7 ways to hack the mind of the online shopper: a visual guide for retailers and ecommerce companies

7 Ways to Hack the Mind of the Online

ShopperPresented by:

Jennie Wong, Ph.D.

Why Now

• Ecommerce is eating the economy• Mobile is eating ecommerce• The answer is not in the device, but rather in the

shopper’s mind

Why MeEducation

• Ph.D. from the Annenberg School for Communication at USC at the age of 22

Management Consulting

• Certifications in psychological typing and brain-based behavior change

Entrepreneur

• Owner/operator of Limelight Web Development (custom ecommerce)• CEO and Co-founder of Shopping Quizzes

Mission

• Synthesize the academic research into tools and practices for retailers and beyond7 Ways to Hack the Mind of the Online Shopper

The human brain likes• Fewer, better choices• Easy-to-process visuals• Freedom• Happy mediums

The human brain hates• Overwhelming options• Processing lots of text• Being told what to do• Extremes

The Disclaimer• Every seller, website, product, and shopper is different

• Depending on the seller, website, product, and shopper, some of these principles may not be effective or appropriate

• These cognitive principles should be used to generate specific hypothesis, which should then be rigorously tested

The 7 Ways1. The Paradox of Choice

2. Processing Fluency

3. Just-in-time Information

4. Micro-commitments

5. Simultaneous Choice Presentation

6. The Compromise Effect

7. Reactance Theory7 Ways to Hack the Mind of the Online Shopper

COGNITIVE PRINCIPLE #1:The Paradox of Choice

In a NutshellThe more choices we have, the less likely we are to buy anything.

Also known as:• Analysis Paralysis• Decision Fatigue• Ego Depletion• “System 1” and “System 2” Thinking

Key Experiment: The Jam Study

Ecommerce Application #1:Use Expandable SectionsDON’T:

Show long, scrolling pages of thumbnail images.

Ecommerce Application #1:Use Expandable SectionsDO: Show the most popular options for a segment with the option to “See More.”

Ecommerce Application #2:Avoid Duplicate ThumbnailsDON’T: Show multiple thumbnail images of the same item.

Ecommerce Application #2:Avoid Duplicate ThumbnailsDO: Show that an item is available in multiple colors.

Ecommerce Application #3:Practice Deep Linking

DON’T: When promoting a product segment, DON’T link to the top-level category (e.g., All Bras).

Ecommerce Application #3:Practice Deep Linking

DO: Use the appropriate deep link (e.g., Wireless Bras).

COGNITIVE PRINCIPLE #2:The Paradox of Choice

In a NutshellWhen information is faster and easier to process, we feel happier, like it better, and are more likely to take action.

Also known as:• Brain Cycles• Conceptual Fluency• Processing Speed• Rhyme as Reason Bias

Key Experiment: The Cordless Phone Study

Ecommerce Application #1:Technical Jargon

DON’T use technical terms that your average shopper can’t define.

Ecommerce Application #2:Rhyming and Alliteration

DO use alliterative names and slogans for products and campaigns.

Ecommerce Application #2:Rhyming and Alliteration

DO use rhyming names and slogans for products and campaigns.

Ecommerce Application #3:Speed Sells

• DON’T let shoppers abandon your site due to slow page load times.• DO make sure your page

loads in 2 seconds or less to maximize conversions.

1-2 Seconds:Best

2-3 Seconds:OK

3+ Seconds:Too Slow

COGNITIVE PRINCIPLE #3:Just-In-Time Information

In a NutshellPeople don’t absorb information very well until they have an immediate need for the information.

Also known as:• Flipped classroom• Interactive-engagement• Just In Time theory of user behavior and Just In Time Teaching (JiTT)• Why people don’t read on the web

Key Experiment: The Physics Study

Ecommerce Application #1:Product Category Navigation

DO use visuals to reinforce definitions at the moment of choice or action.

Ecommerce Application #1:Product Category Navigation

DON’T expect your shoppers to read a separate page about differences between product categories.

Ecommerce Application #2:Detailed Product Information and Help

DO provide detailed product info only after the shopper’s curiosity has been aroused.

DO give purchasing help right next to where the information is needed.

Ecommerce Application #3:Conversation Converts

• DO, if possible, offer the option of live, human interaction via chat window. • Many retailers report

boosted conversions and average order value with this technique.

COGNITIVE PRINCIPLE #4:Micro-Commitments

In a NutshellStarting with seemingly small commitments can greatly increase the odds of a larger commitment later.

Also known as:• Commitment and Consistency• Endowment Effect• Foot-in-the-door Technique• Hoop Theory

Key Experiment: The Soap Study

DO build commitment to a first purchase by offering free, value-added content, like a buying guide or how-to video.

Ecommerce Application #2:Carting for Commitment

DO encourage shoppers to add products to their cart.

Ecommerce Application #3:The Micro-Purchase

DO offer the option of low-cost samples.

DO capitalize on commitment momentum from a first purchase with membership benefits.

Ecommerce Application #4:From Customer to Member

COGNITIVE PRINCIPLE #5:Simultaneous Choice Presentation

In a NutshellPeople are more comfortable making a decision and are more satisfied with that decision when their choices are presented simultaneously rather than sequentially.

Also known as:• Choice closure• Maximizing vs. “satisficing”• Option attachment• Quest for the best

Key Experiment: The Chocolate Study

Ecommerce Application #1:Side-by-Side Segment Comparison

DO enable customers to see broad product segments or categories at-a-glance.

Ecommerce Application #2:Side-by-Side Product Comparisons

Within a product category, DO enable customers to see their product options at-a-glance.

Ecommerce Application #3:The Endless Sequence

DON’T present an endless sequence of products.

In this example, even after filtering by “Size 7, Black, and Flats,” there are 734 options, presented in an endless sequence. Not only does this discourage conversions, it also leads to dissatisfaction (and possibly more product returns).

COGNITIVE PRINCIPLE #6:The Compromise Effect

In a NutshellGiven a set of options, people tend to choose the “happy medium.”

Also known as:• Asymmetric dominance effect• Decision field theory• Decoy effect• Extremeness aversion

Key Experiment: The Paper Shredder Study

Ecommerce Application #1:Competitive Positioning

DO position your business between competitors.

Ecommerce Application #2:Explicit Triggers

DO reinforce the compromise effect with explicit triggers.

Ecommerce Application #3:Implicit Triggers

DO implicitly trigger the compromise effect with any “short list” of products.

This technique enables shoppers to impose their own reasoning onto the “short list.” Some may seek the middle price, while others pick the middle skirt length as a compromise between “sexy” and “comfortable.”

COGNITIVE PRINCIPLE #7:Reactance Theory

In a NutshellPeople react negatively to restrictions on their freedom. By the same token, people respond positively to affirmations of their free will and ability to choose.

Also known as:• But You are Free (BYAF) technique• Rebelliousness• Reverse psychology

Key Experiment: The “Change for the Bus” Study

Ecommerce Application #1:Number of Product Recommendations

DON’T trigger reactance with a single product recommendation.

Ecommerce Application #1:Number of Product Recommendations

DO provide a manageable choice set, so shoppers retain a feeling of freedom to choose.

Ecommerce Application #2:Customer Labels

DON’T label your customers with a persona or profile.

What if someone thinks “New Traditional” is an oxymoron, or doesn’t like the word “Eclectic?”

Ecommerce Application #2:Customer Labels

DO consider asking shoppers objective questions about their preferences, for example, “Leather or Fabric?”

Ecommerce Application #3:But You Are Free (To Change Your Mind)

DO affirm shoppers’ ability to change their minds later with a reassuring return policy.

A recent meta-analysis of 21 different studies concluded that leniency in return policies increased purchases more than returns.

Ecommerce Application #4:Using Reactance

DO consider how you can use the “reverse psychology” aspect of reactance to your advantage.

Conclusion – The What vs. The WhyThe What

• There will always be new trends in ecommerce, such as flash sales, chat bots, and subscription boxes

• Some work, some work for a while, and some don’t work at all

The Why

• Through it all, the buyer’s brain remains essentially human• These core cognitive principles are stable, universal, and powerful• And they are the invisible reasons behind what works and what doesn’t

Sell Much and Prosper

Bonus Material

Engaging Questions

Engaging Content

“The 6 Types of Social Media Content That Will Give You the Greatest Value”by Neil Patel, co-founder of Crazy Egg, Hello Bar, QuickSprout

1. Infographics

2. Interactive content (most viral is the quiz)

3. Positively emotional

4. Images

5. Lists

6. Newsworthy

Engaging Subject Lines• In March/April 2016, luxury

accessories retailer Louis Jane sent half of their marketing emails with the word “Quiz” in the subject line, and half without• Over the course of 2 months, the

Scarf Quiz improved their email open rates by 24%

Applications

You can use these engagement principles across all major marketing channels• Email - increase open rates and click throughs• PPC – increase CTR and return on ad spend• Social media - increase likes, click throughs, and shares• Websites – decrease bounce rate, increase time on site

BibliographyPlus ways to learn more

BibliographyCHAPTER 1: THE PARADOX OF CHOICE

Watch The Paradox of Choice TED Talk by Dr. Barry Schwartz.

Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of a good thing? Journal

of Personality and Social Psychology, 79(6), 995–1006. http://doi.org/10.1037/0022-3514.79.6.995

Kahneman, D. (2011). Thinking , Fast and Slow (Abstract). Book. http://doi.org/10.1007/s13398-014-0173-7.2

Schwartz, B. (2004). The tyranny of choice. Scientific American, 290(4), 70–75. http://doi.org/10.1038/scientificamerican0404-70

Tierney, J. (2011). Do You Suffer From Decision Fatigue ? New York Times, 1–11. http://doi.org/10.1037/e638912011-004

Vohs, K. D., Baumeister, R. F., Schmeichel, B. J., Twenge, J. M., Nelson, N. M., & Tice, D. M. (2008). Making choices impairs subsequent self-control: a limited-resource account of decision making, self-regulation, and active initiative.

Journal of Personality and Social Psychology, 94(5), 883–898. http://doi.org/10.1037/0022-3514.94.5.883

BibliographyCHAPTER 2: PROCESSING FLUENCY

Read “How Processing Fluency Impacts Web Marketing” at Moz.com.

Alter, A. L., & Oppenheimer, D. M. (2006). Predicting short-term stock fluctuations by using processing fluency. Proc Natl Acad

Sci U S A, 103(24), 9369–9372. http://doi.org/10.1073/pnas.0601071103

Dooley, R. (2012). Don’t Let a Slow Website Kill Your Bottom Line - Forbes. Retrieved March 31, 2016, from http://www.forbes.com/sites/rogerdooley/2012/12/04/fast-sites/#1248e44410ae

McGlone, M. S., & Tofighbakhsh, J. (2000). Birds of a Feather flock Conjointly (?): Rhyme as Reason in Aphorisms. Psychological Science, 11(5), 424–428. http://doi.org/10.1111/1467-9280.00282

Novemsky, N., Dhar, R., Schwarz, N., & Simonson, I. (2007). Preference Fluency in Choice. Journal of Marketing Research, 44(3), 347–356. http://doi.org/10.1509/jmkr.44.3.347

Reber, R., Schwarz, N., & Winkielman, P. (2004). Processing fluency and aesthetic pleasure: is beauty in the perceiver’s processing experience? w, 8(4), 364–382. http://doi.org/10.1207/s15327957pspr0804_3

BibliographyCHAPTER 3: JUST-IN-TIME INFORMATION

Read “The ‘Just In Time’ Theory of User Behavior,” by Jeff Atwood, co-founder of Stack Overflow, on his blog Coding Horror.

Hake, R. R. (1998a). Interactive-engagement methods in introductory mechanics courses. Journal of Physics Education

Research, 74, Prépublication. http://doi.org/10.1.1.39.1789

Hake, R. R. (1998b). Interactive-engagement versus traditional methods: A six-thousand-student survey of mechanics test data for introductory physics courses. American Journal of Physics, 66(1), 64. http://doi.org/10.1119/1.18809

Lowell Bishop, J., & Verleger, M. (2013). The Flipped Classroom : A Survey of the Research. Proccedings of the Annual

Conference of the American Society for Engineering Education, 6219. http://doi.org/10.1109/FIE.2013.6684807

Novak, G. M. (1999a). Just in time teaching. American Journal of Physics, 67(10), 937. Retrieved from http://link.aip.org/link/?AJP/67/937/1&Agg=doi

Novak, G. M. (1999b). Just-in-time teaching : blending active learning with web technology. Prentice Hall series in educational

innovation.

BibliographyCHAPTER 4: MICRO-COMMITMENTS

Read “The Science of Micro-Commitments: Transform Prospects into Buyers with 5 Small Steps,” by Ryan Levesque, bestselling author of the book w, on the Crazy Egg blog.

Cialdini, R. B. (2007). Influence: The Psychology of Persuasion. Collins (Vol. 55). http://doi.org/10.1146/annurev.ps.56.121004.100003

Forer, B. R. (1949). Forer_The fallacy of personal validation_1949.pdf. The Journal of Abnormal and Social Psychology. http://doi.org/10.1037/h0059240

Freedman, J. L., & Fraser, S. C. (1966). Compliance without pressure: the foot-in-the-door technique. Journal of Personality and Social

Psychology, 4(2), 195–202. http://doi.org/10.1037/h0023552

Morewedge, C. K., & Giblin, C. E. (2015). Explanations of the endowment effect: An integrative review. Trends in Cognitive Sciences. http://doi.org/10.1016/j.tics.2015.04.004

Patel, N. (2013). The Hoop Theory: How Getting Your Visitors to Invest a Little Will Turn Them Into Customers. Retrieved April 14, 2016, from https://www.quicksprout.com/2013/09/23/the-hoop-theory-how-getting-your-visitors-to-invest-a-little-will-turn-them-into-customers/

BibliographyCHAPTER 5: SIMULTANEOUS CHOICE PRESENTATION

Watch “The Decoy Effect,” clip from National Geographic Channel’s Brain Games.

Carmon, Z., Wertenbroch, K., & Zeelenberg, M. (2003). Option Attachment: When Deliberating Makes Choosing Feel like Losing. Journal of Consumer Research, 30(1), 15–29. http://doi.org/10.1086/374701

Gu, Y., Botti, S., & Faro, D. (2013). Turning the Page: The Impact of Choice Closure on Satisfaction. Journal of

Consumer Research, 40(2), 268–283. http://doi.org/10.1086/670252

Mogilner, C., Shiv, B., & Iyengar, S. S. (2013). Eternal Quest for the Best: Sequential (vs. Simultaneous) Option Presentation Undermines Choice Commitment. Journal of Consumer Research, 39(6), 1300–1312. http://doi.org/10.1086/668534

Roets, A., Schwartz, B., & Guan, Y. (2012). The tyranny of choice: A cross-cultural investigation of maximizing-satisficing effects on well-being. Judgment and Decision Making, 7(6), 689–704

BibliographyCHAPTER 6: THE COMPROMISE EFFECT

Read “Appealing to Satisficers,” by Paul Wood, on the White.net digital marketing blog.

Chernev, A. (2004). Extremeness Aversion and Attribute-Balance Effects in Choice. Journal of Consumer Research, 31(2), 249–263. http://doi.org/10.1086/422105

Huber, J., Payne, J. W., & Puto, C. (1982). Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis. Journal of Consumer Research, 9(1), 90. http://doi.org/10.1086/208899

Scheibehenne, B., Rieskamp, J., & González-Vallejod, C. (2009). Cognitive models of choice: Comparing decision field theory to the proportional difference model. Cognitive Science, 33(5), 911–939. http://doi.org/10.1111/j.1551-6709.2009.01034.x

Simonson, I. (1989). Choice Based on Reasons: The Case of Attraction and Compromise Effects. Journal of Consumer Research, 16(2), 158. http://doi.org/10.1086/209205

Simonson, I. (2014). Vices and Virtues of Misguided Replications: The Case of Asymmetric Dominance. Journal of Marketing Research, 51(4), 514–519. http://doi.org/10.1509/jmr.14.0093

Slaughter, J. E., Sinar, E. F., & Highhouse, S. (1999). Decoy Effects and Attribute-Level Inferences. Journal of Applied Psychology, 84, 823–828. http://doi.org/10.1037/0021-9010.84.5.823

BibliographyCHAPTER 7: REACTANCE THEORY

Read “Four Words That Double Persuasion,” by Roger Dooley on his blog.

Bhattacharjee, A., Berger, J., & Menon, G. (2011). Escaping the Crosshairs: Reactance to Identity Marketing. Working Paper, The Wharton School,

University of Pennsylvania, Philadelphia.

Carpenter, C. J. (2013). A Meta-Analysis of the Effectiveness of the “But You Are Free” Compliance-Gaining Technique. Communication Studies, 64(1), 6–17. http://doi.org/10.1080/10510974.2012.727941

Clee, M. a., & Wicklund, R. a. (1980). Consumer Behavior and Psychological Reactance. Journal of Consumer Research, 6(4), 389. http://doi.org/10.1086/208782

Fitzsimons, G. J., & Lehmann, D. R. (2004). Reactance to Recommendations: When Unsolicited Advice Yields Contrary Responses. Marketing

Science, 23(1), 82–94. http://doi.org/10.1287/mksc.1030.0033

Guéguen, N., & Pascual, A. (2000). Evocation of freedom and compliance: The “but you are free of...” technique. Current Research in Social

Psychology, 5(18), 1–7.

Janakiraman, N., Syrdal, H. A., & Freling, R. (2015). The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review. Journal of Retailing. http://doi.org/10.1016/j.jretai.2015.11.002

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