When customers find out their favorite retailer or servicesÂ provider is merging with another organization, their firstÂ reaction is fear: that the combination will result in poor serviceÂ or otherwise degrade their relationship. When those fearsÂ become reality due to mismanaged integration activities, theÂ resulting customer exodus can be deadly to the value of theÂ deal. However, analytics has emerged as a powerful tool forÂ combating customer dissatisfaction and defection during aÂ merger. Leading organizations are using analytics to createÂ more potent and effective customer migration strategiesÂ and subsequently generating greater value from their dealsÂ more quickly. When it comes to converting consumers, the secret to more sales is as simple as understanding just what your buyer wants (and expects) from your business.
Businesses often have many customers buying their productsâ€”or at least too many to get to know each personally. When thatâ€™s the case, whatâ€™s to be done?
The answer: Turn to rigorously tested research on consumer behavior.
We are all different, but in many instances our brains are prone to react in a similar manner, and understanding these subtleties in the human mind can help your business find creative ways to ethically move more buyers towards saying â€œYes!â€ to your products or services.
This resource includes 10 studies that reveal such insights into the minds of your customers. Letâ€™s dig in!
A. Breaking Through â€œAction Paralysisâ€
We all know that small things make a big difference when it comes to copywriting. Interesting research by Dr. Robert Cialdini, Professor of Psychology at Arizona State University examined the donation process of the American Cancer Society, and how a minute change delivered drastically different results.
The research also reveals why itâ€™s important to analyze why people say â€œno,â€ rather than always looking at why they say â€œyes.â€
Below are two phrases used to wrap up a door-to-door donation request. Researchers tested the effect of the slight variation in wording.
- 1“Would you be willing to help
by giving a donation?”
- 2“Would you be willing to help
by giving a donation? Every penny will help.”
Subtle difference, right?
The wording may be subtle, but the resulting effect was drastic.
People who were asked the second variation were almost twice as likely to donate.
The Best Part of this Whole Study
Donors were twice as likely to give in response to the second question, but the amount they gave did not diminish. Knowing that â€œeven a pennyâ€ was enough still catalyzed them to give as much as respondents to the first question gave.
Implying that a small action is a good start will make people more amenable to making a move. When making a request for people to take action, clearly identify a minimum in order to help people break through â€œaction paralysis.â€
B. Embrace the Power of Labels
You might think this refers to brand labels, but far from it. We are suggesting you label your customers!
Sounds like bad advice, right? WRONG!
Research has shown that people like being labeled, and they are more inclined to participate in their â€œgroupâ€™sâ€ message if they feel included.
The study examined the voting patterns of 133 adults to see if labeling them had any affect on their turnout at the polls.
After being casually questioned about their regular voting patterns, half of the participants were told that they were much more likely to vote since they had been deemed by the researchers to be more politically active.
(This wasnâ€™t actually true; these people were selected at random.)
The other half of the participants werenâ€™t told anything;
they were just asked to describe their voting patterns.
Despite this random selection, the group that was told they were â€œpolitically activeâ€ had a 15% higher turnout than the other group!
We enjoy being consistent so much that even being told we are a part of a group makes us more receptive to itâ€™s message, as long as itâ€™s something we approve of (like being a responsible voter). This is why â€œgoldâ€ or â€œplatinumâ€ status works effectively for a customer loyalty program.
People who are labeled as â€œsuperiorâ€ consumers tend to spend more, and those in the â€œregularâ€ class arenâ€™t affected.
C. Understand the 3 Types of Buyers
3 Types of Buyers
Which type of buyer is most difficult to convert?
Fortunately, the secret boils down to utilizing well-written copy that appeals to their apprehensive nature. According to some remarkable neuroimaging studies, minimizing buying pain for tightwads (and everybody else) can be successfully accomplished by incorporating three simple strategies.
1. Reframing Value
If you see a product that costs $1,000 per year, youâ€™d definitely approach the purchase with a little caution, right?
Right! Thatâ€™s because $1,000/year isnâ€™t peanuts. To make matters worse, it seems like a HUGE amount of money for conservative spenders.
What if the product was just $84 per month instead? Not bad, right?
The thing is, $84/month is the same as $1,000/year!
While this reframing method is effective for buyers of all types, it is most effective when targeting conservative spenders. If youâ€™re offering something that has a recurring cost or that can be broken down into smaller increments, be sure to investigate how you can utilize this information in your pricing model.
2. Reduce Pain Points with Bundling
Neuroeconomics expert George Loewenstein notes that all consumers (especially conservative spenders) prefer to complete their purchase in one easy fell swoop rather than purchase multiple accessories separately.
He cites customersâ€™ willingness to upgrade car packages all at once, but points out how difficult it often is for the brain to justify each individual upgrade (â€œYes, I will pay extra for navigation … and … seats … and …,â€ etc).
These individual purchases create individual pain points, whereas a bundled purchase creates only one pain point, even if the price is much greater.
Loewensteinâ€™s research shows why many consumers are willing to pay more for complete bundles rather than chasing down individual products and accessories: not only is it less of a hassle, but it also results in fewer purchase pain points.
3. Sweat the Small Stuff
We all know the old adage â€œdonâ€™t sweat the small stuffâ€ isnâ€™t all that applicable to crafting effective copyâ€”but how small of a change matters?
One of the goofiest conversion bumps ever is a study done by Carnegie Mellon University that reveals the impact of a single word on conversion rates.
Researchers changed the description of an overnight shipping charge on a free DVD trial offer from â€œa $5 feeâ€ to â€œa small $5 feeâ€ and increased the response rate among tightwads by 20 percent!
Letâ€™s see those side-by-side, just to point out how absurd this is:
Has the word â€œsmallâ€ ever felt so big? With a single word bumping up conversion rates by that amount, itâ€™s safe to say that when crafting copy targeted at conservative spenders, the devil is in the details.
D. Highlight Strengths by Admitting Shortcomings
Leeâ€™s study aimed to measure the effects of admitting to missteps and faults, and how these actions would affect stock prices. Experimenters read one of two fictitious company reports. (Both reports listed reasons why the company had performed poorly last year.)
The first report placed emphasis on strategic decisions.
The second placed emphasis on external events.
(e.g, the economy, the competition, etc.)
Admitting to honest errors in judgment helps your customers understand that you are still in control of the situation and not prone to making excuses.
E. Use Urgency the Smart Way
How can you prevent this from happening to you?
The research is a classic study by Howard Leventhal where he analyzed the effects of handing out tetanus brochures to subjects.
Those who had the second pamphlet (with the sparse follow-up info) were much more likely to take-action; the rate that followed through with vaccination was superior to the first group by nearly 25%.
Leventhal also had a separate group receive a â€œlow fearâ€ version of the pamphlet, which described tetanus in much more moderate language and with no graphic pictures. He noticed that these participants had nearly the same rate of respondance as those who had received the standard â€œhigh fearâ€ version (without the follow-up info).
The Results are Clear:
Invoking urgency only had a noticeable effect when follow-up instructions were given.
Those who received the follow-up info were also more engaged with the pamphlet as a whole, being able to recall much more specific information from the packet than other participants. Why?
Even though the follow-up information provided in the second pamphlet wasnâ€™t comprehensive, Leventhal was able to show that our minds are susceptible to blocking out information that evokes a sense of urgency if there arenâ€™t any instructions on what to do next.
He revealed that those who didnâ€™t receive follow-up information were prone to convincing themselves that, â€œI donâ€™t need to worry about this because it wonâ€™t happen to me anyway,â€ whereas those in the second group had little reason to feel this way because they had a plan to take action.
F. Make Their Brain Light Up Instantly
There are few things our brains love more than immediate stimulation.
Research has shown that instant gratification is such a powerful force that an ability to control against it is a great indicator of achieving success. Wow!
In terms of your customers, youâ€™re actually looking to do the opposite:
Customers feel instant gratification when they are rewarded after doing business with you.
Your copy should remind buyers of this advantage at every turn. When a potential customer is on the verge of completing a purchase from your business, they are heavily influenced by how quickly they can receive gratification for parting with their hard-earned money.
Several magnetic resonance imaging (MRI) studies, including one on nicotine addiction, have shown that our frontal cortex is highly active when we think about waiting for something.
On the other hand, our mid-brain lights up when we think about receiving something right away (and thatâ€™s the one we want to fire up!).
Words like â€œinstant,â€ â€œimmediately,â€ or even just â€œfastâ€ are known to flip the switch on the mid-brain activity that makes us so prone to buy.
In fact, other than the words free and new, â€œinstantlyâ€ just may be the most persuasive word you can implement into your copy.
(If you arenâ€™t selling digital goods, use words like â€œquickâ€ instead.)
Researchers have noted that the key to these words is that they allow us to envision our problem being solved right away; whatever pain point we are seeking to fix by purchasing something becomes far more enticing if we know our dilemma will be solved instantly.
Our brains love instant gratification and we become more prone to buy when weâ€™re reminded that we can solve our problems quickly. When consumers know they will be rewarded immediately, they will be anxious to buy your products.
G. Make an Enemy
In a highly controversial study entitled â€Social Categorization and Intergroup Behaviour,â€ social psychologist Henri Tajifel began his research trying to define just how human beings were able to commit acts of mass hatred and discrimination
(he cited the Holocaust as a haunting example).
They were later divided into groups based on their choices.
Tajifel found that he could create groups of people that would show loyalty to their supposed in-group and outright discriminate against outsiders … all with the most trivial of distinctions!
Despite these trivialities, when it came time to dole out REAL rewards, subjects had a huge bias towards those peers in their in-group and discriminated against handing out rewards to the so-called â€œothers.â€
You donâ€™t need a physical enemy; you need to be against a belief or idea in a way that resonates with your customers.
Our friends over at Copyblogger would assert that real publishers are self-hosted and that well-written content is the centerpiece of the Web. They back these claims by offering solutions that reinforce their assertions.
The focus isnâ€™t always on skewering your competitors in search for an enemy, but in associating yourself with certain ideals while distancing yourself from the rest.
Creating a unique selling proposition is as much about defining who your ideal customers are not as it is about defining who they are.
H. Stand for Something
Weâ€™ve talked about the importance of exclusion, but what about including those ideal customers?
People do care about being included with a brandâ€™s message, but only when they share the same values. In fact, for those whoâ€™ve stated that they have a strong relationship with a single brand, over 64% said it was because they had â€œshared valuesâ€ with the company in question.
Does your Brand Stand for Something?
According to findings from the CEB, people donâ€™t seem to be very loyal to companies at all. They are loyal to what the company stands for.
Communicate clearly and regularly with consumers about your companyâ€™s values. They may enjoy your products, but the most loyal customers love what you stand for and how you can help them; make it easy for them to see what youâ€™re about.
I. Play Devil’s Advocate
Are you familiar with how the term â€œdevilâ€™s advocateâ€ came to exist? Itâ€™s actually from an old process the Catholic church used to conduct when canonizing someone into sainthood.
A lawyer was instructed to be the devilâ€™s advocate for those being inducted as a saint, and their job was to find reasons and arguments that showcased why this person should not become a saint in order to create a more objective canonization process.
The marketing world has an important lesson to learn from this process.
According to research by social psychologist Charlan Nemeth (and his colleagues), the role of devilâ€™s advocate certainly plays a part in persuasion, but it is not one of creating true dissent! The research showed that TRUE dissenters have a meaningful impact when trying to persuade a majority group toward a different perspective.
When people are confronted with someone who truly appears to oppose their position, they begin to try to understand their point of view.
(Research in this area has also shown that dissenters in a group can enhance creativity and problem-solving.)
Those playing devil’s advocate?
They actually increase the resolve of the original majority
The researchers found that this was because group members did not take the critiques from the devilâ€™s advocate as seriously, and since the group was now bringing up (and subsequently dismissing) possible alternatives or flaws, they were much more confident in their original stance.
For marketers, this offers a much less scandalous opportunity: playing devilâ€™s advocate to your own products potential shortcomings. (â€œSome have said that my product is too complicated, but hereâ€™s why it isnâ€™t…â€) This can actually enhance your persuasive efforts as people see their concerns addressed before they buy.
J. Keep ’em on Their Toes
Whatâ€™s the number #1 thing that creates loyal customers? No surprise, itâ€™s the social construct of reciprocity.
Better yet, there is an even more powerful form available for business owners to use: the act of creating surprise reciprocity.
- 1Â In a study by psychologist Norbert Schwarz, he found that as little as 10 cents was enough to change the outlooks of participants who found the money by surprise, creating a more positive view of their day due to this small high-point.While this study was conducted in 1987, the implications remain the same:it doesnâ€™t take much to start the process of reciprocity; even the smallest of favors allow goodwill to be bought with customers, increasing loyalty and retention.Schwarz succinctly summed up this phenomenon as: “Itâ€™s not the value of what you find. Itâ€™s that something positive happened to you.â€
- 2Â In another famous study from Influence, Dr. Robert Cialdini noted that subjects were prone to rate others as much more likable when they had simply bought them a can of soda.
One of the best ways to employ this tactic to boost customer retention is to follow up with customers after they make their initial purchase with you.
Surprise them with something – anything will do!
- A free guide to their new product often works well for those selling software. For brick-and-mortar locations, things like a free plastic comb work wonders for businesses like barbershops.
- Zappos has admitted to regularly upgrading customers to overnight shipping without telling them, just to create a â€œWOWâ€ factor that wouldnâ€™t have been the same if it was mentioned on the sales page.
Even if you canâ€™t afford a gesture as big as that, remember, it really is the thought that counts! Our resource 25 Ways to Thank Your Customers highlights a number of ways you can use surprise reciprocity.