Case Study On Brand Switching Analysis Paralysis
“We’ve just released a free psychological triggers and cognitive biases cheat sheet you can use for every landing page, sales page and any marketing campaign. Use this cheat sheet to get tips, case studies and examples of how to apply cognitive biases to marketing.
About psychological triggers and cognitive biases
Cognitive biases, or psychological triggers are our brain’s tendency to be persuaded by unconscious triggers that affect our decision making process.
“A cognitive bias refers to a systematic pattern of deviation from norm or rationality in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.”
Essentially there are many triggers and unconscious psychological triggers that affect our decision making process. Though we love to think of ourselves as rational people who make rational decisions, most of the time, our brain is affected by how things are presented to it and we later use logical explanations to rationalize our decisions.
How the Psychological Triggers and Cognitive Bias Cheat Sheet Works
The following cheat sheet will help you quickly identify various psychological triggers you can use (or must avoid) in your design to improve conversion rates and increase campaign ROI.
The psychological triggers cheat sheet is divided into:
- Name of psychological trigger or cognitive bias
- Ideas on what pages and sections you can use it
- Examples of how to use and links to relevant case studies
- Checklist – use this to ensure you’ve either avoided or used the biases at the right time
Click Here to Download the Complete List of Psychological Triggers
The following list gets updated regularly, check back for additional cognitive bases and psychological triggers you can apply to marketing.
Skip to a specific cognitive bias
The Complete List of How to Apply Cognitive Biases to Marketing
- Definition: Our brain’s default is to shut down when presented with too many options. Due to a lot of noise, ads, calls to action and just plain ol’ life happenings, our brains over think and have a hard time choosing. As a result, the action (in our case the conversion) is either postponed or never happens.
- Where to avoid it: Mainly landing pages, pricing pages and checkout flows
- How to avoid it: Help your customers, reduce the amount of choices they have to make and keep your design simple, clutter free and clean.
- On landing pages – Have one clear, actionable call to action, avoid too many offers and confusing messages.
- On pricing plans – Your customers get dozens of offers a day and have many choices to make. Avoid having too many options and ensure those you have are easy to compare and direct customers towards a single option.
- In promotional materials such as ads and email marketing campaigns avoid asking for more than one action – have one clear CTA that tells a visitor exactly what to do.
- Definition: Anchoring is our tendency to rely on the first piece of information presented to us to make a decision. Essentially, when a higher price is presented first, it becomes the benchmark against a price is evaluated. For example, if you go to a store and are asked to pay $700 for a shirt you may gasp in horror, however if you’re then presented with a shirt for “only” $400 it may seem cheap as now you’re comparing all prices to that initial $700.
- Where to use it: Most common places include pricing pages and thank you pages.
- How to use it: On pricing pages, consider placing the higher price on the left hand side (as people read in English from left to right) to ensure they see the higher price first, and the bargain right after. This helps people easily compare prices and helps you direct user attention towards a certain plan.
- Example: This cognitive bias will help you create more persuasive landing pages
- Definition: An availability heuristic is when someone relies on information that is immediately available and/or information that immediately comes to mind during a certain event. As a result we might judge these events as more frequent and possible than other events. For example, after watching a news piece about lottery winners, you may start to overestimate your own likelihood of winning the lottery.
- Where to use it: Landing Pages, Pricing pages
- How to use it: According to the ‘Availability Bias’ our potential visitor’s decisions are influenced by the most recent information available to them. For example, if you would like to create a sense of trust, stability and success, test placing your social proof before your call to action. Use testimonials that highlight those specific values and/or use well known and trustworthy logos to emphasize them. Another way would be to use images highlighting the outcome of your service, this will set expectations for future customers.
- Example: 10 Advanced ways I use social proof to increase conversions
- Definition: Anticipation, is a key stage in human happiness. Keeping our customer’s anticipation high, increases retention and brand engagement by ensuring people are constantly waiting to hear from you. We’re wired to anticipate and look forward to positive events and outcomes, the more we strenghthen this tendency with our copy and content strategy the more agreeing our customer may be.
- Where to use it: Most commonly used on landing pages, email marketing campaigns, drip sequences and thank you pages
- How to use it: A known tactic that many retailers use on their sites is creating anticipation towards the “end of the month sales” campaign. Throughout the month, send subscribers emails reminding them that the big sale is coming soon to increase customer anticipation. Using this bias, you not only ensure people are excited about the sale and waiting for it, you may also grow your subscribers list, increase engagement and conversions during sale time.
- Definition: Our tendency as humans to inherently trust figures of authority.
- Where to use it: To be used with hero images, social proof and reviews on landing pages, pricing pages and sale emails.
- How to use it: Common examples on landing pages and pricing pages include:
- Highlighting the amount of they customers/users you have
- Highlighting well known clients or partners’ logos and mentions in well-known magazines and newspapers.
- As social proof, having authority figures write a testimonial for you or using their image to establish authority, for example images of doctors, professors and other authority figures that project trust.
- Definition: This bias represents our tendency to change our opinions, decisions, beliefs and ideas according to the amount of people who think the same way. This happens because most people prefer to conform and be just like everybody else. The more people think in a certain way, the more likely is it to grow in popularity and be trusted by newcomers. For example, when comparing between items/products/options we tend to choose the more popular one.
- Where to use it: Pricing pages, landing pages, up sell emails and more.
- How to use it:
- Statements such as “Join millions of happy customers” are a great way to emphasis your popularity and show potential customers you are the safe and popular choice – the one everyone chooses.
- Reviews are another great way to highlight the amount of people using your service or purchasing your products.
- On pricing pages, a common practice is highlighting a certain package with a banner saying “most popular” / “most trusted”.
- Examples: How I use the bandwagon effect (and other cognitive biases) in social proof to increase conversions
- Definition: Humans are social creatures who love to feel part of a group or a community. As a result of this bias, customers often purchase products in an attempt to feel part of a specific group. Being around people who share our goals or care about the same stuff as we do makes us feel more secure and happy about our decisions.
- Where to use it: Commonly used in opt-ins, sign-up pages, pricing pages
- How to use it: One of the most common and well-known strategies for signing people up to a service or a mailing list, is enhancing that sense of community and exclusive clubs or groups – showing the amount of people in the group and highlighting the unique content only subscribers get:
- Invite visitors to join your family/exclusive club and receive exclusive personalized offers.
- Other variations include: “Join X amount of people”, “Join our exclusive mailing list to gain…”, etc.
- Name your pricing plans in ways that categorize people in groups such as the “gold members” vs. the “platinum” – it gives people a sense of prestige and belonging.
- Examples: Emotional Targeting Guide
- Definition: This bias (stemmed from Cognitive Dissonance) is responsible for us second-guessing a buying decision.
- Where to use it: Ecommerce emails, progress emails, gamification
- How to use it: Our goal is to help people feel good about their purchase, keep our customers happy and returning. To do that on eCommerce sites:
- Keep your customer’s updated with the current location and estimated time of arrival of their package. This will help increase anticipation and excitement towards delivery.
- On SAAS platforms and tools show customers how far they’ve come and their achievements using your service.
- Use gamification: Allow customers to set goals for themselves and achieve points for taking certain steps (e.g. filling in their profile, reviewing items, writing recommendations and sharing items). Once they get to a certain amount of points, offer a discount on their next purchase or a free gift.
- Use your email marketing campaigns to constantly keep customers intrigued and excited about their decisions.
- Use thank you pages to keep customers engaged.
- Examples: 7 Ways I increase conversions and retention rates using thank you pages
Choice Supportive Bias
- Definition: The act of remembering one’s own choices as better decisions than they actually were. This is one of our most basic psychological triggers, in charge of our tendency to think more highly of the decisions we make, even downplaying negative attributes of said choice. Due to this bias we tend to ascribe negative attributes to the option we did not select as a means to justify our choice to ourselves. This is the bias that’s in charge of making us feel better if we suddenly see the same shirt we just bought this morning, for half the price in another store.
- Where to use it: Thank you pages, landing pages, pricing pages, email marketing, retargeting campaigns
- How to use it: Similar to the”buyer’s remorse” bias, our goal is to make people feel good about their decision making process and past decisions. To do so:
- Update your customers on their recent purchase or their progress within a platform by using positive attributes to it and congratulating them on their wise choice.
- Displaying testimonials and reviews makes customers feel good about their decision, helps them feel part of a larger community and increases self confidence in their choices.
- Examples: How to build habit forming experiences
- Definition: Similar to the belonging bias, we have an inherit need to be a part of a social community. Being part of a community makes us feel more comfortable and inspires us to take action to achieve our desired results. Being around people who share our goals and care about similar aspects of our life makes us feel more secure, builds our self esteem and enhances our self confidence.
- Where to use it: Landing pages, ad campaigns, pricing pages and checkout flows – also great for retention and engagement process.
- How to use it: Enhance your brand’s sense of community using:
- Testimonials that also mention the community or family feeling your service provides
- Send out regular emails to existing customers updating them about your team and business so they feel connected
- Highlight the amount of customers or users you have on your homepage or landing page
- Create an online community or forum for people to ask questions
- Use images showing genuine happy customers gathering together
- Definition: The tendency to favor information that confirms one’s existing beliefs or attitudes. This psychological trigger is so strong that if we discover a better deal / platform or service after our purchase, we will still convince ourselves we made the right decision.
- Where to use it: Email marketing, retargeting
- How to use it: To capitalize on this bias, you need to optimize your retention flows.
- Make sure to continuously engage with your customers, remind them why they chose you.
- Update them regularly about their progress or package
- Make sure you build a strong relationship with them that makes them feel comfortable and interested in learning more.
- Use positive affirmations congratulating customers on their great choice.
- Definition: According to the ‘Context effect’ bias, the way we experience events isn’t just affected by the event itself but by the context it’s set in and the event’s surroundings. Essentially, an event is more favorably remembered when the surrounding environment is comfortable and appealing.
- Where to use it: Landing pages, thank you pages, ecommerce experiences
- How to use it: To leverage this bias you must think about the strategy of your entire design. Your landing page (for example) needs to be easy to read, easy to navigate and more importantly, create a delightful experience that resonates with customers and makes them feel comfortable. While you may be selling the best product on the market, if your landing page doesn’t appeal to your customers, confuses them or doesn’t address their specific needs, visitors will remember this experience as a negative one.
- Example: How to address the emotional needs of your customers
- Definition: When presented with two options, people have a hard time making up their mind. People have a noticeable change in preference according to the way choices are presented and we tend to prefer the first option because it looks better, even though both options could be exactly the same. Many time, using a third option (a decoy) helps guide our customers towards a specific choice.
- Where to use it: Pricing pages
- How to use it:
- Add a third “no-brainer” pricing plan option: The idea? Use a third pricing plan option to increase the perceived value of another plan. It’s a way of helping customers immediately see that by choosing X plan they get almost the same value as on the third plan but for much less money.
- Add a third pricing plan option which is far more expensive that the one you want them to choose. Our goal: The higher priced plan makes the middle tier plan seem more attractive and economical.
- Definition- Disposition effect is based on the theory that people consequently base their finance decisions on perceived gains. For example, millions of people invest in mutual funds and shares, despite knowing the risks associated with it. However the perceived gains associated with these financial investments keeps them going.
- Where to use it: pricing pages
- How to use it: Displaying multiple pricing plans containing more features for higher priced plans. Offer a few pricing plans to visitors (magic number being 3). While the first plan will probably be free or at a very low cost, convince potential customers to invest in the more expensive plan by highlighting its many benefits and features. In this case, the disposition effect can take place as prospects will tend to focus on gaining all of those features and benefits.
- Definition: Once we own something, we get used to owning it and we’ve adjusted to that ownership. We won’t be quick to let go of it. In fact, once we own something, even for a little while we tend to credit much higher value to it than it may actually have.
- Where to use it: SAAS products – landing pages, email marketing, upgrade plans
- How to use it: This bias can be very irrational and is similar to the IKEA effect, the more we put into a product the higher value it gets in our eyes:
- Free trials are the most common use of the endowment effect. Once our customers commit to a certain product, invest time in it, building their profile and adding information the harder it is for them to let go and not upgrade their plan.
- Apply urgency to your landing pages, pop ups and pricing plans. Highlight the outcome of leaving, for example “All your information will be lost”.
Forer effect / Barnum effect
- Definition: The tendency of individuals to attribute broad general statements to themselves as if they are tailored to them specifically. For example, the way we tend to believe that horoscope predictions are tailormade for us.
- Where to use it: Landing pages, Offer Pages, email marketing
- How to use it:
- Write your content for one single visitor. Address the visitor directly by using words like ‘you’ ‘yours’ or ‘your’ in your copy. Use words like “I” or “Us” to give a sense of personalization and a direct conversation.
- Address a common pain point and feeling your prospects feel. For example, identify one main pain prospects experience before finding your solution and write about it in your content. Though it’s written to many people who feel the same way, each visitor feels they are being addressed personally and that their concerns are met.
- Example: Attention Grabbing Optimization – Get Personal
Foot in the Door Technique
- Definition: Once we’ve performed a small action (like submitting our email address in exchange for a free guide) , we’re more likely to continue performing additional actions (like filling in more details about ourselves). This bias is used a lot as a marketing tactic that involves getting a visitor to agree to a larger commitment or request by first getting them to agree to a smaller, more trivial request.
- Where to use it: Thank you pages, registration flows, opt-ins, free trials
- How to use it: There are many ways to use this technique:
- On your thank you page, learn more about your customer by asking them to take a survey
- More on thank you pages: Ask your customer to take another action such as write a review, invite friends or join your social media assets.
- Test breaking registration forms into multiple steps (especially on mobile). Once a visitor has entered their name for example, they’d be more prone to enter their email address and other details.
- Examples: 7 Ways I increase conversions and retention rates using thank you pages
- Definition: This bias dictates that people react to choices in different ways depending on the manner it is presented to them. A choice can be framed in a positive or negative way to influence a particular reaction. For example, most cigarette ads showcase the male lead as a charismatic figure, and subtly try to tell the user that cigarette smoking is an activity enjoyed by a powerful person (positive framing effect). On the other hand an anti-smoking campaign magnifies the ill effects of cigarette smoking by showing cancer patients (negative framing effect).
- Where to use it: Landing pages, Offer Pages
- How to use it: Modify your copy and value proposition depending to the impact you want to create. For example, on a signup form you can either convince people to sign up by saying: “Join 1 million happy customers” (the positive impact), other Effective examples include offering a coupon, or offering exclusive information for subscribers only.To utilize the negative impact you could say: Don’t lose out on this last minute sale”, “Just 5 items left in stock!” or “For 24 hours only”.
- Definition: The frequency Illusion is the tendency of people who learn or notice something new, to start seeing it everywhere due to selective attention. A common example is when people get prescription glasses and start noticing all the other people wearing them. Or you get braces and suddenly notice all the people who have them too.
- Where to use it: Landing page, emails, long sales pages
- How to use it: Expose visitors to the same content in different ways, through different channels. Creating multiple variations of the same content leads to repeated product exposure, which in turn increases the chances of a purchase. For example, If you’ve written a blog post about the benefits of your product, you can turn it into a video, a podcast, a series of tweets and expose it on multiple channels to advantage of the frequency illusion bias. Though the content is the same, repurposing it, impacts the visitor’s perception of it.
- Example: After our Google Analytics Webinar with Annie Cushing, we posted the recording of the webinar on our site, added a transcription of it and repurposed the content once again by offering it as a downloadable guide.
- Definition: The tendency of people to prefer instant over delayed gratification. The farther the reward, the more likely we are to dismiss it. We prefer instant gratification.
- Where to use it: Most commonly on Ecommerce sites and pricing pages.
- How to use it: One way this bias is works is by offering an immediate small discount for a current purchase on your site rather than offering a larger discount for future purchases.
Identifiable Victim Effect
- Definition: The tendency of people to empathize more with a specific individual as opposed to a large anonymous group. Great examples can be found with charities, where, instead of saying “save millions of people”, they tell a story of one single person in need of help. The story of one helps us connect with them on a personal level and want to save them.
- Where to use it: About us page, CTAs, landing pages, sales pages
- How to use it:
- Incorporate a personal story on your “about us” page – As opposed to a general story about your brand or business, incorporate a personal story about the people in your company, about yourself or the one true problem you seek to solve for your customers. This type of strategy will help people connect with you on a more personal level and identify with your mission.
- Instead of talking about huge successes or multiple customers who’ve succeeded after purchasing your product, tell the story of just one happy customer by placing a photo of one your customers along with a testimonial that is relatable to the majority of your audience (this also plays on the frequency illusion bias).
- Definition: While the Endowment effect suggests that simply owning an object increases its value to us, the Ikea effect goes one step further and suggests that people tend to place significantly higher value on items they personally helped create, or engaged with despite any flaws they may have. Essentially, the more we put into a product, the more we like it and deem it special.
- Where to use it: Onboarding processes
- How to use it:
- Provide pre-filled templates, samples pages and other ready made materials, enabling visitors to start using products faster and keep them engaged.
- Engage customers via email: Ask people to reply to your message, engage with them by creating a conversation or asking them to fill in certain tasks that will give them a sense of ownership and get them engaged with your product.
- Get people to immediately interact with your product – Once they’ve signed up, ask customers to fill in their profile, start using the product (for example: create a slideshow), get them to personalize a product or invite their teammates to use the platform – this places higher value on your product in the eyes of your customers as they’ve already invested time in it.
- Example: How to activate new customers with the Ikea effect.
Illusory truth effect
- Definition: Also known as the truth effect, this bias refers to the tendency to believe information to be correct after repeated exposure to it. The more something is repeated to us, the more we believe it.
- Where to use it: Marketing messages -Brand messaging, social media bio and descriptions, trial pages, pricing pages
- How to use it: Repeat your value proposition across various marketing channels. If you want to highlight the fact your solution is made for a certain audience, feature images of that audience, use testimonials by those people, highlight it in your headline and CTA, address it in many ways via your content. Essentially, say it again and again in different ways.
- Example: Tone of Voice 101: How to Write Copy That People Can Connect With
- Definition: Impact bias is our tendency to overestimate the intensity and the way we will feel about future events. For example the fear that it would be too painful to breakup with a significant other and impossible to find someone new can keep people in a negative relationship.
- Where to use it: Landing pages, Offer Pages
- How to use it: To use this bias, paint a story for the visitor showing them the outcome of not solving the problem they have by using certain images, colors and social proof. Later, introduce how your service can solve this negative outcome and change everything for the better.
- Example: Negative ads might be positive for your brand.
- Definition: Irrational escalation is our tendency to continue rationalizing a previous decision we’ve made and continue making it. Essentially, we keep doing the same thing based on a decision we made in the past, to justify that decision. For example, you buy a certain brand of coffee against your significant other’s will, and though you later discover you don’t like it either, you keep buying it to justify the initial decision.
- Where to use it: Email marketing, calls to action
- How to use it: With retention optimization, our goal is to help people feel good about choosing our business. This mean continuously reminding customers why they bought our product, or signed up with us by engaging with them, adding value and supplying them with all the information they need in order to succeed.
- Example: 7 ways I’ve increased conversion rates (and even retention) with thank you pages
- Definition: This bias focuses on our tendency to do everything in our power to avoid loss. In fact, the loss of something hurts us a lot more than to the happiness we feel when gain something. For example, most people consider the loss of $100 more significant than the happiness of gaining $200.
- Where to use it: Pricing pages, registration forms, landing pages
- How to use it: This bias is all about your content strategy and is very much worth testing. On your pop ups, pricing pages and even landing pages mention what a visitor may lose out on if they don’t perform a certain action, for example:
- Instead of saying: “Save money” say: “Stop wasting money”
- “This exclusive deal that runs out in X minutes” – consider adding a countdown timer
- “Only 5 more items in stock”
Law of the Instrument
- Definition: Also known as Maslow’s hammer, this bias stems from the old adage “to a man with a hammer, everything looks like a nail” and represents the over-reliance on a familiar tool even in the presence of better options.
- Where to use it: Landing pages
- How to use it:
- Show potential customers they’ve been trying the same solution over and over again with no success, while showcasing a new and improved way to solve their problem.
- Compare your competitors to yourself and highlight the benefits and advantages of trying the “new hammer”.
- Use visual aids such as a diagram or graph to show potential customers that the solution they think is helping, isn’t and how your product can.
- Example: HotJar uses a diagram on their homepage to show prospects the amount of money they’re currently spending on several tools while highlighting the significant lower price of HotJar, which has all the features of several tools in one.
- Definition: The tendency of people to like those who are similar to them. For example, we tend to like people who follow the same sports as we do or like the same cuisine.
- Where to use it: Explainer/Demo videos, landing pages, pricing pages
- How to use it:
- Use hero shots of your real customers on your homepage. If a prospect can see people similar to them featured on the page, the product will seem a viable solution for them too.
- Use testimonials of customers who faced similar issues and concerns as potential customers face.
- Use the same language as the customer uses – write for them in their words.
Mere Exposure Effect
- Definition: Our tendency to develop a preference for something just because it is familiar.
- Where to use it: User onboarding, Dashboard navigation, Landing pages, websites
- How to use it: Maintain the same look and feel throughout your entire design. For example, colors act as navigational cues for customers, the eye recognizes the CTA immediately and knows to look for it on every page. If you maintain the same colors for certain elements on the page, customers will feel more comfortable and will be more likely to take an action.
- Example: How to increase conversions by being completely unoriginal
- Definition: Mimicry is the unconscious or automatic imitation of gestures, behaviors, facial expressions, speech and movements . In reference to Marketing, mimicry can also be defined the way a prospect tries to mimic an existing user’s language or actions online.
- Where to use it: Emails, chat
- How to use it: Match your tone and style with the your prospects in all of your content, chat and emails. Marketers can instantly build trust by identifying their prospect’s words, tone of voice or preferences and matching the website to their audience.
- Example: Are you talking to your customers or at them?
Perceived Value Bias
- Definition: Quite literally judging a book by its cover, the perceived value bias is the tendency to judge the value of a product or service based on how it is presented to them.
- Where to use it: Landing pages, Welcome Emails & newsletters
- How to use it: A poorly designed website, emails or/and many bugs may cause the consumer to expect less value from the product it’s selling. The level of design heightens perceived value bias in the mind of the users.
- Definition: This bias stems from “Loss Aversion” and is our natural inclination to become fearful and anxious when there is a threat of losing out (a.k.a- FOMO- fear of missing out). This sense of anxiety from scarcity triggers us into action and causes us to become more vulnerable to temptation and impulse.
- Where to use it: Landing pages, pricing pages, email marketing
- How to use it:
- Limited time offers and time sensitive discounts are great ways to use scarcity and get people to take an action.
- Scarcity can also be used to increase the perceived value of a product, the fear that there is a limited supply of something can make a customer purchase quicker.
- On product pages in Ecommerce sites, you can display how many other people are reviewing the item you’re interested in to increase urgency and fear of losing out.
- Definition: When other people see someone like themselves purchasing a product or service it has a positive influence on their purchasing habits. From a marketing perspective, social proof is way of showing customers that similar people to them are utilizing and enjoying a product or service. If a consumer feels like their peers approve of a product or service, it will gain more trust in their eyes and their desire to use it too and its value will increase.
- Where to use it: Mainly on pricing pages, product pages in e-commerce, shopping carts and landing pages to increase trust and affinity
- How to use it: “When you say it, it’s marketing. When your customer says it, it’s social proof”.
- Most common tactic is displaying well known logos and seals on your pages.
- Including testimonials of people similar to your target audience
- Displaying reviews of your products.
- Mention the amount of satisfied customers you have, any awards you’ve won by well-known organizations and the amount of social shares or followers you have.
- Another well-known tactic is showing logos of publishers who’ve mentioned you (a.k.a – “As seen on” section).
- Examples: 10 Advanced ways I use social proof to increase conversions
Status Quo Bias
- Definition: The human tendency to prefer consistency over change. Essentially, most commonly we asses the potential loss of switching from the status quo more heavily than the potential gain of trying something new.
- Where to use it: Great for increasing retention rates.
- How to use it: To increase retention rates and keep customers buying we must constantly remind them of the wise choice they have made.
- Remind people of the value of staying with you and perhaps the loss they may experience by not staying with you.
- Personalize emails to create a sense of familiarity and strengthen your relationship.
- Get to know your customer better and push out content that’s relevant to them.
- Examples: How to build habit forming experiences
- Definition: Trust plays a huge game in the world of online experiences. Consumers must feel confident in your product, brand, or service.
- Where to use it: This psychological trigger should be utilized and emphasized on all online assets, from landing pages to entire retention processes.
- How to use it: There are many ways to increase trust and build on it for a ongoing relationship with your customers:
- Use the power of color psychology to enhance the sense of trust and security.
- Choose images that portray trust and feel relatable to customers.
- Displaying Well known icons, logos and authority figures are a great way to increase trust. Whether it’s your partner’s logo, client’s or simply a seal from a trusted and will known companies, these are known to increase conversions.
- Since other people’s reviews and testimonials about you are far more trustworthy than self proclaimed announcements, make sure to display and highlight those as much as possible.
- Display the amount of customers or users you have, display logos of well-known blogs and companies who may have covered you in the news.
- Examples: How to choose the right image for your landing page
Click here to download the cognitive biases cheat sheet
Powered by Facebook Comments
Talia teaches businesses how to plan and execute conversion optimization programs. She runs thousands of AB tests using emotional targeting, real time data and consumer psychology to increase online revenues, engagements and sales.
Talia is a frequent keynote speaker at marketing conferences, teaching conversion optimization and growth on stages such as Google, Unbounce, MozCon, GMIC, CXL live, Search Love, Learn Inbound and many more.
She is the Co-founder & CMO at Banana Splash and was recently listed as one of the most influential voices in conversion optimization.
Latest posts by Talia Wolf (see all)
Utilizing smart pricing when selling your wares, be they products, services or subscriptions, is a must if you want to succeed in a competitive marketplace.
The worst thing you can do is to try to wing it when it comes to pricing. Yet this is a mistake I see many entrepreneurs making.
Today we will take a look at some fascinating studies in behavioral economics that paint a clear picture of how you should properly set your prices--without the guesswork.
Let's take a look.
1. Similarity Can Cost You Sales
One of the concepts we continually obsess over at Help Scout is "analysis paralysis." Sometimes marketing (and pricing) needs to help customers get the difference between products, because as it turns out, too many options can be demotivating to consumers. Since this is the case, you would expect that having identical price points for multiple products would be ideal, right?
However, according to research from Yale, if two similar items are priced the same, consumers are much less likely to buy one than if their prices are even slightly different.
In one experiment where researchers had users choose to buy (or pass and keep the money) two different packs of gum, only 46 percent made a purchase when both packs were priced at 63 cents.
Conversely, when the packs of gum were differently priced--at 62 cents and 64 cents--more than 77 percent of consumers chose to buy a pack. That's a big increase over the first group.
The solution here isn't to set all of your identically made vintage T-shirts at variable prices for each color. Rather, you should recognize the psychology of what's happening. When similar items have the same price, consumers are inclined to defer their decision instead of actually taking action.
So when you have items that are similar but with different features (for example, a crew-neck shirt and a V-neck shirt), you should consider testing sales by changing their prices so that they are slightly different from one another.
2. Utilizing Price Anchoring
What's the best way to sell a $2,000 watch? Right next to a $10,000 watch!
A common cognitive bias called anchoring is the culprit here. Anchoring refers to the "human tendency to rely too heavily on the first piece of information offered when making decisions."
This bias is why a $2,000 watch almost seems like a bargain next to a more expensive watch, but would seem like a super-premium purchase when placed next to a $49 Timex.
This tactic is often used in restaurants, where expensive items are placed on the fringe of the menu to make other items look cheaper by comparison.
In a pricing study evaluating the effects of anchors, researchers asked subjects to estimate the worth of a sample home. Pamphlets provided to the subjects included information about surrounding houses; some had normal prices and others had artificially inflated prices.
The results: Both a group of undergraduate students and a selection of real estate experts were swayed by the pamphlets with the higher prices. Anchoring even worked on the professionals and had an influence on what estimate they gave the house.
By placing premium products and services near standard options you can create a clear sense of value for potential customers, who will then view your less expensive options as a bargain in comparison.
3. The Secrets of Weber's Law
According to a principle known as Weber's law (sometimes called the Weber-Fechner law), the just noticeable difference between two stimuli is directly proportional to the magnitude of the stimuli.
In other words, a change in something is affected by how big that something was beforehand. Weber's law is often applied to marketing, and particularly to price increases for products and services. When it comes to price hikes, the magic number seems to be somewhere around 10 percent, since that difference is typically not noticed by consumers (or is noticed but accepted) and isn't likely to stir up many customer complaints.
It's important to note that many variables can have an effect on pricing. These include foundational elements like supply and demand as well as constructed elements such as your business' authority, reputation and ability to inspire brand loyalty.
Weber's law serves more as a testing guideline than an ironclad rule that you must follow. But for many price hikes, the law should serve as an underlying number to begin testing.
4. Reduce Pain Points in the Sales Process
According to neuroeconomics experts, the human brain is wired to "spend 'til it hurts." We've shown you before how that affects the types of buyers your business it likely to attract.
Recent research from Carnegie Mellon University (CMU) has revealed quite a few ways businesses can reduce these pain points in the purchase process and, in turn, increase post-purchase satisfaction and retention.
Here are a few of my favorite methods:
- Reframe the product's value. It's easier to evaluate how much you're getting out of an $84/month subscription than a $1,000/year subscription, even though they average out to around the same cost.
- Bundle commonly bought items. Neuroeconomics expert George Lowenstein notes the LX version of car packages as a great example of successful bundling. It's easier to justify a single upgrade than it is to consider purchasing the heated leather seats and the navigation and the roadside assistance individually.
- Sweat the small stuff. In another CMU study, trial rates for a DVD subscription increased by 20 percent when the messaging was changed from "a $5 fee" to "a small $5 fee," revealing that the devil really is in the details.
- Appeal to utility or pleasure. For conservative spenders, a message focusing on utility is more effective: "This back massage can ease back pain." More liberal spenders are persuaded by a focus on pleasure: 'This back massage will help you relax."
- It's either free or it isn't. "Free" is a very powerful word, as proven in a case study discussed in Dan Ariely's book Predictably Irrational. In the example, Amazon's sales in France were drastically lower than all other European countries. The culprit was that French orders had a 20-cent shipping charge tacked on (versus a free one in the other countries). It's best to not nickel-and-dime small charges; they could be drastically reducing conversions.
Testing these methods is a great way to begin eliminating those frustrating pain points that may be hurting your sales.
5. Try Out an Old Classic
Ending prices with the number 9 is one of the oldest pricing methods in the book... but does it really work that well?
According to research from the journal Quantitative Marketing and Economics, the answer is a resounding yes. Prices ending in 9 were so effective they were able to outsell even lower prices for the exact same product.
In comparing the prices $35 versus $39 for women's clothing, the study found that the prices ending in 9 were able to outperform the lower prices on average by over 24 percent.
For a split second while reading the study, I thought the number 9 might have met its match. Sale prices--"Was $60, now only $45!"--were able to beat out the number 9. But my feeling didn't last for long. When the number 9 was included with a sales price slash, it again outperformed lower price points. So given the options between:
- Was $60, now only $45!
- Was $60, now only $49!
...the bottom sale price outsold the top one, even though it was more expensive. Ignore the power of the number 9 at your own risk!
6. Emphasize Time Spent vs. Saved
Why would a bargain beer company like Miller Lite ever choose "It's Miller Time!"for their company slogan? For a business that you know does massive amounts of testing for its advertising, this seems like a foolhardy choice. Shouldn't they be emphasizing their reasonable prices?
According to new research published by Stanford University's Jennifer Aaker, reasonable prices would actually be a terrible benefit to market. Her study shows that consumers tend to recall more positive memories of a product when they are asked to remember time spent with the product over the money they saved.
According to Aaker:
Because a person's experience with a product tends to foster feelings of personal connection with it, referring to time typically leads to more favorable attitudes--and to more purchases."
In a discussion published by the Wharton Business School, Aaker notes that many purchases tend to fall in either the "experiential" or "material" categories. Business owners should adjust their message accordingly. Purchases like concert tickets benefit more from the "time spent" messaging, whereas expensive designer jeans are aided by the reminders of money and prestige.
7. Never Compare Prices Without a Reason
If you go about it the wrong way, chest thumping about low prices can grant you a one-way ticket to abysmal sales.
According to research from Stanford, the act of comparative pricing can cause unintended effects in consumer evaluations if there is no context for why prices should be compared.
Asking consumers to make explicit comparisons about the price of your product and a competitor's can cause prospects to lose trust in your marketing message. According to the lead researcher:
The mere fact that we had asked them to make a comparison caused them to fear that they were being tricked in some way."
An example of a brand that does give a good reason to make a price comparison is Esurance. They explain why cheap insurance isn't always the answer and give customers plenty of insightful information on how they lower prices the right way--by eliminating needless expenses through their online-only approach.
The focus should be on why prices are cheaper, not just that they are.
8. Utilize the Power of Context
Is there ever a time that one Budweiser is worth more than another? Logic would dictate that this answer be "no," but bar hoppers know that just isn't the case.Where you buy is just as important as what you buy.
In a Vanderbilt University study published in the New York Times Magazine, customers were willing to pay higher prices for a Budweiser if they knew it was coming from an upscale hotel versus a run-down grocery store.
According to economist Richard Thaler, it was context that had the effect here. The perceived prestige of the upscale hotel allowed it to get away with charging higher prices.
It struck subjects as unfair to pay the same.
This is why people will pay more for a "multimedia course" over an eBook, even if the information offered is exactly the same. You need to provide potential customers with subtle cues (creating company authority with smart copy and social proof) that justify your premium prices, because perception goes a long way toward influencing their evaluation of your prices.
9. Test Different Levels of Pricing
Could you be hacking and slashing away at your own profits just because you aren't offering enough pricing options? According to William Poundstone, author of the book Priceless: The Myth of Fair Value, it's very likely that this is the case.
In his book, Poundstone examines the purchasing patterns of consumers on a selection of beer (yet another study about beer!). In the first test, there were only two options available: a regular option and a premium option.
(Images courtesy of Nathan Barry)
Four out of five people chose the more popular premium option. But could adding a third item and price point increase revenue by targeting those looking for a cheaper option? The researchers tested this by adding a $1.60 beer to the menu.
Oh no! The cheap beer was ignored and it upended the ratio of standard to premium purchases. This was clearly the wrong choice, since in this instance anchoring is actually playing a negative role. If customers don't want a cheaper beer, perhaps a more expensive beer might work?
These examples clearly show important it is to test out different brackets of pricing. This is especially true if you believe you may be undercharging. Some customers are always going to want the most expensive option, so adding a super-premium price will give them that option and will make your other prices look better by comparison.
10. Keep Prices Stupidly Simple
Let's end with the silliest study on pricing ever. In a research paper published in the Journal of Consumer Psychology, researchers found that prices that contained more syllables seemed drastically higher to consumers.
When these pricing structures were shown to subjects:
... the top two prices seemed far higher to consumers than the third price. This effect occurs because of the way one would express the number verbally: "One thousand four hundred and ninety-nine," for the comma versions versus "fourteen ninety-nine" for the unpunctuated version. This effect even occurs when the number is evaluated internally, or not spoken aloud.
As goofy as this may seem, there are some important implications. You should make a sincere effort to avoid all unnecessary additions to your pricing structure, giving priority to the simplest style possible.
Gregory Ciotti is on the customer success team at Help Scout, the invisible email support software. Through a beautiful dashboard, data-driven reports, and a slew of other wonderful features, Help Scout can help you transform your customer support.
Follow Gregory Ciotti on Twitter: www.twitter.com/GregoryCiotti