Articles Tagged with: buying behavior

Attentional Bias: How to Make Your Audience Focus on You

When you’re trying to cut down on processed food or eating out, the more you notice the fast food restaurants on your way home. If you’ve recently bought a car, you’d see the same car on every corner. If you love pink, you’ll most likely notice all the pink shirts in a store over other colors. This behavior is called attentional bias.

Attentional bias is a person’s tendency to see certain elements or selectively pay attention to something while overlooking other aspects. It explains why sometimes, people can’t concentrate on things even if they want to because something else has already captured their attention.

Some experts think that attentional bias is related to human evolution. Attentional bias is why people usually remember or notice images that use fear or threats as a tactic. The first humans often faced dangerous situations (such as a wild animal running after them), which required them to concentrate and have selective attention/

In marketing, attentional bias is used to capture and focus attention on the message you want to come across.

Here are specific strategies that a business can implement to use attentional bias to their advantage:

Repetition creates attentional bias.

Repeating something can establish an attentional bias. Repetition is why most people, even kids, recognize logos instantly. They’ve seen these logos over and over again throughout their lives. For example, McDonald’s consistently shows its logo throughout their stores and packaging. You’ll recognize the McDonald’s logo no matter what country you live in or how old you are.

Let’s look at a specific example you can apply to your business. For instance, you’re simultaneously preparing flyers, your website, and your email newsletter. It’s essential to have consistent messaging throughout a customer’s journey, including your business logo in all marketing collaterals. This repetition makes people recognize your brand more quickly and give it attention. 

Emphasize positive feelings.

Glowing reviews and positive testimonials create positive reactions towards a business or brand. For example, your business website can display high consumer ratings, positive reviews, and partnerships with well-known brands. Doing this generates positive feelings in your customers and makes them pay attention to your brand more than others.

Another way to emphasize positive feelings is to appeal to emotions. Appealing to a customer’s emotions is not new. We’ve all seen how ads use our emotions to elicit positive feelings towards a brand. An excellent example was Coca-Cola’s “Choose Happiness” campaign in 2015. It encouraged customers to share happy memories and experiences and made consumers associate these happy feelings with drinking soda.

Avoid too many choices.

When people are presented with too many choices, it becomes harder to make a decision. This situation is also due to attentional bias. Customers with too many choices often choose none of the options, resulting in a loss of a sale or conversion. When you limit the choices available, it’s easier for the brain to focus and decide on an option.

For example, if your has to choose between eight colors of a dress, it might take them longer to decide on which color to buy than if they were presented with just three colors. When their attention is divided too often, it becomes harder to focus and make a decision.

Attentional bias is an essential psychological concept every marketer should use to their advantage. The next time you are deciding on an image to use or how to design a flyer, keep this in mind and maximize the effect on your customers.

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Sources:

www.conversion-uplift.co.uk

www.bemoreprof.com

www.neuromarketingservices.com   


Occam’s Razor: Keeping Things Simple

What is Occam’s razor?

The term “Occam’s razor” may sound like a limited-edition, old-school shaver. But it has nothing to do with shaving.”

Occam’s razor is a philosophical principle credited to 14th-century English scholar William of Occam. It states: One should not increase, beyond reason, the number of entities required to explain anything.” 

This statement means that the simplest solution is usually the best if all things are equal. This is a rule of thumb, though, and not something guaranteed to work 100% of the time. In some situations, the simplest solution may not be the right thing to do.

Still, Occam’s razor encourages us that when faced with several possible solutions, we ought to choose the simplest one or the one with the fewest assumptions. This principle sees constant use in science, technology, and marketing. 

How to Apply Occam’s Razor in Business and Marketing

Let’s look at several ways to apply Occam’s razor in business and marketing. 

Simplify your online presence.

The easiest way to apply Occam’s razor to your business is to simplify your online presence by having only one website. Some businesses assume they need a new website every time they launch a new brand or service. But having multiple sites is more costly and complicated to build, host, market, and manage.

Focusing your resources on one website instead of multiple websites is the simplest way to maximize your sales and profits from the website. For example, you have $100 to spend on Google ads for your company. Spending the whole amount on one website will be more effective than spending $20 on each of your multiple sites.

Focus on your minimum viable product (MVP).

Another way to apply Occam’s razor is the Minimum Viable Product (MVP). An MVP is a technique where a new product or service is launched in the market with just enough features to get your customers’ attention. Before releasing it to the public, you don’t need to wait until your product has all the bells and whistles you eventually want. 

Again, Occam’s razor means the simpler, the better. Releasing an MVP will help you discover what features your customers want and need. You might spend more resources than necessary on features your customers don’t even want. Don’t spend $10,000 on something you can create with $1,000.

Staying simple means fewer mistakes.

When you keep things simple and eliminate unnecessary product features, you also reduce the possibility of mistakes and defects. Think of a watch that tells time versus a watch that tells the time, date, weight, heart rate, today’s weather, and more. The watch that tells time is easier to use and will last you many more years than the watch with dozens of features.

A simple watch might not be as cool or high-tech. But it does its job, and it does its job well. Ten years from now, your time-only watch will still tell time, while the other watch will probably no longer be in use.

Always end with a simple CTA for your customers.

Mcdonald’s created the now-famous “Would you like fries with that?” phrase. By adding this simple sentence to the end of each transaction, they encouraged thousands, maybe millions, of customers to add fries to their orders. In doing so, they could increase each basket size, upsell customers, and add to their profit.

A simple, clear, and consistent call-to-action (CTA) at the end of your social media copy or blog posts can do the same for your business. For example, if you want your social media post to direct traffic to your blog, you can end your post with “To read more about… visit our website.” This simple CTA will nudge your readers to click the link and read your blog.

These are a few examples of applying Occam’s razor to your business. Do you have other ideas for simplifying your product, service, or process to achieve the best outcome? Please share in the comments!

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Sources:

www.forbes.com 

www.fourweeksmba.com 

www.indez.com 

www.leancxscore.com 


What is Loss Aversion?

Let’s talk about loss aversion, why the pain of loss results in irrational decisions, and how marketers are taking advantage of this.

Loss aversion is perfectly summed up by FOMO or the Fear of Missing Out.

It’s the irrational fear of loss. In psychology, loss aversion explains why people, too often, focus on setbacks instead of gains—it explains why the pain of losing is seen to be more powerful than the pleasure of gaining something. In their Prospect Theory study, Daniel Kahneman and Amos Tversky said, “losses loom larger than gains.”

About twice as large!

What makes loss aversion so influential?

Simply put, we hate loss. Receiving something is great, sure—but we don’t love it as much as we hate losing.

If you received a $200 jacket for your birthday, you’d be happy. However, if your dog chewed a giant hole in it the next day, the unhappiness you’d feel would be twice as powerful.  

Losing something or downgrading is psychologically distressing, so we do what we can to avoid it (even if it makes absolutely no sense).

It’s not completely our fault, though. There are intense cultural, socioeconomic, and neurological factors at play when it comes to the power of loss aversion.

Loss triggers a reaction from the same part of the brain that processes fear and risk. Our brains also associate loss with prediction errors and disgust. We’re trained to detest loss.  

We’re extremely vulnerable to loss aversion when it comes to making decisions because as soon as we imagine a choice, we’re emotionally invested and attached.  

People will go to incredible lengths to avoid a perceived loss.

Example: waiting in absurdly long lines to get something for free.

In December of last year, Starbucks created a holiday-themed travel mug that you would get for free if you ordered a Grande holiday beverage. They claimed they would keep the promo going until they ran out of mugs. Nobody knew how many they had on hand, so there were lines around blocks at Starbucks stores across the country. It didn’t matter that the travel mug was valued at less than $5 and made from thin plastic. They had already latched on to the idea of getting a free holiday treat, so not receiving that mug would be considered a significant loss.

People are also likely to make purchases they weren’t necessarily planning on making if you provide them with a free shipping coupon. They’ll recognize that this opportunity doesn’t come along all time, and the thought of losing out on it will persuade them to make a purchase.  

Businesses use loss aversion marketing strategies all the time.

A perfectly executed “flash deal” is a big moneymaker. When a product is deeply discounted for a very limited time, the consumer’s brain focuses on the ticking timer and the amount of savings rather than on the product itself. You probably don’t need another sweater or another cordless vacuum cleaner—but at 70% off, that’s a GREAT deal, right? I can’t miss out on that!

It’s also why pre-orders, coupons, and VIP exclusives work. With pre-orders, it’s an early bird discount—the discount is the prize for ordering early. With coupons, it’s a lot like being given free money. Why would anyone throw free money away, right? With VIP exclusives, all you needed to get VIP status was probably to sign up for a newsletter, and voila! It’s too easy. Why risk missing out on the action?

Free trial periods show people exactly what their life would look like with the product or service, making it exponentially harder for them to end it when the trial is over. They’ve experienced the benefits and identified with that life, so they don’t want to lose it.  

Insurance companies usually have a mile-long list of extremely unfortunate things that could happen to you and how you’ll be negatively affected if you don’t have the proper coverage. No matter how unlikely these events are, they’ve successfully set you up to view them as losses, and you’re more likely to focus on those than the regular payments required to avoid them.

If your business needs to avoid giving people more than necessary, loss aversion tactics can help you sidestep that waste. Studies have shown that when options are presented as addable rather than retractable, people will only take what they want (toppings on a salad, ingredients in a sandwich, etc.).

You can maximize the effects of loss aversion marketing in your small business, too.

The success of your offer entirely depends on your messaging.

Understanding your target audience and their fears is crucial to connecting with them. You need to clearly explain what their life would be like if they don’t purchase your product or service, and they won’t care unless you speak directly to their pain points and experiences. It’s about showing them what they’ll miss out on if they don’t participate soon and painting a picture they can’t ignore.

People must believe there’s something to lose for loss aversion to work properly. If you post an offer for 20% off and claim that it’s only available for the next two days and then post a 25% off coupon the following week, you’ve given people a reason put off making their decision. Even worse, they’ll notice that you contradicted yourself, and any trust they had in you and your brand will start to fade.  

You’re working hard to convert all the “I’ll just buy it tomorrow” shoppers into “I feel good about committing to this now” shoppers. Keep that goal in mind, and you’ll notice a positive trend in your conversion rates.

How about you? How do you leverage on loss aversion? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://www.psychologytoday.com/us/blog/science-choice/201803/what-is-loss-aversion

https://www.activecampaign.com/blog/loss-aversion-marketing

https://thedecisionlab.com/biases/loss-aversion/


Have You Heard of Scarcity Marketing?

Scarcity marketing plays on the cultural trope that most people want what they can’t have. It’s not a new phenomenon—it is based on decades of psychological research and not to mention a basic economic principle.

In economics, the law of supply and demand dictates that a low supply makes something more valuable in terms of price, all things equal. It’s one of the reasons why anything that’s limited edition will be pricey.

But what makes a limited edition so attractive and in-demand?

There are many other psychological principles in play here. Some people are collectors and are motivated to purchase anything that’s limited edition. There’s also the need to be distinct from others—getting your hands on a limited edition somehow grants you bragging rights. Then there’s herd behavior—when you see other people want something, you’ll start liking it, too.

Cue #FOMO or the fear of missing out. Millennial consumers were asked if they would buy something after experiencing FOMO, and 68% of them said yes – they’d even make the purchase within a day or two.

The bottom line is that scarcity creates demand. Scarcity also creates urgency. Demand and urgency lead people to buy NOW.

The pull toward things we can’t have develops at an extremely young age.

Jack Brehm shared his findings in his book, Theory of Psychological Reactance. For his experiment, he placed two of the same toddler toys in a room. He put plexiglass around one of the toys and let the other sit out in the open. By this point, you shouldn’t be surprised that toddlers were more interested in the one with the barrier.

What are popular and compelling examples of the use of scarcity by companies?

Amazon makes it known if a product is running low in stock. Some e-commerce sites will even send you notifications if a product is selling out quickly. Whether you were almost convinced to buy the product or not, it’s suddenly a lot more desirable. When you’re taking your time to decide on a purchase, you’re passively picturing your life with the product. As soon as you know that it’s almost gone, you’re forced to quickly and intensely imagine what your life would be like if you missed out on this product. The thought of losing this chance is likely enough to make you commit.

Booking.com and Agoda.com will alert you if someone has booked the room you’ve been eyeing. They’ll also let you know how many other people are currently looking at the room you’re considering, putting the pressure on you to book it before they do.

Door Dash and other food delivery companies will send members a coupon for a specific dollar amount off an order and only make it usable for the next week. If you were on the fence about getting food delivered in the next week, chances are you’re at least going to look at the options now. But who are you kidding – you’re definitely going to order dinner from that new Thai restaurant everyone’s been talking about.

Seasonal products or limited-time items are also compelling examples of the use of scarcity in marketing. Those Starbucks fall and holiday drinks? Those are made with the scarcity principle in mind. It must work because nearly every industry has adopted a seasonal offering of some sort. Pumpkin spice deodorant, anyone?

Studies also show that the average ticket price when buying a seasonal drink is higher than buying a regular drink. Seasonal beverages are seen as special and indulgent, so people are more likely to treat themselves to another menu item while they’re at it. Holiday self-care at its finest!

Some brands use limited-time freebies to encourage purchases. Lego will release limited edition polybags and other collectibles to entice collectors to purchase on particular dates, like May the 4th for Star Wars builds. Starbucks created a limited-edition holiday travel mug that shoppers got for free when they ordered a holiday beverage, increasing their seasonal sales by even more than usual.

An e-commerce clothing company tested two versions of a product page to see which one would prompt more purchases. They’re each selling the same jacket – the only difference is that one page has an “Order within 3 hours (counting down clock), get next day delivery” message just under the “Add to Cart” button. That offer increased their sales by 226%.

Airbnb lets viewers know when they come across a “Rare Find” – that is, a space that’s so spectacular it’s usually fully booked. Mix in some social proof with that urgency, and you’ve got yourself a sale!

Let’s go over some ways for you to use scarcity marketing in your own business.

Limiting your products’ availability triggers customers to assume that these products must be far better than other ones that are readily available. In our eyes, exclusive means superior. This assumption is so strong that we can assign a quality level to a product simply by noticing its availability. This works for limited bonus products, limited sale items, limited introductory price offers, limited time for free shipping or next-day delivery offers, limited offers through a specific channel (“Order through our app in the next 24 hours for 50% off), etc.

If you consistently run sales and each one is accompanied by a “Final Hours” or “Ends Soon” message, your customers will start to catch on. They’ll notice that your warnings aren’t compelling, and their sense of urgency will disappear.

Strategy and authenticity are the keys to making scarcity marketing work for you.

How about you? How do you leverage scarcity for your business? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://sleeknote.com/blog/scarcity-marketing

https://sumo.com/stories/scarcity-marketing


Do You Know the Power of FREE?

Let’s talk about the power of free stuff. Why does the word FREE have such an emotional pull? What do brands get in return when they give something for free? More importantly, how can you use the power of free to your advantage?

Dan Ariely, author of Predictably Irrational (2008), showed that nothing is more motivating than getting something for free.  

He set up a table with two bowls: a bowl of Lindt Truffles that he sold for 15 cents and another bowl of Hershey’s Kisses for 1 cent. At the end of the experiment, he found that 73% of the students chose Lindt over Hershey’s. It seemed like students preferred Lindt over Hershey’s even if the cost was 15X higher.

Next, he set up two bowls again, this time selling Lindt Truffles for 14 cents while the Hershey’s Kisses were free. Guess what? 69% of the students chose Hershey’s this time.

This is the power of free or the zero-price effect, and it threatens to turn traditional cost-benefit models on their heads. These models don’t account for the fact that getting something for free has a psychological effect that trumps conventional economic theory.  

Enter behavioral economics: the umbrella term under which the power of free falls. This covers the study of economic decision-making through emotional, cognitive, psychological, social, and cultural factors.  

Why is FREE so powerful?

It’s not just a price indicator but an emotional trigger.

We tend to make decisions based on how they make us feel. Free things make us happy, and we’ll make decisions that make us happy. It sounds simple, but a decision made in the name of a free thing is often irrational.  

That’s largely due to perceived value. We place an unreasonably high value on free things merely because they’re FREE. It’s an option with no downside. There’s no risk involved. We have everything to gain and absolutely nothing to lose.  

We’ve all taken promotional shirts, pens, stickers, koozies, frisbees, bottle openers, keychains, and water bottles from companies we don’t even care about. Do we need them? No. But we felt a pull toward them – saying no didn’t feel like an option.

Surprise! It’s because they were free.  

Let’s look at an even stronger pull: free food. It’s nearly impossible to turn down free food. It doesn’t even matter if we’ve just eaten, are saving our appetite for something later, or aren’t that crazy about the food being offered. If it’s free and right in front of us, we’re likely to take it.

Most of us don’t consider time or even extra money to be lost when exchanging them for a free item or service.  

That’s why we’ll happily wait in a line for multiple hours if Starbucks is offering a free drink when, instead, we could stop by the next day, pay less than $10 for the same drink and be on our way in a matter of seconds.  

Another example is paying for additional products that we don’t need to receive free shipping. We could run out of shampoo and go to Ulta’s website to buy a new bottle but end up buying 4 because we didn’t want to pay for shipping. The shipping cost would be much less than those extra three bottles of shampoo, but we want it to be free.  

Paying for shipping feels like a waste, but paying for more products to get free shipping feels like a deal. It makes us feel like we’ve worked the system and are coming out on top.

While it may seem beneficial for companies to have free shipping minimums so that we’ll buy more to reach it, studies have shown that we’ll buy more things more often if free shipping is a constant offer.

When Amazon first started offering free shipping, they implemented it everywhere except for France but still lowered France’s shipping cost to 20 cents. Sales across the globe increased dramatically, but the sales in France stayed the same. After a while, they announced free shipping in France as well. Their sales there quickly climbed to match those of the rest of the world.  

Twenty-cent shipping wasn’t even close enough to free to be worth it to consumers.   

Lots of companies have figured out how to use the power of free to their advantage.

Various restaurants and retailers will send out freebies to people who have downloaded and made an account on their app.

Their FREE app.

They figure that you’ll come in to get your freebie and end up buying more while you’re at it. They got you into their store when you weren’t necessarily planning on it and made a sale, proving that freebie more than worth it to them.

Many restaurants also utilize a buy-one-get-one-free strategy to get us to come in and spend money. You’re excited to go in and share a discounted meal with a friend, riding the high of the free offer. The benefit for the restaurant is that you’re likely to buy more than what the coupon is for, such as drinks, appetizers, desserts, etc.  

A slightly different approach is giving away something for free that will, in turn, create a demand for something costly. Cell phone companies do this by bringing in customers with a free phone offer and then charging them for the necessary plan.  

The original user of this tactic was the founder of Gillette Razors and Blades. He was having trouble selling his disposable razor blades, so he started giving away the razor for free in various marketing partnerships with other brands. This created the demand for disposable razor blades and is what ultimately got his sales off the ground.

Increasing digital capabilities has had a significant impact on the ability to distribute free things.

Distributing free things online has little to no cost and gives businesses the freedom to reach people they would otherwise be struggling to connect with. 

This is one of the best ways for small businesses to utilize the power of free. 

Whether it’s a webinar, podcast, workshop, newsletter, or blog, small businesses can give away free things online that will gain them mass exposure at little to no cost while establishing themselves as an expert in their field.  

Especially this past year, as even more aspects of running a business have moved online, small businesses are offering free consultations. If they invest a small bit of time into sharing their expertise with a potential customer, that customer is likely to come back to them when they need a paid service.  

The key to gaining a return on these types of freebies is to provide value. 

While the FREE label will pique interest, small businesses aren’t going to gain loyal followers unless they provide a reason for them to stay.  

First, understand your ideal target audience.  

Then put yourself in their shoes and identify the type of content they would want or be interested in.  

What are their frustrations? What do they face day-to-day? Moreover, what are their aspirations?

Create your freebie around what would be useful to them and deliver a value-packed gift they can’t walk away from. Make it so beneficial to them that you and your business will occupy a part of their memory from that point on. 

Small businesses also create positivity in these difficult times by offering their free thing as a celebration.

What do people want on National Margarita Day? A free margarita! Perhaps with the purchase of an entrée.  

National Pi Day brings a flock of hungry shoppers to the internet, hoping to find deals on pizza and bakery pies. This is an excellent opportunity for a buy-one-get-one-free deal to increase business at your restaurant.

Free birthday items are another celebratory way to make someone feel special and get them into your shop.

Will some of us only pick up our free birthday treat? Yes. Will a good number of us buy other things while we’re there? Definitely.

Adding on a free item to something that has already been purchased is also an effective way to gain returning customers.

Going back to the fact that free things make us happy, you have associated yourself with that happiness. You gave us a gift that we didn’t ask for, and you made us happy.  

The other side to that strategy is that your freebie may be something that we’ve never heard of or used before. You’ve just opened our minds to a new product, increasing the chances that we’ll come back to make a purchase.  

The power of free isn’t something that should be overlooked.

There’s more than enough proof that this psychological wonder affects people everywhere.

However, it’s essential to take away that this marketing strategy shouldn’t be used to trick people into spending exorbitant amounts of money.  

Doing good business is about harnessing deep, genuine connections with people, and sneaky gimmicks will not get you there.

The best way to use this gold nugget of human behavior is to understand it, embrace it, and use it in the most ethical way possible.  

How about you? How are you harnessing the power of free? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/zero-price-effect/

https://avgjoefinance.com/power-of-free/

https://www.forentrepreneurs.com/power-of-free/

https://thedecisionlab.com/insights/business/impact-free-consumer-decision-making/

https://www.wired.com/2008/02/ff-free/


Have You Heard of Nudge Marketing?

How about the term “nudge”?  

We’re going to talk all about nudges: what they are, how they work, and how brands and businesses use them to their advantage.

The term nudge was introduced in the book Nudge (2008), written by two behavioral economists: Cass Sunstein and Richard Thaler. They have defined it as:

“A nudge, as we shall use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.”

Why are nudges effective?

Behavioral economics assumes that people’s choices involve a lot of guesswork. We tend to want to make decisions as quickly and efficiently as possible, but we never want to regret the decision we’ve made.  

A nudge is used to influence people’s behavior by making choice-making easier and seemingly less risky. It provides our brains with a shortcut, and the most we consciously notice is the feeling of being less stressed.

Nobody wants to feel forced or manipulated into making a decision, so subtle nudges with their best interests in mind will automatically make the decision-making process feel natural and smooth.

Let’s look at some of the companies that are making nudges work for them.

Companies selling software systems or anything that requires choosing a plan (Adobe, QuickBooks, Microsoft Office, etc.) will often have a banner highlighting the “Most Popular Plan.” If someone is looking at the options and don’t know what factors to focus on to make the best decision, this identification lets others do it for them.  

There’s a similar powerful persuasion in labeling a display of products as “Staff Picks,” “Editor’s Picks,” or more specifically, “Amazon’s Choice.” People are often put at ease when they see that a product made a good impression on someone else.

Subtly nudging confidence into consumers makes them more likely to make a purchase.

Discount popups are another type of effective nudge. Kate Spade’s website sometimes puts an extra discount on your screen as a popup when it senses that you’ve looked at a particular product multiple times without making a purchase. That extra incentive may be what pushes the shopper to commit.  

We’ve all experienced mind-numbing scrolling when trying to choose something to watch on Netflix or something to order from DoorDash. Sites and apps like these benefit from including a “Featured” list in a prominent place so that when viewers inevitably reach decision paralysis, they’ll have a section with fewer options and a higher perceived value. Making a decision that they’re not likely to regret will seem much easier.  

A strategy used by e-commerce sites is adding functional benefits and personality triggers to the product descriptions on their gallery page. This would be easy for small businesses to implement. Appealing to shoppers directly and as quickly as possible pulls them in, helps them feel seen, and makes their job much faster and easier.  

If you want to subtly change someone’s behavior, you can change the tools they use.

For example, some waste management companies have made recycling bins larger and garbage cans smaller to nudge people toward being more thoughtful about what they throw away. Also, giving people smaller plates at hotel buffets nudges them toward taking less food, ultimately reducing waste.

Not all nudges have a purchase as the end goal.

One of the most famous nudges is the piano stairs at the Odenplan station of the Stockholm Metro. A team transformed the stairs leading out of the station into a giant functioning keyboard. There’s a video showing commuters having fun on the stairs that went viral about a decade ago (Google “piano stairs Stockholm”).

The objective was simple: make more people take the stairs. Did they? Video footage showed that 66% more people than usual chose the stairs over the escalator!

Google has a free food benefit for their employees and found that it was making it harder for people to choose healthy options. To help improve their employees’ eating habits, they made the containers that held the sweets and snack items opaque, moved the salad to the beginning of the buffet line, and placed the sugar-free drinks at eye level in the cooler. Snacking and calorie intake were reduced by roughly 8%.

When strategizing nudges, it’s important to consider the order of the given options. People almost always prefer convenience over rationality, so it’s a great way to persuade them while making them content.

Have some fun with it!

People love friendly competition.

If your business is seeing a decline in tips and you’ve already addressed potential quality and service factors, make a game out of your tip jars. Play on peoples’ strong identification with popular conflicting sports teams and have each jar labeled and decorated for one. Or have a fun yet controversial question posted such as, “Does pineapple belong on pizza?” and have the tip jars labeled as “Yes” and “No”. Nobody is obligated to leave a tip, but it draws attention and gives an emotional incentive.  

There are a few things to consider when planning nudges for your small business.

Nudges must resonate deeply with your target audience, so you need to understand their motivations (values, interests, habits, psychological inclinations). 

If you make your nudge more about increasing your sales and less about benefiting the customer, it’s likely to backfire and decrease trust in you and your business.  

As previously mentioned, nudges should never be misleading or meant to trick people. They’ll know if they’re being pressured or manipulated, so it’s best to keep things transparent.  

If you focus on your audience’s true needs and plan your nudge marketing to ease their stress, this tactic could help you build the strong relationships needed to maintain a thriving business.

Do you have any nudge examples that you use for your business? Got a question? Don’t forget to COMMENT below and SHARE your thoughts!

Sources:

https://blog.crobox.com/article/behavioral-economics-marketing?_ga=2.173434656.2000106776.1555316919-124876615.1554128205

https://blog.crobox.com/article/nudge-marketing

https://www.convertize.com/what-is-nudge-marketing/

https://www.veeqo.com/us/blog/nudge-marketing

https://medium.com/swlh/the-7-most-creative-examples-of-habit-changing-nudges-7873ca1fff4a


Have You Experienced Choice Overload?

We’re going to talk about choice overload, why offering too many choices to customers is a bad thing, and what you should do instead.

Businessman and futurist Alvin Toffler first introduced the concept of choice overload in his book Future Shock (1970). The premise is that living in the post-industrial age (translate: TODAY!) means that we are faced with many choices—far more choices than even two decades ago.

How do we make choices?

Psychology professor Barry Schwartz summarizes the framework of decision-making in his book, The Paradox of Choice:

1) Identify your goals

2) Assess the significance of each goal

3) Organize the options according to how well they meet each goal

4) Figure out how likely each of the options is to meet your goals

5) Choose the best option

There are two types of decision-makers: Those who spend some time considering their options and are satisfied when something mostly meets their criteria, and those who can’t choose something until they’ve deeply examined every possibility in existence. 

Offering lots of options may not be the best idea.

Freedom of choice is a good thing, right? But having too many overloads our brain and paralyzes us from making a decision.

Columbia University conducted a study where a research team set up a booth of jam samples. Every few hours, they would switch from a selection of 24 jams to a group of six. When there were 24 jams, 60% of customers would stop to get a sample, while 3% would buy a jar. When there were six jams on display, only 40% stopped, but 30% bought jam. Lots of options attracted customers to browse, but fewer choices got them to buy.

The more options we’re faced with, the more likely we are to experience unhappiness, decision fatigue, decision paralysis (avoiding making a decision altogether), anxiousness, regret, and decreased satisfaction with the option they do choose.

As Schwartz explains, “The existence of multiple alternatives makes it easy for us to imagine alternatives that don’t exist — alternatives that combine the attractive features of the ones that do exist. And to the extent that we engage our imaginations in this way, we will be even less satisfied with the alternative we end up choosing. So, once again, a greater variety of choices actually makes us feel worse.”

How do companies manage choice overload?

Target makes it easy by carefully curating the wares on their shelves. They have thousands upon thousands of amazing products, but they don’t offer them up to you all at once. There are carefully selected spots, and they don’t fill racks to the brim because that’s visually overwhelming. There are probably one or two styles of clothing on a single rack. Their displays are designed to draw customers in and to encourage them to pick up and inspect the product. There’s always just enough product to pique interest and make you want to see more. Ever wonder why a Target run can take so long?

Proctor and Gamble found that when they decreased the number of Head & Shoulders shampoo varieties available to purchase, revenue increased by 10%. It can be hard to differentiate between very similar niche products, so taking away some of the options made the remaining ones easier to compare.

Squarespace has four plans to choose from on its website. Each subscription plan’s features can be complicated to weigh, so they made a chart that compares what you get with each subscription option. It’s pleasing to look at and simple to read, making the deciding process a lot more bearable. 

Companies like jewelry stores and car dealerships often have a comparison tool on their websites that lets you select your top three choices, see them next to each other, and closely examine their features and benefits. This process is much more user-friendly than making your customers go back and forth between web pages. 

Netflix has an option that pops up after it detects that you’ve been scrolling for a while that offers to choose a show for you. They do their best to categorize their material so you can narrow down what you want to watch, but we all know the difficulty of making that final commitment. 

AirBnB’s website gives you multiple chances to narrow your search by choosing preferred features in small batches, ensuring that you’re only presented with options that are the best fit for your needs. 

On DoorDash’s website, the first thing you see is a section of featured restaurants. Suppose scrolling through every restaurant available is overwhelming for you. In that case, this collection makes deciding easier because the agonizing work of determining which places are above average has already been done for you. When you choose a restaurant, they start by listing the featured and most popular items so that you don’t need to sift through the entire menu if you don’t want to.

What should small businesses be doing?

Remember that giving lots of options comes with good intentions, but it can backfire on your business. You don’t want to scare off potential customers by overwhelming them. Plus, you don’t want your brand to be associated with stressful feelings from choice overload. 

The best thing you can do to ease the anxiety of decision-making for your audience is to offer only the necessary number of options and make it as easy as possible to compare their features. Keep the design simple and highlight specific benefits that would appeal to your customers.

As a consumer yourself, you know and understand what your customers go through when faced with too many choices. Empathize with their distress and show your compassion through your messaging and marketing. Your efforts will not go unnoticed!

How about you? How do you make choice-making easy for your customers? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://thedecisionlab.com/biases/choice-overload-bias/

https://blog.crobox.com/article/choice-overload

https://medium.com/choice-hacking/choice-overload-why-simplicity-is-the-key-to-winning-customers-2f8e239eaba6


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