In order to prosper in the world of online sales and conversions, marketers must understand the basic principles of human psychology.
Not confined to being "niche specific", understanding how our brains work can go a long way to helping us understand how we can successfully (and ethically) move people towards saying 'Yes'.
Research into social and consumer psychology has come a long way, and there are a lot of lessons to be learned from these studies that smart marketers can apply right away.
Below I've outlined 10 fascinating psychological research studies that will help you learn how people "tick", as well as how to apply them to increase conversions.

1.) Asking A Little Goes A Long Way... For Conversions

Although at first glance it may appear to be counter-productive, one excellent way to find insights that can increase conversions is to stop focusing on why people say "yes", and zoom in on what makes they say 'no'.
One research study focused on testing the change in charitable donations to the American Cancer Society by adjusting how requests were made in person (door-to-door). The researchers tested between two different request lines:
  1. "Would you be willing to help by giving a donation?"
  2. "Would you be willing to help by giving a donation? Even a penny will help."
A small, subtle change; one might expect a difference, but not a statistically significant one.
Surprisingly though, researchers found that those who were asked the second line were twice as likely to donate to the charity, jumping up to nearly 50% from the 28% response seen from the first line.
The research concluded that people may be hesitant to take action when parameters are not set, in this case, they may have become paralyzed when not giving an "acceptable" minimal amount, and therefore chose not to act at all.
One might think that this request would result in donations of a smaller amount overall, given that people were encouraged to donate "even a penny".
Shockingly, researchers found that there was no difference in the average donation made per contributor, meaning that the second line did not cause people to donate in a lower amount overall.
Lesson learned: Defining ideal parameters (or minimums) can help people break through "action paralysis".

2.) Personalization Makes People Satisfied Customers

Waiters were able to successfully increase their tips by over 23% versus a control by changing a single aspect of their service.
Which aspect do you think it was?
A bigger smile? A "perkier" introduction?
Surprise of the month: it was mints that allowed for such big tip increases.
In a research study published in the Journal for Applied Psychology, researchers tested the conspicuous power of mints to effect the amount of tips that customers left, all other aspects of their service remaining the same.
In the study, three variations were conducted:
  • The first group included waiters/waitresses giving a single mint with the check, and also no mention of the mint itself. This increased tips by around 3% against the control group.
  • The second group changed things up by having the servers bring out two mints by hand (separate from the check). In addition, they mentioned them to the table (ie, "Would anyone like some mints?"). This saw tips increase by ~14% against the control group.
  • The last group had waiters bring out the check first along with a pair of mints. A short time afterward, the waiter came back with another set of mints, and let customers know that they had brought out more mints, in case they wanted another. This last group saw the increase of 23% mentioned above.
What does this tell us about consumer behavior? That they just loooooove mints?
No!
Researchers concluded that it was the personalization aspect that won over patrons hearts (and their wallets).
People enjoyed the follow up much more so than the mints they received: the fact that the waiter came back to see if anyone needed more mints left a positive impression after a critical marketing moment, the initial time after the sale.
The greatest part about this study is that it reveals that nearly anything can be used as a follow up to generate this effect: free training for your product or service, a follow-up guide, an additional module that's not mentioned on the sales page, just follow up post purchase with a small gift and consumers will love you for it.
Lesson learned: Personal follow-ups (especially with small gifts) go a long way to creating happy customers.

3.) Head Starts Lead to "First Place" Loyalty

Have you ever wondered what makes online gaming so addictive?
Gamers are probably already subliminally aware of a few aspects, the acquisition of "points" (in the form of new levels, upgrades, even new experiences) being one of the most influential ones.
In fact, it's been argued that having a "gamer" style personality might make you a good SEO consultant!
As for conversions, point systems have long been used to increase customer loyalty, but are they as optimized as they could be?
Consumer researchers Joseph Nunes and Xaiver Dreze set out to answer this very question, and their results were surprising.
In the now somewhat infamous carwash study, Nunes & Dreze tested the effect of "loyalty cards" by handing out sets of cards (with stamps) that allowed users to get a free car wash after eight or 10 previous washes.
The thing was, they handed out two different types of cards to participants (those sneaky psychologists):
  • One card required the minimal eight stamps to get the free car wash, but had no stamps "pre-checked" (all of the stamps were blank)
  • The second card required 10 minimal purchases, but two of the stamps were already checked off (therefore, in reality, eight washes were still needed to get the free wash)
This seemingly similar stamp system created some surprising results.
The researchers found that only 19% of those with the first card came back enough times to get their free car wash, whereas 34% of those with the second card made it to the free wash (labeled the "head start" group).
That means that by giving folks a 'boost' in their loyalty program (even though comparatively, both cards were the same), researchers were able to nearly double the loyalty of the customers using card two.
The results seem clear: People are more likely to remain with (and complete) loyalty programs if you initially offer them some evidence that they've already made progress towards completing their next goal (throw in a few "bonus points" and the inner-gamer in us all will want to acquire more).
Lesson learned: Loyalty programs are more effective when people can see "instant" progress. This progress makes them more likely to stick with it until completion.

4.) Admitting Your Faults Works When You Highlight Strengths

Can it ever be good to admit when you come up short?
According to research from social psychologist Fiona Lee, it can.
In a study to measure the effect of admitting to faults, Lee and colleagues conducted a test that had participants reading one of two fictitious company reports. Both reports listed reasons why the company had done so “poorly” the past year (remembering that these were fake). The first report had the company listing strategic decisions as the main reason for poor performance. The second report had the company listing exterior events as the main reason for poor performance (economic downturn and increased competition).
The results?
Test subjects viewed the first company far more favorably than the second.
Lee also found (after examining hundreds of these types of statements, over 14 real companies) that companies that admitted to faults also had higher stock prices the following year.
Why?
Lee's conclusion was that admittance to shortcomings in things like strategy showcased that the company was actually in control, despite their faults.
Blaming outside occurrences that couldn't be controlled (even if true) often had the skeptics in the study viewing companies as not having the ability to fix the problem, but also as false or flaky.
Lesson learned: When mistakes can honestly be attributed to strategy or an oversight, admitting to them can lead to more trust if we define exactly what changes are going to be made to fix them.

5.) Urgent Calls-to-Action Only Work When a Solution is Given

Creating copy and sales pitches that come off as "urgent" is one of the oldest marketing tricks in the book.
Additionally, the principle of "scarcity" is deemed to be one of the 6 pillars of influence as mentioned by Robert Cialdini.
I have research that suggests, however, that these messages that invoke a sense of urgency are essentiallyuseless unless there are very specific instructions given as a follow up.
How so?
In a study by Howard Leventhal, participants were tested to see what their reaction (and follow up percentage) would be when given an urgent, fearful message.
The message involved the disastrous effects of the tetanus disease: each participant was given a pamphlet that spared no detail of the results tetanus can have on the body.
As with any good psych study, situations were different for the control and experimental group:
  • The control group received a pamphlet with just the information on the dangers of tetanus.
  • The experimental group received a similar pamphlet, but theirs also included information on where and how to schedule an appointment to get vaccinated.
The results?
Participants who received the second pamphlet (with follow-up info) were much more likely to take action on getting vaccinated, and just as interesting, were more receptive to processing the information on the dangers of tetanus.
This made them not only more engaged, but more likely to "make moves" as well.
The thing is, the info provided in the second packet wasn't all that comprehensive.
This lead to Leventhal concluding that people are susceptible to blocking out information that evokes a sense of urgency if they aren't given instructions on how to specifically deal with it.
Meaning, people were apt to persuade themselves that, "I don't need to worry, this won't affect me," when given information they didn't know how to act on.
Furthermore, people with the follow up info felt better prepared and were therefore much less likely to "put it aside" and out of their heads.
Lesson learned: Evoking a sense of urgency works, but without information on how to act, information paralysis can begin and people will block out the intended message.

6.) Don't Listen to People: They Like Being Labeled!

Most people (especially true in the Western world, particularly among Americans) would say that they enjoy being an "individual", and don't like being labeled.
Yet, research has found, that when nudging people to get involved, most people respond favorably to being labeled.
"It's not just a phase mom!"
This isn't a tactic to persuade teenagers either, in fact, the research study in question analyzed the voting patterns of adults to see if labeling effected their overall turnout.
Setting the stage: After being casually interviewed about their own personal voting patterns, half of the participants were told that they were likely to vote since they had been deemed by the researcher to be more politically active, and the other half weren't told anything.
The catch: Participants who were told that they were more likely to vote were chosen randomly, meaning that they weren't actually more likely to vote, they were just labeled as such.
The result: Those in the group "labeled" as more likely to vote... ended up voting far more often! In fact, on election day, that group had a 15% higher total turnout than the control group, despite the fact that they were selected at random.
It seems that when we are labeled as being a part of a particular sect, our brain seeks to maintain this consistency (even if it didn't exist before!) and therefore causes us to act like those we've been labeled as in order to maintain a consistent personality.
In a nutshell: we like being consistent, and when we're told by someone that we are "a part of ____ group", we are more likely to respond as such.
For conversions, this means you need to evoke a similarity between your future customers and your current customers: ie, "Join over 215,000 of your fellow SEO addicts enthusiasts who get our Moz Top 10 newsletter!" (Rand, my bill is in the mail ;)).
Get people to imagine themselves in a favorable group (people who vote are viewed more favorably by most) and they will take actions to remain a part of that group.
Apparently, it's not always just a phase!
Lesson learned: People will take action in order to maintain a consistent personality when they are "labeled".

7.) "Instant" Gratification Makes People Move

If there is one thing our brain loves, it's getting stimulation immediately.
In fact, the brain loves instant gratification so much, there has been numerous research on determining the results of some people's inability to control against this force, with particular interest in how deferring gratification can help us in achieving success in life.
Powerful stuff!
Fortunately, we're talking about the type of instant rewards that are not only good for our customers, but also good for our conversions.
When deciding whether or not to “commit” to a purchase, customers (or in the case of building an email list, subscribers) are heavily influence by how fast they can increase their “utility”, or how fast they can receive gratification.
In fact, several Magnetic Resonance Imaging (MRI) studies have shown that our frontal cortex is activated when we think about “waiting” for something.
Conversely, our mid-brain gets excited when we think about getting something right away.
You can tap into this knowledge by invoking something instant, even if you aren't selling something digital! (If you are selling something digital, this becomes even easier)
Structure your copy to include words like “instant”, “immediately”, or even just “fast” (for non-digital products) to engage that mid-brain activity that gets us so excited.
If you aren't selling something, using a lead generation freebie (such as a free trial) is a great way to build this psychological aspect right into your site's value proposition and design.
The key is to present these instant solutions as a “fix” to a pain point, as gratification is hastily chased when our mind seeks to resolve an unfavorable problem.
Lesson learned: People respond favorably to "instant gratification" and are more likely to take action when fast rewards are on the horizon.

8.) Chest Pounding About Low Prices Can Decrease Conversions

"The lowest prices in town!"
Works for some businesses, can be absolutely disastrous for others.
In a recent Stanford research study, results concluded that "comparative pricing" isn't always as reliable as marketers think it is.
In fact, asking consumers to internalize their price comparisons can result in them taking the opposite action that you want: they'll buy your competitor's product!
The study goes into depth about the importance of 'implicit' and 'explicit' comparisons when it comes to price:
  • Implicit comparisons occur when a customer takes the initiative to compare two or more products.
  • Conversely, explicit comparisons are those that are specifically stated or brought up by the marketer or advertiser.
To test the results of both, Simonson & Dholakia set up two separate trials.
The first trial involved selling CDs on eBay.
Specifically, the researches listed albums for sale like Pink Floyd's 'The Wall' (I approve!), and then "framed" the listings in two very distinct ways.
The initial listing was always started at $1.99, and it was "flanked" (surrounded by similar listings) by the same album, but the price was set at $0.99 instead.
Similarly, the second trial had the $1.99 album "flanked" by two identical listings, but this time the price was set at $6.99.
Essentially: (flank) $0.99 album <---> $1.99 album <---> $0.99 album (flank) and... (flank) $6.99 album <---> $1.99 album <---> $6.99 album (flank)
The results?
They were conclusive: The CDs flanked with the more expensive options ($6.99) consistently ended up fetching higher prices than the CDs next to the $0.99 offerings.
“We didn’t tell people to make a comparison; they did it on their own,” said Simonson.
“And when people make these kinds of comparisons on their own, they are very influential.”
In the follow up study, researchers outright asked the customers to compare the $1.99 offering with the other two.
Buyers, perhaps surprisingly, became increasingly more risk adverse and more cautious of the offerings and in their likelihood to purchase any CDs:
“The mere fact that we had asked them to make a comparison caused them to fear that they were being tricked in some way,” said Simonson.
The findings show that customers often frame prices in their own minds in relation to the prices of adjacent (or similar) products, meaning it's not always optimal to go "bottom dollar".
Additionally, if you ask explicitly ask customers to compare products, they may react unfavorably to your predictions: as this study showed, it can cause them to take less action overall rather than more.
Lesson learned: Asking customers to compare price on a product cannot always have the intended effect, instead, strategies that evoke an "internal" comparison could be more effective. Instead of focusing on price, perhaps you should...

9.) Sell Customers on Time Benefits, Not Money

Why does a beer company like Miller have a slogan like: "It's Miller time!"
They sell inexpensive beer, so isn't it better to focus on this price advantage?
According to researcher Jennifer Aaker, that would be a terrible choice for a company selling cheap beer.
“Because a person’s experience with a product tends to foster feelings of personal connection with it, referring to time typically leads to more favorable attitudes—and to more purchases.”
It's tough to sell beer based purely on price, the competition is massive and the price differences are largely understood (some people don't mind paying more for "premium" beer, it's an accepted fact that they have to in order to get quality).
How about the memories tied to your favorite inexpensive beer though?
The BBQs, the parties as a college kid, they way a few drinks makes you feel: all memories tied to beer, and all memories Miller hopes to rekindle with their focus on "time enjoyed" rather than "money saved".
Jenn Aaker's study seems to back up this assertion: the experiment set up a simple lemonade stand and used three different signs and measure their impact.
The three signs read as follows:
  1. “Spend a little time and enjoy C&D’s lemonade” (time)
  2. “Spend a little money and enjoy C&D’s lemonade” (money)
  3. “Enjoy C&D’s lemonade” (neutral)
Aaker and her fellow researchers also set the stand up with two six-year-old operators, so it would appear legitimate (I don't know about you, but that's dang adorable!)
Even with this simple lemonade experiment, the results were crystal clear: The sign stressing time attracted twice as many people, many of whom were willing to pay twice as much.
Wow!
In addition to this, another study was set up to test how people's internal valuation of things they already owned were affected by recalling time or money.
To do so, researchers asked college kids about their iPods, specifically one of two questions:
  1. “How much money have you spent on your iPod?”
  2. “How much time have you spent on your iPod?"
Care to guess the outcome?
Students asked about how much time they spent on their iPod were far more favorable in how they later evaluated the enjoyment they got out of their iPod (despite being randomly selected).
The researchers pinpointed what they believed to be the underlying cause of these results:
One explanation is that our relationship with time is much more personal than our relationship with money.
“Ultimately, time is a more scarce resource—once it’s gone, it’s gone—and therefore more meaningful to us,” says Mogilner.
“How we spend our time says so much more about who we are than does how we spend our money.”
So, sell customers on time and enjoyment from a purchase, because unless you're running a luxury brand like Ferrari (where customers do respond favorably to recalling price), you could be evoking less than positive reactions.
Lesson learned: People often value their time more than money, emphasis on time spent or time saved can be a better value proposition than the money they might save.

10.) If You Give Too Much, You'll Get Less in Return

If people don’t know where to go, they will always find an exit. -Rafal Tomal, Lead Designer of Copyblogger Media
The last study I'd like to discuss with you directly relates to increasing the amount of action that people will take.
If it can be summed up in a single phrase, the takeaway is this: choice overload kills conversions.
In The Art of Choosing, Sheena Iyengar, demonstrates perfectly the adverse effect that too many options has on conversions in a groundbreaking study involving... jam.
In her research, she conducted a study on the amount of flavors of jam that were available for participants to “taste-test” in two different displays.
Her results give an amazing example on the effect of choice overload on consumers.
During multiple Saturday afternoons, Sheena (who is a professor at Columbia University) set up two different displays at an up-scale grocery market, alternating between the amounts of jam that she had on display.
On one Saturday, she would offer 24 flavors, and on the other, she offered only six flavors.
On which day do you think more people purchased the jam?
You might be surprised, but it was the day with only six flavors.
Why?
When people are overloaded by choices, social psychologists are aware that they will often resort to their safety choice of nothing, and then move along to something else.
And that is exactly what happened in this study.
The findings also point out an eminent danger: Despite the fact that the 6 flavor test had a higher percentage of people purchasing the jam, the 24 flavor variety had more people taste-testing the jam.
Choice is demotivating only for actual purchases, because although the 24 flavor set up had 60% of people stop by to try the jam on display (compared to 40% for the six flavor display), the six flavor display had 30% of people make a purchase, compared to ONLY 3% in the 24 jam display.
Marketers must be careful when offering too many options to customers, and must be especially careful of tracking the right metrics when changing up their offering amounts.
Lesson learned: People are more inclined to take action when their choices offer variety but aren't overwhelming.

Over To You

What did you think about the 10 studies mentioned above?
Any one in particular pique your interest?
Let me know in the comments below, and thanks for reading!

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