3 Proven Techniques to Increase eCommerce Conversion Using Psychology

April 27, 2020

A small restaurant in the city, in one of the busiest streets, was a popular place for people to stop by for lunch. They had a menu with everything from pasta to sausages, Mexican dishes, Indian food, and burgers. Probably more than 40 menu items available. 

One day the owner noticed that most people would be standing around for several minutes during lunchtime, exploring the menu, and trying to decide what to order. 

He observed that many people would walk in, look at the menu, and then just walk out again without ordering anything. What was the problem? They couldn't find what they were looking for? Did he need to add more options to the menu? Maybe, the already bottom low prices were still too high?

One day, while he was gazing at the indecisive crowd, a customer waiting in line turned to him and said 'Seems, you have too many choices on your menu; people take forever to order."

His jaw dropped. Of course, that could be the problem. People are confused with too many options and have a hard time making a decision.

The restaurant owner made a bold move and removed everything from the menu apart from 3 items. Guess what happened? Yes, sales went through the roof! A success, in addition to all the other economic benefits it offered.

People think they like choices, but in reality, we are too lazy to make simple decisions. 


What does this mean?

First, you need to understand your customers' thinking, behavior, and needs to offer them the best possible service.

Secondly, you can apply this knowledge to your eCommerce business, and try to increase your sales by helping your customers make a decision. Remove options, streamline the journey, avoid clutter and confusion, help people make quick and easy decisions. Reduce the number of choices to increase sales.

Let your customers do the selling for you.

Social proof is essential for your business to succeed, and that's why reviews and testimonials from customers are critical to creating trust. Offer customers a discount on their next purchase in return for leaving a review for the product they just bought. 

Social proof helps customers to feel confident about their choice. It's like a recommendation for something you discovered yourself.

Not only this, if it turns out their buying decision wasn't great, they have a backup plan which is pointing towards the reviewers, which conceived them into their choice. "Well, they said it was good, how could I know?"

On a more technical level, great reviews can help you to enrich your product information, but keep in mind that the reviews on a site like Amazon may play a different role than the ones on your site. 

Here is why. Amazon reviews are curated, crowdsourced content for a population of over 12 million products, a majority of which Amazon does not produce themselves but retails for others. Reviews do not only help customers but also helps Amazon to vet the product, and it's quality.

In your case, this may look slightly different, and while you surely want to have the best possible product, you may want to practice more control over your review. For example, someone could have mistakenly purchased your product, though it's something else, misunderstood the purpose, etc., and then leaves you with a crappy review. This scenario doesn't matter so much to Amazon due to its scale, but for your store and your own products, this is harder to deal with.


Using Urgency & Scarcity to increase conversion

Creating Urgency & Scarcity can help your conversion rates. Don't leave people the option to buy something forever, but give them a time limit.

How often were you not 100% sure if you should buy a particular product (mostly those things we bought and didn't need to begin with), and then kept postponing it further and further down the line?

By adding Urgency & Scarcity to the mix, we can "help" customers make faster buying decisions.

Ecstase


Ecstase does a great job using this technique in combination with its Instagram ads. They promote products based on what you previously viewed on their page and then created urgency by making them available in limited quantities.

Also, think about Black Friday sales or sales in general. There are a lot of psychological reasons that drive sales, such as fear of missing out, the reward system that kicks in when securing a "great" deal, and the shopping momentum that makes you buy more things than you need while on a shopping spree.

In a nutshell, you can create urgency by limiting your offer in terms of availability, quantity, or exclusivity, such as members-only offers.

Booking,com


Booking.com is doing a great job using all these methods together. On their booking page, they show how room availability is running low (urgency), when the last one was booked (social proof), and how you can get special offers by joining their membership program.


Framing your prices helps to add context and increases sales

Contextual price framing means adding information around a price that helps buyers to understand the actual price in more detail. This means a price on its own doesn't help a consumer to know if the value they will receive is adequate for the set price. Price framing allows you to charge more or less for the same product to the same customers by merely adjusting the context around the price itself.

Contextual Pricing: The Death of List Price and the New Market Reality is an excellent book about the subject if you want to read on.

Let's take a look at an example:

Price Framing



As you can see, by providing more and more of a contextual frame around the price, the perception of value is increased. In the last option, the customer receives multiple messages such as, it's a deal, it's 20% off the original price, the original price was 52 dollars more, and it's not much if you translate it into a monthly payment plan.

Here are some more examples from the web on how this can work.


As you can see by limiting choices and complexities, incentivizing and limiting the availability of your offer as well as by using some simple price framing techniques, you can already find several helpful ways to increase your sales conversions.

Read the rest of the articles from this eCommerce Business Setup Series:

4 Things That Make eCommerce Better than Traditional Retail

4 Approaches to Choosing the Right Technology for Your eCommerce

Keys to an Organized eCommerce Product Architecture and Inventory System  

Crafting a Smooth Operational Plan for Your eCommerce Store

How to Maximize the Potential of eCommerce Analytics & Tracking

How to Align Touch points to Maximize Conversion of Your eCommerce Site

Top Merchandising Strategies of the Biggest eCommerce Sites

Leveraging Retargeting & Automation to Increase eCommerce Conversions


Written by
Alexander Rauser
Alexander Rauser

CEO

Alexander Rauser is the author of Boardroom Guide to Digital Accountability and Digital Strategy: A Guide to Digital Business Transformation, and creator of the DSX Program, a digital strategy and transformation program for Enterprises.

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