Those catchy headlines and those bright bold letters on your competitors e-commerce store is all there for a reason- to get consumers motivated to buy.
Sales psychology is nothing new, however more and more e-commerce stores are testing out the power of the human mind in order to boost conversions and increase sales.
Most sales psychology relies on making the customer feel:
1. Fearful of missing out on a product, service or opportunity
2. Excited to be apart of something new, revolutionary or convenient
3. Pleasure or some form of self-enhancement by purchasing
These three strategies have been used and tested time and time again by e-commerce marketers, and here are the top 5 (and somewhat sneaky) strategies that have been found to work the best.
1. Creating A Sense of Urgency
When something appears to be in limited quantity, suddenly its perceived value increases. It also puts pressure on the consumer to make a quick decision to avoid missing out.
Many e-commerce stores have been taking advantage of this tactic including Amazon, which deliberately includes the number of items left in stock. This number however, is often inaccurate and is usually much less than the actual amount.
In fact, research has found that if e-commerce stores let consumers know that there are only 20 or less left in stock, it boosts conversion rates.
Along with limiting the amount of merchandise, putting a time frame on the deal can also motivate consumers to buy.
Groupon is famous for this and offers limited time deals with huge discounts. On their website, they even show a count down timer which adds to the sense of urgency.
Another way e-commerce stores create a sense of urgency is through their shipping methods. Amazon also does this by suggesting to consumers shipping dates based on when they purchase the item. For example- “Want it tomorrow? Order in the next 22 minutes…”
All of these strategies work to create a fear of missing out and raises the level of excitement when making a purchase.
2. Loss Aversion and Perceived Value
This works on creating the feeling that the cost of missing out is greater than the cost of purchasing the product itself. Usually this is done through offering a huge discount or some type of incentive that leaves the consumer feeling like they are getting a really good deal.
This is why most e-commerce stores appear to be having sales all the time. By offering a discount and showing how much the consumer will save off the regular price is always a huge motivator in the buying decision as everyone wants to feel like they are getting the most out of their money.
In fact, research conducted on what persuades consumers to buy online found that 56 percent are influenced by a deal or discount of price.
Another way e-commerce stores influence consumers with price is by offering a series of different packages at different price points. This method is often used when selling services or software and perfectly positions one of the options as being the best value by showcasing them in a ‘good, better, best’ format.
By anchoring price points like this, often the consumer goes for the mid priced or ‘better’ option, which is often the package the e-commerce store wants you to purchase in the first place. This psychological tactic is called value attribution.
Another strategy for motivating consumer to buy is by including a free gift or incentive that makes purchasing the product seem like an even better deal. This may include a free gift, a discount for your next purchase or even free shipping.
Offering free shipping however, is often a win-win for e-commerce stores as unexpected shipping costs are often one of the main reasons that consumers abandon carts.
Free shipping is also a great way to get consumers to spend more, especially if there is a minimum purchase order. For example, the clothing brand North Face offers free shipping on order of $50 or more, which often incentivises those who have spent under $50 to add a few more items to their cart.
All of these strategies work to make you feel as if you are getting a deal that is far too good to be missed.
3. Risk Aversion and Building Trust
Usually there is a higher risk associated with buying things online as compared to buying things in the store. For one, you can’t see the products that your are purchasing and secondly, there have been some pretty bad horror stories about online purchases gone wrong.
Especially if you are a smaller e-commerce store, painting a picture that you are both trustworthy and reliable goes a long way in making consumers feel comfortable in purchasing.
In fact, statistics show that nearly 17 percent of online shoppers will abandon a shopping cart due to feeling insecure about entering their personal information and credit card details.
In order to counteract this from happening, many e-commerce stores will include phrases like “100% money back guarantee”, “Free Returns” or “Life Time Warranty” in order to establish consumer trust.
Even though Amazon is one of the biggest e-commerce giants in the world, part of their success was due to the fact that they offer such easy and flexible returns and guarantees.
4. Cart Abandonment and Influencers
Studies have found that over two-thirds of shopping carts never make it through to the checkout phase. This is why e-commerce marketers have come up with clever lingo to help keep consumers motivated.
Sites like Amazon for example, have the “1-click order” option which prevent consumers from abandoning their cart due to time constraints or from having to input their details.
Another popular reason for cart abandonment is coupon codes. In fact research by payment processor, PayPal found that over 27 percent of online shoppers cited searching for a coupon code as part of their reason for cart abandonment.
Due to these statistics, many e-commerce marketers are now looking at removing the coupon code field from the shopping cart page.
One of the best ways marketers can get those that have abandoned their carts to return however, is through email marketing. Most marketers know the value of a follow up email but SalesCycle also provided these statistics based on their research:
- 13 percent of abandoned cart emails are clicked
- 46 percent of abandoned cart emails are opened
- 35 percent of clicks lead to a purchase back on the main site
- 19 percent of the purchases are higher than the original abandoned purchases
- Most abandonments happen between 1pm-2pm with Thursday being the most common day
The reason that e-commerce marketers have found abandonment emails to be so effective is that often consumers just need that extra encouragement to feel confident in making their purchase.
5. Assurance and Social Proof
Research in the field of sales psychology has found that outside opinion matters a lot when it comes to making purchases.
While it easier to ask the opinion of a friend or family member when you are in a retail store, shopping online can be a little tricker, which is why most e-commerce stores will include reviews, comments and ratings.
Amazon is one e-commerce store that is know for its reviews and includes a 1 to 5 star rating system for every product they sell.
When consumers see a positive, 5-star rating, they are definitely more influenced to buy. Just the same, if the product they are wanting has a poor rating or no rating at all they can be turned off immediately.
Statistics also show that 51 percent of consumers are influenced to purchase a product based on the reviews and opinions of customers who have already purchased the item.
This was higher than the descriptions written by the manufacturer and even higher than product endorsements from top celebrities and big name media outlets.
Due to the fact that reviews convert so well, many e-commerce stores have artificially created reviews and testimonials in order to attract customers. While it is hard to tell if this is always the case, more and more consumers are becoming savvy to this.
In order to build trust in consumers, sites like Amazon have introduced strict review policies and also require reviewers to state in their review if they received some incentive for leaving their rating.
Checking in on social media is another way for e-commerce stores to build a solid reputation. Especially for millennials who spend the most time on sites like Facebook and Instagram.
In fact, most tech savvy consumers who want to check the authenticity of a brand or e-commerce store will also look for their social media page to see what type of community presence they have and what their fans or followers are saying about them.
Sales psychology tactics work however, when overused it can leave consumers feeling that they are no more than just another opportunity to make some quick cash.
If you take top e-commerce sites like Amazon, you can see that they not only offer some of these more sneaky sales tactics but they also offer positives, such as free returns on most products, reviews and a secure checkout environment, making consumers feel relaxed and comfortable when purchasing.
Top e-commerce store Zappos also revealed that close to 75 percent of all of their sales are from repeat customers and they attribute this to the fact that they offer exceptional customer service and easy return policies.
If you are going to use any of these sales tactics on your e-commerce store, it is important to not overuse them and to also ensure that you are putting the needs and security of the customer first.
Remember, it only takes one bad experience on your e-commerce store to turn customers away for good.