $700 for a Samsung phone, but question the price of another manufacturer offering the same device spec sheet for less? Research has shown that the reason for this is an increase in perceived value. The same applies to why most people ask for bargains when shopping in a street market but never in a shopping mall.
An experiment was conducted by psychologist Richard Thaler to demonstrate how context influences perception. In the experiment, two friends sat on a beach. Friend A offered to buy Friend B his favorite beer and asked him how much he will be willing to pay for the beer. He offered two options; the beer will come from the restaurant of a fancy hotel or a local grocery store.
The experiment showed that people were willing to pay more for the same beer from a fancy hotel than the grocery store. To the participants and the friend B, it was unfair to pay for the same beer from a fancy hotel compared to the local grocery store now this is context boosting perceived value.
Key Takeaway: to boost conversion (close sales/generated leads), your business can’t be perceived as cheap. This makes it hard to convince customers to pay a premium for your products or justify a sudden change in your pricing. But, positioning your business as a premium brand will boost revenue, referrals from customers, and grow the business.
Successful ways of boosting perceived value will be:
- Use social proof – testimonials, video proof
- Increase the price of your products
- Use authority figures in images and campaigns
- Convey scarcity
- Compare your business with expensive alternatives
Over to you
How have you used psychology to boost your conversion rates? Share your experiences in the comments below.