Applying Psychology to Increase Conversions

Issue 37

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Conversion is a function of what people read and see on your page. From that perspective, three factors become very important for driving conversion.

The first one is confirmation bias which is our tendency to find information that confirms our existing beliefs/hypothesis. Confirmation bias massively affects the strategic decisions we take.

The second one is the information that can help people make decisions. The information can be shared through any format, be it text, images, videos, etc.

The third factor is copywriting, i.e. writing the text of product and marketing pages. Take it from David Ogilvy, one of the top marketers of all time

“When I write an advertisement, I don’t want you to tell me that you find it ‘creative.’ I want you to find it so interesting that you buy the product.”

We will discuss all three factors in this essay.

Confirmation Bias - The Mother of All Biases

Confirmation bias is our tendency to find information that confirms our existing beliefs/hypothesis. Here is an illustration of confirmation bias.

I have been there, have you? :)

Confirmation bias is especially strong for emotional issues or deep beliefs like those around politics and religion.

A lot of people I meet have heard about this bias somewhere, and they sometimes use it without fully understanding the power of confirmation bias. To apply it well in product management and growth, it’s important to understand it well.

So let’s start by discussing how confirmation bias happens. There are three ways it happens:

1. Biased search for Information - If you were to search “Are cats better than dogs?” in Google, you will get sites listing the reasons why cats are better.

   

   However, if you were to search “Are dogs better than cats?” Google will provide you the sites listing why dogs are better than cats.

   

   We should always keep this in mind when you researching on Google. Mind your words and the way you frame the sentences. On that note, Google should probably work on removing this bias :)

2. Biased Interpretation - We can interpret the same sentences in our own ways. An experiment conducted by Stanford University on the topic of capital punishment included both kinds of participants — those in support of and others against capital punishment. Scientists provided all subjects the same two studies. After reading the studies, participants still held their initial beliefs. They supported their reasoning by providing “confirming” evidence from the studies and rejected any contradictory evidence, or considered it inferior to the “confirming” evidence (Lord, Ross, & Lepper, 1979).

3. Biased Memory - We remember/recall information selectively that supports their beliefs. In one experimental study, participants were asked to read an extensive account of events in 1 wk of the life of a woman named Jane. Two days later, they used this previously learned information to test hypotheses about Jane's suitability for 1 of 2 jobs: either the rather extraverted job of real estate salesperson or the rather introverted job of a research librarian. Those assessing her as a salesperson better recalled extroverted traits while the other group recalled introversion traits (Snyder & Cantor, 1979).

Reading around confirmation bias makes it sound bad, but it’s not all that bad. We need confirmation bias in our lives to operate. Confirmation bias is a reason why we love music so much. Daniel Levitin wrote in This Is Your Brain on Music

As music unfolds, the brain constantly updates its estimates of when new beats will occur, and takes satisfaction in matching a mental beat with a real-in-the-world one.

Confirmation bias also helps us in processing information efficiently in our everyday lives. We are also exposed to limitless information through the internet nowadays. We can’t process it all if we had to analyze all the pieces of information.

It also protects our self-esteem and makes us feel confident by reassuring us around our beliefs. We can’t always keep second-guessing ourselves, it’s not practical.

In a way, confirmation bias is a two-edged sword. Being aware of this bias helps to throw away bad ideas.

Where does it have to do with conversion?

So far we have discussed what confirmation bias has to do with us on a personal or professional level. How does it help in conversion?

Let’s assume for a minute that we don’t understand the audience, their beliefs, and their assumptions well. It will be hard to create a pitch that they can relate to in that case. It can backfire as well if we end up challenging their assumptions/beliefs where they leave without hearing the whole thing.

On the other hand, if you understand your audience well, and your message sits right with them, they might give you a chance to explain what you have to offer and some of them will convert.

Let’s take an example here. Suppose you are building a course for working professionals in India. Should you build the one where you can offer a certification/degree or the one where you are advocating that degrees are useless?

In India, we have always seen college degrees as a good thing. Trying to convince the audience otherwise may backfire. upGrad.com is an example of this which offers online college degrees to working professionals — Move up in your career with specializations from top universities. Udacity, on the other hand, offers — The latest digital skills, within reach. Time will tell which one will succeed in India, but confirmation bias is in favor of upGrad.

This isn’t to say we shouldn’t help people overcome their biases. But don’t lean on it to improve conversions without investing heavily in changing people's perceptions. Go after it if you have the time and resources.

Helping People Make Decisions

To help people make decisions, we have to think about what factors affect/influence the decision making. We will discuss some of the important factors here.

Social Proof

Social proof was identified in 1935 by Muzafer Sherif, a social psychologist in an experiment discussed below.

Subjects were seated in a dark room and asked to stare at a pinprick of light a few feet away from them. They were asked to estimate how much the dot was moving. In reality, the light was stationary but the autokinetic effect (an observation that stationary objects appear to move when there is no second point of reference to compare them to) led people to believe it was moving.

A week or so later, the experiment was repeated but this time in groups. People were asked to shout out their estimates of the movement and Muzafer Sherif observed that the group would tend to converge on an estimate – even if these estimates were vastly different from those that they had given in the first part of the experiment. The experiment was then repeated again with the individuals on their own and their estimates tended to remain with the group output rather than with their own original estimate.

In short, social proof demonstrated that we are likely to converge on a course of action (signups, payments, etc) when others are doing the same.

Social proof is popular in product circles because it’s very intuitive. Almost all products do it knowingly or unknowingly. For example,

• Ratings and reviews on Booking.com, Amazon.com

• # of people using the app on Playstore

• # of subscribers to a newsletter/blog

• Testimonials from other customers on SaaS products

Social proof is used extensively because it is pretty useful in providing trust markers. A user thinks - “If people like me have benefitted from a particular service and are happy, my chances of making a wrong decision reduced significantly.” Users don’t have to do a lot of research/analysis which saves a lot of time.

In fact, the most powerful growth channel is built on social proof — referrals. We tend to trust a referral from a friend or family member over anything else.

The Paradox of Choice

We believe that more choices are always better. The paradox of choice states that while we might think that more choice would make us happy, the reality is that it often doesn’t. Sheena Iyengar, Professor of Business at Columbia Business School, did this study on people purchasing jam,

In a study on the effects of choice on motivation, researchers set up a jam tasting booth at an upscale grocery store. On some days, they displayed a limited selection of 6 flavors; on others, they put out a much more extensive assortment of 24 flavors. Customers were allowed to taste as many jams as they wanted. They were then given a coupon, valid for one week, that entitled them to a small discount on the jam. The coupons were marked with code numbers so that the researchers would know which customers had cashed them in. In the end, 30% of customers who visited the smaller booth came back to buy some jam, compared to a meager 3% of customers who saw the booth with the larger selection.

Despite the increased sense of freedom that comes with more choices, we often grow tired of making choices because

1. Lots of analysis among multiple choices leads to decision fatigue, so we simply stick with the status quo or delay our decisions.

2. Even if we make the decision, we get into a post-purchase ‘angst’ where we worry about whether the decision we made was the right one.

This leads us to another question. Should we simply reduce the choices available to consumers? Not necessarily. In some cases, more choice is preferred, and in others, it is not. Less choice is preferred when:

• People are unsure of their preferences

• People are not familiar with the options

• The options are similar with no clear better option

• The options are difficult to evaluate or compare

• When choosing a more utilitarian, necessity product – as opposed to a more luxury or hedonistic product

Sheena Iyengar points to four effective strategies that can help in decision-making:

1. Reduce the number of choices

2. Make the consequences of each choice clear 

3. Structure and categorize choices

4. Start with the easy choices before moving to the more complex choices

Each of these four strategies makes it more likely that we will feel happy about our choice. VWO published a study with Lyyti that simplified their pricing page from four columns to three. They didn’t eliminate any pricing tiers. Instead, they categorized the features better [strategy #3] and allowed you to select a free trial on any of the plans.

The variation ended up increasing visits to their free-trial page by 93.71%:

One way to quickly check whether your pricing pages are leading to analysis-paralysis is to show it to few people around and ask them to pick an option they like most. If they struggle with making a choice, it’s time to rethink the page.

Scarcity

We tend to like things that are harder to obtain. Scarcity is the psychological bias that makes us place a higher value on things that are scarce than those in abundance.

Scarcity is extremely powerful and fairly easy to implement. And the reason it’s so effective is that it combines multiple biases into one: loss aversion, social proof, and anticipated regret.

Loss aversion — If we don’t act upon a scarce product, it basically means we’ll lose both the product itself in the short run but also our freedom to choose it in the long run.

Social proof — Usually, products become scarce when the demand is high. Once that happens, it implies that other people bought it in the past so it must be valuable and we should seize the opportunity.

Anticipated regret — When facing a decision, we anticipate the associated regret we might experience. Deciding to act now is our attempt to try and eliminate that possibility.

One might argue that scarcity forces users to make a decision, but If we fail to tell people about the scarce product in time, it is just as bad. As long as we are presenting the facts and we are putting out the real numbers, it shouldn’t matter.

Scarcity can be of three types and you should check what can apply to your product.

1. Time-limited scarcity

When the time has a limit, it creates a deadline that makes people act before the time is up.

Examples: Limited-time deals on eCommerce websites like the lightning deal on Amazon

2. Quantity-limited scarcity

Quantity-limited scarcity is considered more effective than time-limited scarcity because the end of the supply is unpredictable, depending exclusively on-demand rather than time.

Examples: On Booking.com, they show the number of rooms left

3. Access-limited scarcity

It refers to limited access to features like information, groups, or spaces. Research showed that censorship made people place a higher value on the restricted features than those that were not because exclusivity made them feel special.

Examples: Tinder uses the “Elo” ranking system to rate members based on desirability and invites the top ones to join the closed version called Tinder Select.

Access limited scarcity was also used by OnePlus to create a waitlist.

Priming

Imagine you’re driving to buy some groceries on a sunny afternoon in Bangalore. The traffic is peak and you take around an hour to find a parking spot. You’re already in a foul mood when you enter the supermarket. What happens next? On your way out, you take out your frustration on the person at the billing section.

So what happened? It’s a phenomenon called Priming. You aren’t alone in experience this, every one of us has been there multiple times a day.

Priming is a bias whereby exposure to one stimulus (delay in finding the parking space) influences our reaction to the next stimulus (interaction with the supermarket employee).

Priming has strong effects on our behavior. One of the most fascinating studies around it was published by John Bargh.

In the first experiment, a group of participants was primed with stereotyped words related to elderly people, and the control group was given a list of neutral words. The researchers discovered that the former set walked slowly after the experiment as compared to the control group.

The second experiment revealed that participants that had been primed with words related to rudeness interrupted the experimenter on average after five minutes. Of those people who were primed with polite words, 82% never interrupted at all!

From the experiments, it’s clear that we behave a certain way because we are primed to do so.

So what’s happening here? Basically, when a person is primed, the information in their memory is temporarily activated, which then influences their response to the next stimulus.

Interestingly, it has a direct application in user experience and conversion. When users visit your website, everything they see and read can prime them in one direction or other. Just look at Audi’s page versus Maruti's page.

In the first fold, Audi has words like future, beyond, experience, progress, etc.

In the first fold, Maruti has multiple images around EMIs, features, care/support, etc.

Similarly, we can prime visitors’ expectations and their overall perception of the website through copy, colors, and images.

Copy

Talk to your customers in a way they’re familiar with. Open your ears to the words/phrases they use on an everyday basis. Incorporate those in your copy.

You can also analyze your competitor’s website for inspiration. What are some of the most frequent themes and words they use and why do they use them?

Colors

Colors have different meanings and can be used to prime emotions. Be aware of your target group and their understanding of colors and the emotions they elicit.

Images
Use pictures to prime your customers. You can prime emotions that come with the purchase of your product or you can prime a desirable action that requires the purchase of your product. Let’s look at the Airbnb home page for example. It makes you long for a holiday.

Authority

As human beings, we have evolved over the millions of years as a herd, led by a leader. The leaders made the big decisions and the rest followed suit.

As a result, we have a deeply rooted sense of duty to follow authority — celebrities, politicians, experts. This is known as authority bias — if someone in authority is speaking something, they must be right.

Websites/apps use trust seals of easily recognizable and reputable brands. Well-known logos and brands are remembered more often and make a user feel secure while making payments.

Authority bias is also used to create strong brands through association with authorities. Nike builds a strong durable sports brand by associating itself with super athletes.

Anchoring

Nothing is cheap or expensive by itself but compared to something.

Anchoring is a particular form of priming effect whereby initial exposure to a number serves as a reference point and influences subsequent judgments

Once you’ve seen a $150 burger on the menu, $50 sounds reasonable for the meal. At the supermarket, a $1,000 bag makes a $50 T-shirt look cheap.

A popular way of anchoring is used by websites in price presentation to influence price perception.

Here’s an example from The Economist that Dan Ariely talks about in his book Predictably Irrational. Take a close look at those prices.

If the Economist.com web subscription costs $59, and the one-year subscription to the print edition of The Economist costs $125, then the fair price of the print and web subscription combined should be $184.

But it’s not. It is also $125.

In reality, the stand-alone print subscription of $125 is a decoy, i.e. no one is going to buy it. It does two things — first, it anchors you to a higher price to make $59 look like a cheaper option. Second, it makes print+web subscription of $125 look like a steal deal.

Decoy pricing or anchoring should be used carefully since it can backfire when the value you are offering doesn’t match the price.

Copywriting

For a long time in the history of marketing, copywriting mattered most. From Oglivey to Hopkins, everyone has written about the importance of copywriting. Part of the reason was that you could advertise in newspapers and magazines where people were mostly reading text.

With the internet and TV, videos emerged as a key advertisement format. However, copy still remains crucial. When you think about the famous commercials of Apple on TV - the 1984 super bowl ad or Think Different, it is the copy that mattered most. Take the one that Steve Jobs loved and was used in Think Different,

“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

While designing web pages and apps, copywriting becomes important in texts and videos. Why? Because a good copy converts. Here are six pointers to help you write a good copy for your products.

1. Framing

The same sentence can be framed in a positive or negative manner.

• Negative framing: Don’t be late.

• Positive framing: Arrive on time.

Research shows that negative frames reduce comprehension and degrade the impact of your message (Jacoby, Nelson, & Hoyer, 1982). So you should use positive frames for the majority of your sentences.

2. Serial Position Effect

The serial position effect refers to the finding that people remember the items presented at the beginning, or at the end of the list, relative to items presented in the middle.

For example, immediately after the presentation of a nine-item word list, individuals with normal memory ability might recall about 70% of the first three words, 60% of the last three words, but only 40% of the middle three words.

How can you use this? While listing the benefits, present the most important benefits in the beginning or at the end.

3. Bizarreness effect

Anything strange or unusual that causes interest or amusement has a higher recall.

As explained by Seth Godin of Purple Cow:

“If you travel on an airline and they get you there safely, you don’t tell anyone. That’s what’s supposed to happen. What makes it remarkable is the service is so unexpected (they were an hour early! they comped my ticket because I was cute! they served flaming crêpes suzette in first class!) that you need to share it.”

4. Using active over passive voice

Active sentences are more persuasive. Why? Hosman (2002) explains

“Sentences with more complex grammatical structures [are] more difficult to understand or comprehend. This comprehension difficulty could affect the persuasion process negatively, presumably because comprehension is an antecedent to persuasion…” (pp. 373)

Active sentences increase processing fluency. Because readers can digest your message more easily, they feel better.

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So where do you go from here after reading this long post? Keep it for reference and take a landing page of a website you love and see where they are using one or more of these methods. Over time, you will start getting inspiration for your own products.

Here is a summary if you are trying to remember it all

1. Don’t fight confirmation bias unnecessarily. Understand your consumer’s needs, beliefs, and assumptions.

2. Help consumers make decisions — social proof, scarcity, authority, priming, a clear set of choices, anchoring

3. Copywriting — positive framing, bizarreness, serial position effect, using active voice

With this, I conclude this week’s post. Next week, we will discuss using psychology to retain users.

Sincerely,

Deepak

Twitter | LinkedIn

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