Research from Eisenberg Holdings shows that the average company spends $92 to drive traffic and attract people to their site and spends just $1 to convert these people into customers. Research also shows that typical conversion rate on the average website ranges from 1 to 3 percent.
Most websites are poor at generating sales and conversions, and pretty much every website in the world has a conversion problem. Thankfully, there’s been a host of psychology experiments that reveal what really makes people act.
The Anchoring Effect
In 1974, psychologists Amos Tversky and Daniel Kahneman conducted an experiment to see how “anchoring,” or first-impression bias, influences people’s decisions. In the study, researchers asked people to estimate the percentage of African nations that are part of the United Nations. Before they could answer, though, participants were split into two groups, and each was randomly exposed to either the number 10 or 65. The findings of the study showed that people who were exposed to the higher number (65) were, on average, more likely to estimate that 45 percent of African nations are part of the U.N., while those exposed to the smaller number (10) estimated, on average, that 25 percent of African nations are part of the U.N. This is known as the anchoring effect in psychology, and its effectiveness has been consistently proven time and again.
So how can you use the anchoring effect to increase your sales?
If you want to convince people of the worth of your product, let them perceive it to be more valuable than anything else they can compare it to; this could be a competitor’s product or a similar product from you. Having your prospects believe that your product is of higher value than anything they compare it to will make them less likely to resist paying you the price you ask for it. For example, if your product costs $100, creating an initial perception that it is worth $1,000 or more will make significantly more people buy it with great satisfaction, since they feel they’re getting a bargain.
Less is More
How many options do you give people on your website, especially when it’s time for them to take action? It makes sense that offering more options will increase sales, but psychology says otherwise; in The Paradox of Choice, psychologist Barry Schwartz says that giving people more choices can often paralyze their decision-making ability and hurt your sales. This was demonstrated by the famous Jam Study experiment conducted in 2000 by Sheena Iyengar and Mark Lepper. The study, which observed the behavior of 754 shoppers in an upscale grocery store, found that presenting people with six options resulted in ten times more sales than if they were presented with 24 options. More options excite people, but giving people too many options makes them less likely to act.
Conversion optimization experts often advise using the “one page one action” principle; essentially, each page focuses on getting the users to do just one thing and nothing else. It could be to sign up, download a particular file or order something — however, you’ll require that users do just one thing.
The Authority Effect
Authority is one of the most effective forms of social influence, but exactly how effective can it be? Let’s take a trip back memory lane, in 1961, when the famous Milgram experiments began. The experiments were conducted to observe to what extent people will obey authority. The findings were surprising; it revealed that 65 percent of people are willing to obey an order from an authority figure, even if the order would be fatal to someone else. In comparison, only 20 percent of people will obey if the order came from a non-authoritative source.
So, while testimonials from people who are successfully using your products can boost sales, psychology shows that endorsements from authority figures in your industry will do much more for your sales. This explains why product sales and share value skyrocket when celebrities like Oprah Winfrey, Michael Jordan, etc., endorse a brand.
The Goldfish Effect
In early 2015, Microsoft conducted an experiment involving 2,112 people; 2,000 people were surveyed and the brain activity of the remaining 112 people was monitored with an electroencephalogram (EEG). The result was surprising; the study found that the human attention span has reduced from twelve seconds in 2000 to eight seconds today — shorter than the attention span of a goldfish. What does this mean for your sales? Here are some key stats worth paying attention to.
- A single second delay in your site loading time will result in a 7 percent loss in sales
- 51 percent of people cite a site’s slow loading time as the top reason they abandon a purchase
- An increase in site speed from 8 to 2 seconds can boost your conversion rate by 74 percent
These statistics point to something glaringly obvious: we are now increasingly impatient, and even the slightest delay can cause us to abandon an order. If you want to boost sales on your website, start by getting a better host to increase your site speed. Also, take things up a notch by using Zoho SalesIQ to ensure faster interaction with your users; the live chat option might be especially helpful for ensuring quick interaction with users. A faster site, and ensuring that you respond as quickly as possible to user requests, will result in a noticeable increase in sales.
Tap into the Power of Conditioning
One of the most condemned experiments in history is the Little Albert Experiment, aimed at observing the effect of conditioning in humans that, unfortunately, studied a one-year old boy. Before the experiment, the boy had a natural liking for animals, in particular a white rat, but at the end of the experiment he came to fear all animals and furry things, especially the white rat. This was made possible through conditioning; anytime Little Albert was exposed to the animals, the experimenting psychologist made a loud bang with a hammer hitting a metal, and this scared the boy. This was repeated again and again until the boy came to associate the loud bang with the animals; later, simply introducing the animals alone resulted in extreme fear in the boy, and this led to him crying and crawling away anytime he sees an animal. Little Albert has come to associate the loud bang with the rat.
How can this help your marketing? Just think about why people love Apple and wait in line for days to quickly get their products, and why most people go with Nike for footwear. There’s a feeling of luxury associated with the former and a cool-ness factor associated with the latter. You can also use this principle to boost your sales; find a positive and pleasurable association that you want to create in the mind of your prospects whenever they use your products, and make sure to emphasize this factor on your website. You’ll be surprised at how much of a boost in conversions this will result in; people are no longer buying your product, but they are buying the associated feeling/emotion.
Spice Things Up by Guarding Against Neural Adaptation
Most marketing is boring, and this has probably resulted in loss of sales. The importance of repetition for boosting sales has been long established; in fact, there’s a whole marketing principle dedicated to this. It is called “The Rule of 7” and basically states that the majority of your prospects need to be exposed to your offer at least seven times before they take notice and act. Research shows that repeated exposure to ads increases consumers’ preference for brands and products at a subconscious level — brands keep showing the same ads over again to the same people because it is working. This underscores the importance of automation and follow-up in marketing, and this couldn’t have been easier with Zoho Campaigns.
That said, while consistent follow-up is critical for boosting sales, it can be damaging if you don’t guard against neural adaptation. Also called sensory adaptation, neural adaptation refers to the change over time in our responsiveness/sensitivity to constant exposure to something; it explains why you no longer feel your clothes after a few minutes of wearing them, and why you suddenly get accustomed to warm or slightly hot water after it’s touched your body for a while. This same phenomenon explains banner blindness and pop-up blindness, as well as why people ignore a lot of common marketing techniques.
The key to boosting sales on your website, then, is to guard against sensory adaptation. For example, research has shown that using the same color for your order button as the color of your sales page can kill sales. Making the button color stand out instead has been proven to increase sales. So, spice things up a bit: when visitors to your website are starting to get accustomed to the look and feel, introduce an element that catches their attention and gives them a jolt that focuses their attention on your offer.
John Stevens is a consultant, hosting expert, and founder of Hosting Facts — a portal where he publishes unbiased reviews of web hosts.