In 2020 experts from Google published a study report on the decision-making process of online shoppers. They decided to find out what really happens on the path to making a purchase, that is, from the first time the user encounters a certain brand (e.g., through advertising) through to conversion (purchase of a product or service).
Until that time, we only knew one thing – the process is not linear, but quite the opposite – it is very chaotic. What really happens at that time? How do customers process information, and what makes them choose one brand over another?
As it turns out, price is not at all the key element. In recent years, interest in the word “cheap” decreased significantly compared to the phrase “best.” Interestingly, this sort of dynamic becomes evident across the globe.
This change of focus brings along a range of consequences, as the word “best” hides behind it a mass of different meanings – it can refer to value, function, quality, popularity, or efficiency. It all depends on the consumer’s intentions, and understanding customer needs is the Holy Grail of every marketer out there.
So what does the decision-making process look like? The solution of this puzzle is to be found in behavioral psychology.
The creators of the report conducted a broad-scale study to understand how consumers make decisions on the internet, which offers such a broad choice and unlimited access to information. It was discovered that people deal with scale and complexity by using a range of heuristics and simplifications.
IN the middle of their purchasing path, there are two models – exploration and evaluation. Exploration is the search for knowledge about products, services, and brands. At this stage, the recipient is very active. Later they switch to evaluation, which is the process of assessment and comparison of available options.
Regardless of what the customer does – whether they review the contents of a website, type in phrases in Google, scroll company profiles on Facebook, or read blogs or review sites – each of those activities is an element of one of the two above-mentioned models. The recipient jumps between them as long as it takes them to become certain of their choice – whether they buy a product or not.
As one may expect, being in a state of chaos is not easy for the customer. Their brain keeps looking for points of reference that would lead to a simplified inference.
In the process of completing a purchase online, the researchers distinguished six basic rules.
- Category simplification – short descriptions of key characteristics of a product simplify the purchasing process.
- Here and now availability – the longer the customer waits for a given product, the weaker their perception of the offer.
- Social proof – recommendations and reviews are persuasive.
- Availability heuristics – as the product becomes less and less available, it becomes more desirable.
- Power of authority – consumers are eager to trust experts and “celebrities.”
- Power of freebies – a free gift upon purchase, even unrelated to the product, can provide powerful motivation.
During the experiment carried out as part of the study, customers were asked to select two of their favorite brands in a given category. Then a range of heuristics was tested to see if people would change their preferences. To test an extreme scenario, a fictitious brand was included in each category, one the customers had never encountered before.
The results were astonishing. The fictitious brand of cereal was selected more than 30% more often than the industry favorite because the social proof rule worked through a large number of five-star reviews. In the most extreme case, a fictitious car insurance company gained an 87% share in customer preference because, during the experiment, all 6 of the above-listed rules of simplified inference were applied to it.
The proper implementation of behavioral techniques is a powerful weapon in the hands of every marketer. The more valuable content fills the “middle of the purchase path,” the more probably it is that the user will select the given brand. Here’s what you can do to increase your chances of drawing the customers’ attention:
Make sure your brand is present in different channels – try to put your product or service in the foreground during the exploration phase.
Use the behavioral psychology rules – by skillfully using simplified inference, every offer can become more attractive.
Fill the gap between the first contact with the brand and the purchase – do it so that your current and potential customers spend as little time interacting with competitors as possible.
Create elastic, multifunctional teams – make sure different departments at your company cooperate to avoid the silo effect – a situation when lack of communication leads to lowered effectiveness in achieving goals.
Contact us if you plan to work on an e-commerce project for your company soon. We would love to hear about your project!