Buyers like to take their time when making a buying decision, but limited-time offers can speed up the process, but how?
Buyers need to trust an ecommerce vendor before they will buy from them, it is a fundamental trust-building exercise that takes time.
There are however numerous physiological effects that ecommerce vendors can leverage to speed up the buying process, including limited-time offers.
These biases and physiological effects, listed below influence emotion and decision making, tricks that bypass these buying decision impulse controls.
They are all centered around building a sense of excitement and urgency around the purchasing decision but also enabling the visitor to avoid the perceived pain points of the purchase, and it can all be done in addition to the use of limited-time offers.
Limited time offers when used in combination with other less powerful cognitive biases can help you to create the ultimate limited time offer.
Below you will find many of the biases and effects you should be leveraging in your ecommerce marketing. Before going into the details, a foreword on anticipation.
Your pre-sale promotion is key to making a successful sales event.
Simply because a person’s expectations of a sales event influence how we actually perceive and feel about the event (selective perception). What this means is that if your customer thinks your sales event will be a great event, then, it is more likely to be a great experience for them.
The saying “perception is in the eye of the beholder” is all too true here.
Your email and Facebook marketing must make the upcoming sales campaign omnipresent and sound amazing, drip feeding content with fantastic offers to your newsletter list is an important first step.
The goal of your pre-event marketing should be to build anticipation of the event
Your promotional material must be designed for sharing on social media and highlight a limited-time offer, the aim is to start a snowball effect and a bandwagon effect.
This is how your campaign can go viral.
Incentivize sharing by offering a limited-time discount coupon for both the sharer as well as for the referred individual. The goal is to get them and their friends to your website, where you can stoke anticipation even further through onsite retargeting.
Personalization is key, knowing what each visitor is interested in so that you can provide the right sales offer to grab their attention while onsite. Collecting and understanding psychographic data is essential to improving your website conversion rate.
In addition to displaying the right limited-time offers, a countdown timer to the sales event provides a great way to increase anticipation. Here the trick is to use pictures or video of store sales, showing a busy shopping scene or perhaps waiting in a sales queue before the store doors even open, regardless of whether you have a physical store or not.
The terminology used in your promotional messages can inspire a sense of anticipation and competition, think of the build-up to a live competitive sports event, it’s exciting! The same can be said for a sales event if done right.
While supplies last is my favorite magnet link here since it implies limited supply and therefore suggests time-limited, and highlights that there is competition for the available items.
Trust building through reciprocity
In sales campaigns, the concept of reciprocity is based on the simple notion that you can’t get something of value for anything. It is a bargain of sorts, typically the website visitor supplies their details in exchange for a special offer or an ebook, a FB like, or FB share.
It can be anything but it is usually some kind of digital informational product that has an initial upfront cost to produce but thereafter costs nothing to distribute to any number of people.
Its value for website owners is that more often than not, neither a person’s name nor email are considered something of great value and so the user sees the offer as getting something for free.
Regardless of this fact, it is a bargain struck to which both sides have committed to an unspoken agreement and is therefore is a trust-building exercise of great value.
About micro conversions
One goal for any ecommerce website is to have a series of such micro conversions at every stage of the conversion funnel, each one of these is typically set as a transition point from one conversion funnel stage to the next.
Each microconversion should require a little more than the previous one, this is usually additional data about the customer, psychographic data that enables further personalization of future communication. This can be achieved through a customer journey map, a conversion funnel and well timed onsite retargeting all ultimately leading the user to a buying decision for your product or service.
Every microconversion is a choice taken, which has another psychological effect that ecommerce stores can leverage. Choice-supportive bias.
When you choose something there is a tendency to feel positive about it, no matter what it might be. Nobody ever likes to think or even consider that they made a bad decision or a bad purchase because we avoid confronting painful thoughts about oneself.
Consequently, even if there is obvious downsides to the decision made, you are more likely to overlook these issues.
Micro conversions leverage this powerful choice-supportive bias, but so do other effects, including the next one.
We all tend to judge a decision based on the outcome of the decision made, and so in addition to the choice supportive bias mentioned above, – which is already impacting on the rational analysis of the decision, the outcome bias helps to hide the flaws in the decision making process.
One example of this is that just because a user got a great ebook, does not make it a good decision to give their details away in exchange for the ebook. Users are more likely to blame themselves for giving their data out than you for asking for it.
Loss aversion and the endowment effect
We all make extraordinary efforts to avoid a potential loss, a buying situation is no different. With respect to ecommerce, the avoidance of potential loss provides sellers an important consumer behavior to leverage.
By creating a limited-time offer whereby the user will lose something that is perceived as great value if they don’t take action to secure it.
Firstly, the ecommerce website must provide something of perceived value, this is typically a juicy discount offer, – the proverbial carrot to the customer horse. Then we must add the potential of loss. This is achieved by making the offer or discount available only for a limited time. The potential loss of that special offer is a powerful incentive, that if done right will trigger buying emotions and affect behavior in your favor.
In addition, simple logic dictates that adding in an additional discount if action is taken quickly, will have an even greater effect, that an opportunity you have now will be lost if action is not taken today, or NOW. Here a countdown timer is a powerful method of eliciting the potential loss emotions.
Instill a sense of competition
To add fuel to the buying urge fire, add in a sense of competition to the mix. By doing so, you can further ratchet up the fear of loss, speeding up the buying process by increasing the buyers motivation, this can been seen during a while stocks last campaign or a closing down sale, both have a similar effect. It is the idea that everyone will be jumping on this amazing offer, this once in a lifetime sale.
This is an important effect to leverage because this fear is not seen as caused by you the vendor, but rather the other shoppers, – they are the ones that need to be beaten to the purchase. Ecommerce platform plugins provide a means to increase the feeling of competition by providing real time updates about others who are buying.
The Ostrich Effect
The Osrich effect is probably the most well known of psychological effects that affect reasoning so I will dispense with the detailed explanation and go to an example of its use.
Over 80% of people do not read the terms and conditions, even though we all know that we should.
We could not read them all, even if we wanted to considering the number of websites most of us view each day.
One key reason why we don’t read the terms and conditions is because we know it contains a lot of information we won’t like and so we put our heads in the sand like an ostrich and ignore the potential risk. Your visitors will do anything to avoid the pain of reading it.
You can heighten this psychological effect, by focusing the users attention where you want it, on a great offer on another part of the screen, giving them something they want to read instead of letting them dwell on something they don’t want to read. Which leads me succinctly to my next cognitive bias.
People over rely on the first piece of information they see when a website loads, which is precisely why the home page is so important, and more precisely, within the home page, the above the fold message is so critical. Your ATF message, magnet link and CTA, or perhaps a special offer message overlay or header banner.
Confirmation Bias, Conservatism Bias and Salience
These three cognitive biases make a potent mix. They will be handled together because they often occur together and are difficult to tell apart.
Confirmation bias is where we tend to listen only to information that confirms our pre-conceptions. Add in conservatism bias which is where / when people favor prior evidence over new evidence, (which is one key reason why we are so slow to accept change). This provides a way to target older people who are set in their ways, patterns of thought and behavior.
Salience is the name for our tendency to focus on the most easily recognizable features of a person or concept, which is why it’s best to keep things simple when trying to explain stuff on a website. Why these all matter is that as we age and memories deteriorate we become more conservative, less receptive to new information. The consequence is that different age groups should often be targeted in different ways for optimal results.
How you target different age groups must take these psychological effects into consideration.
Confusingly there is also something called the “recency effect”, which sounds like the opposite of conservatism bias, whereby the latest information is valued more heavily than older data, however this is also a result of how we build our memories (short term memory).
For example, during a game of memory, when given a long list of items to remember and then tested, we remember the beginning and the most recently remembered items at the end but we tend to forget stuff in the middle.
Loss aversion is a primeval part of humanity, written in our DNA by survival and evolution. The concept of “get it while you can”, was literally words to live or die by in the past, and still today, in many parts of the world.
Today, in the western world “get it while you can” translates into “get it while stocks last” and it is for this instinctive need to satisfy these feelings that it has the most powerful effect on our buying decisions. The stakes are obviously not so high as life and death for most people but it still has a powerful effect on our behavior. Limited time offers tap into the part of the brain that deal with this primeval fear of losing out, triggering emotions that many of us rarely have need of. For ecommerce websites it is an obvious, even essential target, necessary for conversion rate optimization. When combined with the other cognitive biases listed above, and using a ecommerce strategy using limited time offers is a zero risk strategy that guarantees increased sales.
In order to leverage the above mentioned psychological effects an onsite retargeting tool such as OptiMonk is necessary, enabling the collection of psychographic data and the precise real time delivery of personalized messages throughout the conversion funnel.