Did you know that playing classical music in wine stores influences customers to buy more expensive bottles? It might sound crazy but customer psychology is a gold mine that offers effortless opportunities like this and many more for businesses.
But why does it work so well? Well, we like to think that we’re in control of our thoughts and we make rational decisions. However, most of the time our behavior is influenced by details we’re not even aware of.
So we might end up buying a product because we love the packaging, subscribe to Audible because everyone else seems to do so, or buy an expensive wine because the background music got us in the mood.
And consumer psychology is even more critical when it comes to ecommerce as business owners have more control over the customer touchpoints. Therefore, in this article, we’ll walk you through the fundamental psychological factors that shape consumers’ behavior throughout their online shopping journey.
By understanding these influences, you can use them to your advantage and see significant results!
1. The reciprocity principle
Imagine this: You go to a store just to take a look around and a salesperson approaches. They start showing you the products and give you information about the brand. You two hit it off and you start to think that you have to spend some money. You end up buying lots of stuff even though you didn’t need to.
This probably happened to everyone at one point in their lives — no wonder we panic when salespeople approach us in stores. This social phenomenon is called the reciprocity principle. The logic is simple; when someone does something nice for us, we feel the need to return the favor.
And businesses have been taking advantage of this for years. Think of all the free cheese you tasted in stores and the shampoo testers that piled up in your drawer. But how does one implement the same logic in the online world?
Actually, we’re doing it right now. With this article, I’m giving you free information that will be beneficial to you and your business. Many other businesses also use this strategy and provide valuable content for free. You might have heard of the concept before: Content marketing.
But there is an important consideration here that many businesses miss. When you give out something for free — it may be an ebook, an online course, or customer support — don’t do it for the mere purpose of getting something back.
Because this intention is usually picked up by customers and it backfires. According to a study by Nielson Norman Group, users frequently enter made-up information when they encounter overly aggressive lead-generation forms before the website has established its credibility.
Another study investigated the same issue and asked a group of users to fill in a form to get access to a set of free guidelines. On the other hand, another group of users were given the guidelines first and then asked to fill out the form. Results revealed that even though the first group was more likely to submit the form, the second group gave out more information.
So what’s important to realize here is that a visitor who gives their contact information willingly is more valuable than a visitor who does it because they have to. When you ask your visitors to do something for you before they even get a chance to interact with your brand, you’re off to a bad start.
The tip here is simple: give before you take. Even if it’s something simple, the customers will appreciate it. Although not everyone will immediately convert because you offered a free benefit, they will definitely have more favorable perceptions towards your brand.
2. The scarcity principle
Only one more left in stock, few seats still available, the last day of the discount! All of a sudden, All of a sudden, it’s not a question of whether you want or actually need the product/service anymore. You just feel an urge to start running and getting whatever you can before it runs out.
This psychological principle of persuasion coined by Dr. Robert Cialdini means the rarer or more difficult it is to obtain a product, offer, or a piece of content, the more valuable it becomes.
An experiment was done to show the effects of this principle. Participants were shown two different product descriptions: “Exclusive limited edition. Hurry, limited stocks” or “New edition. Many items in stock.” Then participants were asked how much they would be willing to pay for the product. The average consumer was willing to pay an additional 50% for the product with the first description!
And another interesting thing about this principle is that although both limited quantity and limited time urge customers to buy, limited quantity is more effective because it creates a sense of competition among consumers.
There are numerous ways online businesses cleverly take advantage of this principle and boost sales. For example, booking.com shows messages like “Booked x times today” or “x others are also looking right now” to create a sense of scarcity.
But once again, if you overdo it or give false information, it’ll not work as it’ll lose its legitimacy. So be strategic and honest about your scarcity messages, instead of throwing them around mindlessly.
3. The center-stage effect
Okay, this one is pretty self-explanatory; when you put a product in the center, people tend to think it must be because of its popularity and superiority. Due to this bias, customers are more likely to prefer products that are placed in the center — may it be a shop window or an ecommerce website.
What’s even more interesting is, research has shown that the center-stage effect is more impactful when people are purchasing products for others. The idea that the product in the center is put there due to its popularity makes it an ideal gift option in consumers’ minds.
However, one thing to be aware of is that the center-stage effect works once all the elements in the “line-up” are of a similar nature. So try to put products from the same category in the same line and then put the one you’d like to highlight the most in the center.
This effect is so influential that online marketplaces such as Amazon and eBay are able to charge more for brands or products that want to be featured in the center of their displays.
So, you too can take advantage of this strategy and promote a new product or a more expensive item by putting it in the center of your product line-ups.
4. Doubt-avoidance tendency
No one likes to make uninformed decisions — so when we’re faced with a doubtful situation, we tend to make a quick decision in order to avoid uncertainty. This is especially true when it comes to online shopping where you don’t have a chance to see or touch the product in real life.
So it’s crucial to remove any type of uncertainties a customer may have when they are visiting your ecommerce website. One very important way of doing this for ecommerce businesses is providing high-quality and detailed product pictures.
According to a Splashlight study, almost half of online consumers in the United States rate high-quality product images as the most influential factor when making their buying decision, and over 50% want to see a minimum of 3-5 product photos — front, back, and side views — before making a purchase. So it’s always a good idea for ecommerce businesses to invest in product photography.
Another effective way of decreasing uncertainty is social proof. Social proof is a demonstration that other people have made a choice or partaken in a product/service — such as reviews, testimonials, or social shares — thereby encouraging others to do so.
This is yet another psychological effect that is based on the principle that people are more likely to do something when presented with evidence that others have done it too. And it’s safe to assume that it’s effective for ecommerce considering 88% of consumers trust user reviews as much as personal recommendations. So make sure to encourage your customers to leave a review about their experience.
Finally, a good idea is to include messages like “Over 98% reliability” or “Customer favorite” next to product displays to promote them more efficiently. You can even come up with strategic title ideas such as “The perfect Valentine’s gift” and give customers more reasons to purchase for certain occasions.
5. The zero price effect
I guess we can all agree that the difference between 2 and 1 is greater than the difference between 1 and 0 — when it comes to pricing of course. There is just something magical about getting free things that can get anyone hooked.
According to the zero price effect, our brains perceive free options more positively than ones that come with a cost. But you don’t have to give out free products to take advantage of this effect. Even when a free benefit is associated with a product, we still perceive it more positively despite its cost.
One popular way of doing this for ecommerce websites is free delivery. According to a recent report from NRF, 75% of consumers surveyed expect delivery to be free even on orders under $50. And this percentage keeps getting higher in the pandemic world that is dominated by ecommerce.
On the other hand, “unexpected costs” is the top reason why people abandon shopping carts because it basically has the opposite impact of zero price effect. It also damages the trust customers have towards your brand and triggers doubt-avoidance. So if you require additional costs, the best way to handle this is to be frank and upfront about it.
Also, don’t be shy about highlighting your free incentives. You can even enhance the zero price effect by showing customers how much they are getting for free by emphasizing the difference between the original price and the new one.
There’s a lot that goes into making an ecommerce business successful — and taking advantage of customer psychology is definitely one important aspect of it. Thanks to the vast opportunities the online world provides, business owners can significantly impact customers’ perception of their brand in many ways.
Now that you know about the 5 important principles of customer psychology, there’s nothing stopping you from implementing them in your business!