Understanding consumer behavior can help improve existing marketing campaigns and your current ecommerce strategy.
Consumer behavior does not solely apply to physical stores today as ecommerce has become more and more prevalent.
Online shopping has grown in popularity with consumers due to the efficiency, speed and convenience it provides. As such, retailers and e-tailers alike must apply the “psychology of marketing” in order to satisfy customer needs and grow their sales.
Identifying how online buyers think and feel about where they hangout online can help marketers improve existing campaigns and flesh out strategies that can reach consumers better.
Image via David Blackwell
Now, let’s take a look at how buyers behave, what type of stores appeal to them and what factors convince them to buy something.
A report provided by Help Scout reveals that there are a few ways we can convert more customers using marketing psychology. Gregory Ciotti shared the secret to more sales is as simple as understanding just what the buyers want and expect from the business.
What’s on the list? Let’s dig into some examples.
Highlight Compelling Story and Social Proof
How does the writing on the page affect buyer behavior? In Applying Social Psychology to Induce Charitable Donations by James M. Weyant, people were asked two different questions.
First, “Would you be willing to help by giving a donation?” About 28 percent of the respondents answered affirmatively.
Second, “Would you be willing to help by giving a donation? Every penny will help.” The second resulted into 50 percent of respondents saying “yes.”
Consumers are more likely to take action when minimal parameters are set. Remember, effective copy doesn’t end with the homepage.
As a way to encourage its users to subscribe to their newsletters, Yelp’s Eat24 has set a nice example of an effective call to action. Instead of the usual mail subscription message, it says “want coupons, love notes, deep thoughts about bacon? Get our weekly email.”
Image via Eat24
Exclusivity Trumps Commodity
People love to feel like they're a part of something special and exclusive. The reason why “gold” or “platinum” status works well for a customer loyalty program, according to Gregory Ciotti, is that people who are labeled as “superior” consumers tend to spend more than those in the “regular” class.
Understand the Three Types of Buyers
There are three types of buyers, according to Tightwad's and Spendthrift's research lead by Scott I. Rick, a visiting professor of Operations and Information Management at the Wharton School, University of Pennsylvania.
Image via Life Science
More than half of consumers (61 percent) are categorized as unconflicted buyers, or average spenders. It was found that these type of buyers gravitate towards blue and pink. Many top brands such as Gap, Old Navy, and Victoria's Secret use these colors in their branding to symbolize trust, stability and strength.
Twenty-four percent of buyers are categorized as tightwads, or those that spend less. These types of buyers are considered by many marketers as the hardest to convert because they can feel emotional pain when spending money. One way to appeal to tightwads is through the "re-framing value technique."
The re-framing value technique allows you to change the pricing structure to appeal to the tightwad. For example, when selling an item priced $500, you'd re-frame the price to 12 monthly payments of $41. This makes the tightwad buyer feel that the purchase is more manageable.
The remaining 15 percent of consumers are people spend more—and typically much more.
According to a report by Boston Consulting Group, "in scores of categories, the top 30 percent of customers generate from 50 to 80 percent of the revenues— and an even greater portion of the profits." Typically, the heavy spender purchases formal apparel and large consumer durables versus housewares and casual apparel.
The BCG shared that the Internet is ideal for retailers that want to expand their buyer base to the heavy spenders.
Give Consumers the Benefit of Instant Gratification
An online store’s copy should make the customer feel excited, even though they have to wait for their purchase to arrive. In order to do this, Chris Lake suggested that retailers can give shoppers the chance to upgrade products and services for free as a way of making them feel better.
The Company Stands for Something
In a white paper by CEB, it was revealed that people don’t seem to be very loyal to companies themselves nowadays. Instead, they are loyal to what the company stands for. Does your company teach people something? As what Ciotti said, people may enjoy your products, but the loyal customers love what you stand for and how you can help them.
With these factors in mind, marketers could focus on what matters to the consumer and adjust their strategies to better attract and convince their consumers.