How Consumer Psychology Affects Your Ecommerce Business

Would you believe that a coupon code box can drive online consumers away from your website or that a bigger “Buy” button can result in more online sales? These phenomena occur because consumer psychology plays a critical role in ecommerce. Consumer psychology can also be capitalized on through savvy A/B tests and the application of their data on your website. Here are 10 intriguing consumer psychology findings that retailers and psychological studies have noted:

1. Promo code boxes drive customers away

When presented with a promo code box towards the end of their purchase, many consumers “in the know” will leave your website to locate affiliates that advertise merchant promo codes. These affiliate sites often redirect the customer to a link that then steals your online sale. Remedy this issue by including your promo code within your affiliate link or promotion email, allowing it to be “carried” into the URL parameter of the customer’s session on your site. At checkout, only the customers who were provided with a promo code will see the promo code box. Alternately, you can even simplify this process by having the promo code automatically applied during checkout.

2. Free online shipping trumps a big discount

Even if free shipping saves the consumer a mere $6.99 and the product discount is $10, that consumer will invariably choose free shipping. In fact, in 2004, it is estimated that 52% of online shopping cart abandonment was triggered by shipping and handling fees. To entice your customers to buy now, consider offering free shipping after an order threshold is reached. Deciding what that threshold should be is tricky; a very low threshold may cut into your profits, while a threshold that’s too high often leads to large orders and consequently few repeat customers.

3. Slow downloads reduce online sales

Almost half of the online consumers surveyed by Forrester Research claimed that they would abandon a website if it did not load in fewer than two seconds. Also, customers who spend over $1,500 per year online are even less patient than those customers that spend under $1,500. As an online retailer, you can avoid losing potential customers to long download times by optimizing your website and being cautious when adding video and/or animation. Also, be sure to test your website across different operating systems, browsers, screen resolutions and mobile applications.

4. Emails are marked as spam

Customers as well as their email servers can mistakenly mark your email as spam, resulting in your email or IP address being blacklisted by servers. The main reasons for a retailer’s email being marked as spam include the use of images or text instead of images and text, a header that is over 100 pixels, a suspicious landing page URL and overuse of “spammy” words like “free” and “prize”. Email recipients who are not interested in your offer may also mark your email as spam without being aware of this action’s negative consequences. To avoid this issue, keep your emails simple, dated, and without too many animations, images or videos. Also, avoid sending emails too often or without the recipient’s initial permission.

5. “Will” is overrated

Online consumers are more likely to purchase a product if exposed to it in the present moment. It is for this reason that retailers display cookware or cosmetics by giving free cooking demonstrations or makeovers, respectively. The more customers can connect with the product now, the more likely they are to buy it. Therefore, kill the word “will” in your brand descriptions. Instead of stating “This furnace will save money on your energy bills”, thus making a vague promise of what might happen in the future, say “This furnace saves money on your energy bills”.

6. Call-to-action buttons go unnoticed or are ignored

Online consumers are so inundated with online ads, images and videos that they often miss the end point of advertising: the call to action (CTA). A small CTA button may not be noticed; conversely, a large button may be ignored because it looks too much like a banner ad. To draw attention to the CTA, create a large button that has an irregular shape or unusual color/text. Testing several different iterations of “Buy” or “Add to Cart” CTA buttons best determines which of these are noticed by your customers.

7. Consumer eyes need direction

Eye-tracking studies have shown that consumers follow a model’s eyes when viewing an online ad. This can affect how long consumers look at the ad and its CTA, if at all. To determine if your website conversion rates and/or order revenue can be improved by eye placement, try testing ads that have a model looking directly at the consumer versus the product versus the CTA.

8. Discounts are discounted

Online consumers are less likely to believe an advertised discount of “20-70% off” than “Up to 50% off”. Why? In a lottery where the range in prize money is $1 to $1 million, consumers know that they are more likely to win $1 than the $1 million. The same rationale holds true for product discounts, with consumer pessimism focused more on the smaller number than the larger one. By providing only one discount value as the focus, you ensure a more optimistic outlook from your customers.

9. Less is more

In some cases, slogans about saving money actually encourage consumers to spend more, while slogans about luxury spending result in a more frugal transaction. This reverse psychology of consumer spending was noted in a study published in the Journal of Consumer Research. When study participants were exposed to brands associated with saving money, they spent less; however, when exposed only to the brand slogans, which also made statements about saving money, they spent almost 100% more. Indeed, the spendthrift mindset of the online consumer may be one of the underlying motives for Patagonia’s counterintuitive “Buy Less” campaign.

10. Seeing an ad multiple times increases sales

Indochino, a purveyor of men’s suits, continually increased its ad impression frequency per unique visitor until it reached 20+ impressions per day (13). Indochino’s ad revenue and ROI also increased after every ad impression increase, with no complaints noted. While targeting and retargeting the same customer with the online ads may seem excessive, it does help “cement” the product/brand in the customer’s mind, thus driving sales.

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