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The Google Shopping Blog

5 Ways Cognitive Biases Can Boost Your E-Commerce Conversions

Posted by Melanie Grano on Jun 29, 2017

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Some people are just plain irrational, aren’t they?

But not you.

Nope, you make completely logical decisions based on facts.

Wrong.

Unfortunately that’s your bias blind spot in action. It makes you believe, incorrectly, that you are less vulnerable to biases than other people.

In fact all us humans are incredibly irrational creatures. We make hundreds of illogical decisions every day without even realizing it. Worst of all, we convince ourselves that these decisions were the correct ones to make.

How? Why?

It’s all down to cognitive biases. These biases shape our view of the world and our actions. For all of you ecommerce owners reading out there, they can also impact our spending habits, too.

Employ cognitive biases on your online store and you could see a jump in sales. Manage to master just a handful, and the edge you have over consumers will be downright unfair.

What is a Cognitive Bias?

A cognitive bias is the tendency to act or think in certain ways, many of which are illogical. There are 175 recognized cognitive biases and we each fall victim to one of them every single day. It’s completely natural to have these biases; they’re what help us make sense of the world and keep us from being overwhelmed. But just because it’s natural to have these biases doesn’t mean you shouldn’t work to overcome them wherever possible.

Better Humans has done a great job of listing them all in this easy-to-read cheat sheet.

Our knowledge of the biases comes from psychology and economics, but it doesn’t stop us all falling victim to them in everyday life. They impact every area of our life from who we are friends with to what we buy and how we think.

Most of the time, we are completely unaware that we are being affected by a cognitive bias.

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Yup, we’re all Patricks.

How Can Ecommerce Owners Take Advantage?

Smart marketers can use cognitive biases to influence how customers feel about your online store. Used correctly, marketers can encourage potential buyers to make purchasing decisions more quickly and more frequently. In other words, using cognitive biases to your advantage can improve your conversion rates and boost your sales.

There’s a lot of information to take in and process when you make a purchase decision. That’s where cognitive biases come in: by acting as “shortcuts” in our thought processes.  It’s much easier for our brains to fall back onto one of these ‘shortcuts’ or cognitive biases and to start assuming things.

For example, our cognitive biases lead us to believe that  if 10,000 people have already bought a product, it must be good. Of if the price is cheaper than the nearest competitor, it has to be a good deal.

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Most significantly, the average consumer is completely unaware of their own cognitive biases. As far as they’re concerned, every decision they make was carefully and logically thought through.  

As a result, marketers can use tactics based on certain cognitive biases in order to elicit a particular response from visitors. In most scenarios, such responses will be an increased likelihood of them making a purchase, but owners can also use these cognitive biases to persuade visitors to sign up to their mailing list, sign up fora trial or leave a review.

5 Cognitive Biases That Can Boost Conversions

If you’re looking to leverage some biases in your online store, here are five conversion-boosting biases to test.

The Framing Effect

The way options are presented to us can impact how we react. Even if the information is the same, our brain can coerce us to choosing differently.

This idea was first researched by psychologists Amos Tversky and Daniel Kahneman. In their experiment, participants were asked to choose between two hypothetical treatments for a deadly disease. Treatment A was predicted to cure 200 patients and kill 400 patients. Treatment B, on the other hand, had a 33% chance that no one would die but a 66% chance that everyone would die. The choice was then presented to participants with either a positive or negative framing as shown in the image below.

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When treatment A was presented positively, 72% of participants decided on that course of action. But when it was presented negatively, that number plummeted to only 22%!

As we can see from Tversky and Kahneman’s experiment,the way information is framed can have a powerful effect on how it’s received and acted upon by your audience. We react much more strongly to negative framing than we do to positive framing.

For example, studies have shown that consumers are more likely to make a purchase immediately if there are only a certain amount of products left than if they were to receive a discount for making the purchase now. In other words, the fear of missing out or of loss is a stronger motivator than the benefits associated with getting a discount when it comes to purchasing decisions.

How to use this bias in your Ecommerce store:

  • If stock is low and won’t be replenished, don’t frame it in a positive light;e.g. “This is your opportunity to be one of the lucky few who get the product”. Instead, try framing it as a negative: “you’re going to miss out if you don’t buy now.”
  • If you receive a large amount of traffic, consider implementing a feature that tells users how many other people are looking at that same page. This creates a sense of urgency and competition, and as humans, we’re wired to want to “win” whenever we can.
  • If you offerdeals and vouchers, make sure they are time sensitive. If you don’t set and display a clear and definite end date – one that is sooner rather than later – customers won’t feel pressured to make a purchase. As soon as you set an urgent deadline, customers will start to feel pressure for fear of missing out. Yes, FOMO is a powerful tool if used correctly.
  • If you have a rewards program, consider reframing it. Instead of suggesting that customers have something to gain with your loyalty program, suggest that they have something to lose. For instance, if they get better prices when they order X amount of stock each month, frame it so that customers think they’ll lose their discount when they don’t purchase enough. Remember, a financial loss strikes a bigger nerve than a financial gain.

Examples in action:

Booking.com is a great example of the effectiveness of  reframing how users view booking hotels. Normally, consumers might not think that other people want the same room, but Booking.com makes it very clear how many other people do.

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If you’re concerned about framing being too negative or cynical an approach, remember: Framing doesn’t have to be negative to be effective. Ecommerce stores can use positive framing to make a sale.

Take a look at how Mailshake frames their annual pricing compared to the more common monthly option. Highlighting the 8% savings can be enough to lock some users in for the whole year.

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The bandwagon effect

The bandwagon effect, commonly known as the “herd mentality,” is the tendency to do or believe the same thing as other people. It’s based on the concept of social proof.

Few of us enjoy being perceived as different and we find it more reassuring to do the same thing as everyone else. As a result, we have a tendency to go along with the crowd when it comes to decision-making; even if it’s the wrong thing to do, our illogical brains convince us that it’s not so bad – at least we’re in the same boat as everyone else.

With this in mind, Ecommerce owners should look to reinforce the popularity of their products and services. By doing so, visitors will feel like they are following in the footsteps of hundreds of other people, and this “strength in numbers” approach will give them confidence that they are just like everyone else.

How to use this bias in your Ecommerce store:

  • Use reviews. If you have a lot of reviews, make them visible: the more reviews a potential buyer sees, the more confident they’ll feel that a lot of people have bought the product. On the other hand, if you are not able to collect enough reviews, then you will want to stay away from this option. Only showing one or two reviews may have a negative bandwagon effect and make  potential customers believe that not many people are buying your product (even if they are).
  • Make it real. If you collect a lot of reviews and handpick the ones that you display, no one blames you for hiding the bad reviews. But by cherry-picking your reviews, you’re missing an opportunity to demonstrate authenticity to your customers. Showing the bad review may seem like it’s going to decrease your chances of a sale, but the occasional negative review actually adds trust. And, as a bonus,  a bad review can make the other, more positive reviews look more genuine. Of course, if you use Google’s new review program, every review will display as a genuine, confirmed customers.
  • You can do the same things with your testimonials. When you’re only showing three testimonials, you’re not going to want to waste retail space with a bad review. But you can still make them look more genuine. Add a name and photographic image to every testimonials to reinforce the fact that they came from real people.
  • On your pricing page, highlight the package that you most want to sell as the ‘most popular’ option. The consumers’ cognitive bias will automatically associate “most popular” with “most desirable.”
  • On your email sign up pages and boxes, include a message like: “join millions of happy customers”.

Examples in action:

Codecademy has a great testimonial page which successfully leverages the bandwagon effect. There are dozens of examples of users who have found success as a result of the training and they all of pictures and a story to go with them.

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YoRocket highlights their middle tier package as the most popular option. In doing so, they increased the likelihood that users will choose this option, rather than the less expensive Solo option.

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Anchoring

Anchoring is the tendency to rely too heavily on a single piece of information – usually the first piece of information you receive – when making a decision. Instead of analyzing all of the information available, you rely heavily on your first perception.

Tversky and Kahneman were the first to research the theory behind anchoring. In 1974 they asked people to estimate how many African countries were in the UN. However, prior to guessing, participants were asked to observe a roulette wheel that was spun by the researchers and rigged to land on either 10 or 65. When it had stopped spinning, they asked participants to estimate if the percentage of countries was higher or lower than that amount. They also asked participants to estimate what the actual number was.

People who landed on 10 guessed around 25% of Africa was in the UN. Those who landed on 65 said around 45%. Their guesses were anchored by the first bit of information they were given.

Anchoring works particularly well with price. The first price a customer sees will be the anchor. If they see a high price and then a lower price for the same item, they’ll be much more likely to buy it even if they can get it cheaper elsewhere. Similarly, if a visitor sees that a price is lower on a competitor's product before they see your higher price, they are more likely to buy from your competitor.

The information you’re using as an anchor doesn’t have to be numerical or physical. If a customer has a bad impression of your company because a friend told them that your product didn’t ship on time, that is your anchor point. It’s why a lot of stores but customer reviews and testimonials in the spotlight.

By establishing an anchor of “This product is great!” in your customer’s head, they’re already expecting the best from your product. And when customers think a product is going to be good, they’re more likely to make a purchase and enjoy that purchase when it arrives.

How to use this bias in your Ecommerce store:

  • When creating a pricing table, place the most expensive plan on the left hand side. We read from left to right, so this will be the first price that users see. Having seen the higher price first (and possibly gasping) a potential customer will be much more likely to accept the lower price of your other package.
  • Exercise caution. If you run a subscription-based business that charges customers on a monthly basis, don’t advertise the price per month and then make customers pay the annual amount in one go. This is negative anchoring. Customers have anchored themselves to the seemingly cheaper monthly price, only to be faced with a huge figure right at the point of their purchase decision. Even if the prices are exactly the same, this negative anchoring will make customers lose trust in your company, and there’s a good chance they’ll close your page and never come back.
  • Don’t make your customers do all the work to find their anchor. While you can’t be sure that your product will be the lowest in the marketplace, you can do a lot of the heavy lifting  for your customers. If you can demonstrate that your product is cheaper than a wide variety of your competitors, they’ll be less likely to leave your store.
  • If you’re using Google Shopping to advertise your product, make sure the price and style of the product used in the advertisement match the product on your landing page. If the Google Shopping ad has a low price, that will become the customer's anchor. But if your product page displays a higher price when they click through, they won’t be happy. In fact, chances are they’ll leave and you’ll have wasted $5 for a click that didn’t yield a conversion.

Examples in action:

When Steve Jobs unveiled the first iPad, he used anchoring to make the $499 price tag palatable. To do this he quoted a journalist suggesting that the device should retail for under $1000. He displayed $999 on the screen behind him. This stayed on the screen for several minutes until Jobs stated that the actual price would be “just” $499. Despite being a large amount of money, by anchoring the audience to an artificially-high price point, consumers felt they were still getting a steep discount from the original $999. 

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(Source)

The Economist used a now legendary price anchoring strategy in a bid to sell print and digital copies of their magazine. The most expensive deal was anchored against two other price points in order to coerce subscribers to choose the “best offer”.

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(Source)

The von Restorff effect:

Also known as the isolation effect, this theory states that an item that sticks out is more likely to be remembered than one that blends in.

It seems pretty obvious, right? We all notice things that stand out and are more likely to remember them. It’s why highlighters exist: we use them in an effort to make information that’s most relevant to us to be more noticeable (and therefore more memorable).

The same principle can be applied to your ecommerce store.

There are certain areas that you want customers to notice. Depending on what you sell, it might be the price. But it might be reviews or the product images. In every case, it will also be the ‘add to cart’ button.

Whatever you want to draw the eye to, make sure that it stands out from the rest of the page. You can make the font bold, change the background color, place a box around the element. There are endless ways to make things stand out on your website.

How to use this bias in your Ecommerce store:

  • Make the color of important buttons contrast with the rest of the website. Do the same for any other call to actions. They’ll be more likely to catch the customer’s eye.
  • Decide what the biggest selling point of your product is and make this the most noticeable thing. For example, if the price of your product  is very competitive, make it large and show the value. If it’s the construction of your product, make sure the information is clearly displayed and highlighted.
  • Use retargeting to make your product stand out on multiple websites, wherever customers go next. Display ads are designed to stand out. Make the most of this by setting up a product-focused retargeting campaign that shows product-related ads to the user once they have visited your ecommerce store. Once they start to see it everywhere, they will be more likely to buy. Click here for tips on setting up a retargeting campaign.
  • This theory can also be used when you setup your Google Shopping campaigns, too. If you sell branded items, like athletic clothing, for example, have a quick Google of your products before uploading your product feed. You might just find that everyone is using the same image. If you were to use a completely different one, it might make users much more likely to click on your advert. Pareto’s law comes into play here, however. This only works if all other things are equal. If your charging 50% more than the rest of the stores, it doesn't matter how much your ad stands out, users won’t click.

Examples in action:

It’s not just the price of the fourth product that catches the eye, the image is completely different from all of the others. Not only does it use a model, that model is closer to the camera. The background is also a slightly different color which makes it stand out more on Google’s search results page.

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Information Bias

You always feel like you need more information, right? That one extra piece of information could make you even more informed. Most probably, however, it won’t help you make the decision. But it doesn’t stop us continuing to seek out more and more info.

This is the information bias: a tendency to believe that more information is beneficial, even when in reality it won’t make a decision any easier.

This is the final cognitive bias we will discuss and it’s also the one Ecommerce owners should use with the most caution. After all, the bias works both ways. Too little information, and users will leave your website to find additional resources. Too much information, however, and users may get information overload and not make a decision at all. It’s all about finding the Goldilocks zone: not too much, not too little, just right.

How to use this bias in your Ecommerce store:

  • Give visitors everything they need to make the decision upfront. This includes being clear about shipping costs and timescales before they click on the cart button.
  • Present product information in a clear and legible format so that readers can skim and read about the product in detail.
  • Don’t make the information so overwhelming that users can’t navigate the page or see your product for all of the information.
  • See our post on product descriptions for more information.

Examples in action:

Solo Stove is the leading wood burning backpacking stove in the US. A lot of customers might not know exactly what that means or how the product works, however. Luckily the website does a fantastic job of explaining the product through diagram-led slides that are easy to follow.

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Joovy does a similar job with their product descriptions. Moms want to know that their stroller has everything they will need, but they also don’t have time to run down every possible feature to determine whether it’s a fit for them.

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Joovy leverages information bias to show new moms everything their stroller needs to do, with images to show how their strollers can do just that. Everything is displayed clearly, there’s no need for mums to go anywhere else, especially when user reviews are at the bottom of the page.

It’s Time to Have a Bias

As we mentioned above, there are well over a hundred cognitive biases you could potentially leverage in your Ecommerce store. As a matter of fact, you might be feeling a touch of information bias here!  

But don’t fret about finding the best one. Instead choose one of the five we’ve covered here and start testing it today.

And as always, be sure to test and analyze your results. It’s the only way to know whether or not  a cognitive bias you’re looking to take advantage of is working.

Topics: E-Commerce, Selling Online, Digital Marketing, Digital Advertising

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