Conversion Rate Optimization is a “test-and-learn” process that allows eCommerce marketers to turn more of their web traffic into sales. Because it does not rely on advertising, and directly increases revenue, CRO usually provides an impressive return-on-investment.
So, assuming you are already receiving enough traffic, you should be thinking about how to turn more of your visitors into customers. To do this, you need to begin with some customer research.
Once you have established how customers are using your site, you can optimize your content. To do this, you need to know a few things about Consumer Psychology:
- Cognitive Ease: Daniel Kahneman’s Thinking Fast and Slow suggests that people like to think as little as possible. Making your site as clear as possible will improve user experience and reduce bounce rates.
- Framing: Robert Cialdini’s Influence and Dan Ariely’s Predictably Irrational demonstrate that our perceptions depend on the way we receive information. Framing can help you to increase the desirability of your offers.
- Cognitive Biases: Roger Dooley’s Brainfluence outlines a number of irrational choices, preferences and preconceptions that affect customers. Understanding these biases allows marketers to create persuasive content.
Consumer psychology is an essential part of digital marketing. Understanding how people think and behave is the best way to provide customers with what they want. These are 4 easy steps to optimize your website and improve conversion rates.
Step 1: Landing Page Makeover
If you have spent time and money on expensive PPC campaigns or advertising strategies, you need to make sure your traffic does not immediately disappear. Reducing your bounce rate requires you to think like a customer. Every time someone arrives on a landing page, they ask themselves four fundamental questions:
In the early 1970s, Daniel Kahneman produced a series of research papers and monographs associating “attention” with mental “effort.” This was when the idea of Cognitive Ease emerged. Kahneman argued that the harder someone is made to think, the more uncomfortable they become.
In other words, the less a customer has to think to understand your landing page, the better the chances are of keeping them on your website. That means you need to make sure that you answer the four fundamental questions all visitors have as quickly and as simply as possible.
Step 2: Dressing Up Your Value
The most important part of an eCommerce website is the Value Proposition. This is the pitch you make to your customers, giving them a reason to buy your products. The problem is, even great value can sometimes go unnoticed. Because of this, you need to make sure your content is as persuasive as possible.
A great way to highlight the value of your products is by changing the way they are framed. In a famous experiment, Dan Ariely presented a class of students which three subscription options for The Economist. He then asked them which of the three they would choose.
A – $59 – Online only
B – $125 – Print only
C – $125 – Print and Online
16% of students chose A (Online only) 0% chose B (Print only) and 84% of students chose C (Print and web)
Ariely then presented another group of students with a different set of subscription offers for the same magazine:
A – US $59 – Economist.com subscription
C – US $125 – Print & web subscription
He asked them which they would go for. Remarkably, in the second group, 68% of students went for the online option (A) and 32% went for C (Print and web).
In other words, including an option that nobody chose (option B) increased the desirability of option C so much that over twice as many people chose that option.
The use of an irrelevant option is known as “Decoy Pricing” or the “Ugly Brother Effect.” It is a form of anchoring, and is commonly used in services that are sold as a bundle. However it is only one of the techniques commonly used in Price Optimization.
There are a number of ways to frame your products to highlight their value. The important thing to remember is that the way we receive information has a big impact on how we perceive it. Maybe this tip could be proved very useful for your cross-selling strategy.
Step 3: A Nudge in the Right Direction
Richard Thaler’s work on Nudge Theory has demonstrated the way that situational architecture affects everyday choices. This is an important thing to consider when you are trying to encourage people to buy from your store.
When making a payment, customers experience real feelings of discomfort. This phenomenon, known as “Pain of Paying,” is a major obstacle for eCommerce businesses, who face the added difficulty of gaining the public’s trust.
However, by adjusting the Choice Architecture presented by your website, Pain of Paying can be reduced and more of your visitors will become customers.
These are some common tactics used to reduce Pain of Paying:
- Outline a comprehensive return and refund policy
- Provide free trials with no hidden conditions
- Clearly display trust symbols and make sure you have an SSL certificate
- Ask for the least amount of information, and make payment pages as quick and simple as possible
The pain of Paying is not the only factor to consider when engineering your site’s Choice Architecture. The point is, to increase sales, you need to make it as easy as possible for customers to buy.
Conclusion
These three simple steps provide an easy way to give yourself a digital marketing makeover and optimize your website for conversions.
However, measuring your conversion rate and identifying problems when they arise is another matter. The average conversion rate for eCommerce is between 2% and 4%. Keeping an eye on your own conversion rate is important, but it is only part of the equation that leads to revenue optimization.
Average order value and customer retention are as important for eCommerce businesses as conversion rates. A well-managed customer management system, built around email messaging, is another good way to secure long-term revenues.
About the contribution author:
Stephen Courtney is a digital marketer with a passion for conversion rate optimization (CRO) and copywriting. He writes about marketing and neuromarketing research for Convertize.
