Articles Tagged with: Digital Marketing

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

What Do You Know About Social Proof?

Let’s talk about the power of social proof: why it’s important, how businesses are using it, and how you can start using it to your advantage too.

Business psychology professor Robert Cialdini coined the term “social proof” in his book Influence (1984). The concept of social proof is simple: When we don’t have enough information about something, we base our decisions on how others decide and act.

We follow the masses and feel most comfortable conforming to a group decision.

Psychologist Solomon Asch conducted a conformity experiment in 1951. Eight male college students (participants) were put in a group with two other people (influencers) who were secretly in on the experiment. Each group was shown an image of a line and then another image with three different lines. They were asked to choose which of those three lines matched the first line. The influencers always gave their answers before the participant. In 12 of the 18 trials, the influencers gave wrong answers, even though the correct answer was obvious. On the other hand, 75% of the participants gave the wrong answer as well. In the other six trials where the influencers gave the correct answer, the participant gave the wrong answer less than 1% of the time.

Asch determined that these participants followed the consensus because they wanted to fit in with the group. Some even believed that the group was better informed than they were.

Why is it essential for businesses to pay attention to the power of social proof?

Think about how we decide on which smartphone to buy. Most of us will do the research. Some will take a careful look at the specs. But not everyone will have the tech know-how to understand everything. So, we look to other people to fill in the gaps for us, such as family and friends.

If it’s a new product, you’ll probably join a forum or tech group to ask around, see what people know about it. You’ll also probably scour YouTube for review videos from the tech experts—AKA tech influencers. If they say that it’s a good product, you’ll be more likely to buy it when you get the chance.

This is why many brands work with influencers, who create content and review products. In doing so, they prime the mass market and influence them to buy the product when it gets released.

We tend to trust well-known people who have earned our confidence more than actual brands.

Let’s talk examples.

Ever wonder why restaurants have such small waiting areas inside the building? They want you to have to wait outside where people will see you. If you drive by a restaurant that has a large group of people waiting in front of it, you’re going to take a mental note that this restaurant must be fantastic. So, you’re more likely to come back to it. It’s hard to be impressed by an empty restaurant because our instinct is to assume that it must not be any good if nobody is there.

Another aspect of social proof is our want to be a part of a community. Canva plays on this with their sign-up landing page. It says, “Join over 10 million people designing on Canva.” This call to action is especially effective because it’s framed as an invitation rather than a statement. Sure, having 10 million customers is notable. However, people will want to sign up because they can join that large number of users and become part of their community.

Subaru has included a “Reviews and Awards” page on their website that shows potential buyers they’ve gone above and beyond the industry standard and have been recognized by institutions that matter. They also have a “Dear Subaru: Owner Stories” page set up like a collage. This personal touch lets customers see real people who have had wonderful experiences with Subaru.

There are stores and country clubs that use the idea of exclusivity as social proof. Whether they need a waitlist or not, they’ll use one to give the impression that their establishment is so popular and extraordinary that they must limit access.

Social proof is one of the most accessible marketing tools for small businesses.

You can utilize customer reviews in nearly every type of marketing collateral. Social media posts, blogs, sales pages, product descriptions, landing pages, and more can all immensely benefit from the addition of positive customer reviews.

People tend to check 2-3 review sites, like Yelp and Google, before deciding about a brand, so it’s best practice to get positive reviews on as many different sites as possible.

What’s even more powerful than reviews? Testimonials. These show the big picture, a whole experience rather than simply stating that a product worked. The key to great testimonials is value. The best ones address common objections and overcome them, giving viewers confidence in the product or service.

We trust authentic, peer recommendations far more than paid advertisements, so don’t be afraid to reach out to past customers for testimonials. You can create a short survey for them to take, ensuring that you get the exact information you need.

If you want to work with an influencer or a celebrity to promote your brand, finding the right match is crucial. The person you team up with will only help your conversions if your audience knows them, likes them, and trusts them. You’ll be out a lot of time and money if you choose the wrong fit.

Social media is ground zero for social proof. If you see a customer tagging you on Facebook or Instagram, acknowledge the post and share it on your feed or stories. Encourage your customers to tag you on their social media posts and reward them with engagement.

Remember that people are more likely to buy or do something when they know that other people are doing it, too.

How about you? How are you using social proof in your business? Got a question? Don’t forget to COMMENT below and SHARE your thoughts.

Sources:

https://sproutsocial.com/insights/social-proof/

https://optinmonster.com/11-ways-to-use-social-proof-to-increase-your-conversions/

https://www.subaru.com/index.html

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

Are You Familiar with the Framing Effect?

We’re going to talk about the framing effect, what it is, and how it’s used by savvy brands.

Is the glass half-full or half-empty? Do you like frozen yogurt that is 90% fat-free or one with only 10% fat in it? Would you invest in something with a 10% risk—or are you more willing to invest if it had a 90% chance of earning money?

What is the framing effect?

It is a cognitive bias (aka an error in thinking) that leads us to decide on something based on the connotation presented. If an option bears a negative connotation, like “20% risk of loss” or “20% trans-fat,” you’ll likely decide to stay away from this option. But if it bears a positive connotation, like “80% chance of winning” or “80% fat-free,” you’re more likely to choose this option.

It matters what you say and how you say it. It matters how you frame it.

The study of the framing effect began in 1981 with psychologists Tversky and Kahneman. They ran an experiment where participants had to decide between two treatment plans for 600 people who contracted a fatal disease. Treatment A would end 400 lives, and Treatment B had a 33% chance of ending no lives but a 66% of ending all 600 lives. When framed as saving 200 lives, 72% of participants supported Treatment A. However, when framed as ending 400 lives, only 22% of participants were in favor.

People’s choices are influenced by the way the options are framed.

The information itself is often irrelevant.

We put more focus on how the information is given rather than the information itself.

Behavioral economics has us pegged as irrational decision-makers, remember?

We despise risk and loss, both of which are associated with negative connotations. If you want to sell a product, don’t try to use a characteristic that could be perceived as negative. We’re programmed to avoid loss, so we’ll respond better when positive benefits are highlighted.

Making decisions is hard, so we tend to pull on the most readily available information to help us with the task. Rather than take the time and energy to try and process, evaluate, and understand information, the framing effect gives us a mental shortcut.

It also appeals to our emotions, another huge factor in making choices.

Let’s look at the framing effect in action.

You go to the store to buy hand sanitizer, as one often does during a pandemic. You find two completely identical options. However, one claims to kill 98% of bacteria, while the other claims to only let 2% of bacteria survive. What is the single most important benefit of hand sanitizer? The fact that it kills bacteria. Therefore, you’re going to pick the first one because it highlights the one thing that hand sanitizer should do. You don’t want to be reminded that 2% of bacteria are left to roam around.

It’s nacho night, and you’ve been tasked with the grocery shopping. When you get to the meat section, you choose the package that defines the contents as 75% lean meat. Would you feel as good about buying this meat if it was identified as 25% fat meat? Nope, that sounds a bit gross. Is there a possibility you wouldn’t even buy it and just get more cheese for your nachos instead? Absolutely.

There’s a new show on Netflix that everyone has been talking about, and you want to watch it, but you don’t want to pay $8.99 just to be in on the latest binge-watching trend. One more look at their website couldn’t hurt though, maybe they’re having a promotion. To your surprise, a new number catches your eye: “Just 30 Cents Per Day!”. They must be running some once-in-a-lifetime special! Everything suddenly seems more than worth it, and you start to get excited about all the other shows and movies you’ll have access to as well.

It’s almost tax season, and you’re starting to realize you need some help. You begin researching free finance tracking software and find one that’s recommended by 7 out of 10 professional accountants. If the same software exclaimed that only 3 out of 10 accountants would oppose it, you would keep looking for something with a more positive spin.

Home Depot is having a sale on vacuum cleaners. Which promotion do you think would sell more? A $75 discount on a $500 vacuum cleaner or a 15% discount on the same $500 vacuum cleaner? People are more likely to be attracted to a $75 discount because it sounds like a better deal than a 15% discount—even if it’s the same amount (15% of $500 is $75). Most people don’t like to do math problems anyway—and the brain easily recognizes a large number.

How can small businesses use the framing effect to their advantage?

Delve into your target audience and gather as much information as you can about who they are, what they do, and what they seek. You could theoretically be framing something in a successful way, but if the characteristics presented don’t appeal to your audience, you’re at a loss. There’s a better chance of them buying your product if you frame it with positive attributes, but you need to know which attributes to present to make them care.

As we tend to avoid loss, we actively seek out positivity.

There are countless ways to persuasively guide your customers to make a purchase, just be careful not to cross over into misleading them. Focus on positive influence and pure intentions, and you’ll end up making their lives easier.

So, the next time you’re offering a new product or selling something at a discount, remember that framing is important. Communicate the positives and remember that sometimes, giving a dollar discount is better than a % discount. It’s all about how you frame it.

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://www.digitalalchemy.global/framing-in-marketin/

https://boycewire.com/framing-effect-definition-and-examples/

https://www.crowdcontent.com/blog/2018/04/03/the-framing-effect/

https://thedecisionlab.com/biases/framing-effect/