Understanding Consumer Behavior to Convert More Customers

When it comes to converting consumers, the secret to more sales is as simple as understanding consumer behavior and learning what your buyer wants from your business.

Businesses often have many customers buying their products — or at least too many to get to know each personally. When that’s the case, what’s to be done?

The answer: Turn to rigorously tested research on consumer behavior.

We are all different, but in many instances our brains are prone to react in a similar manner. Understanding these subtleties in the human mind can help your business find creative ways to ethically move more buyers towards saying “Yes!” to your products or services.

This resource includes 10 consumer behavior studies that reveal such insights into the minds of your customers. Let’s get started.

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1. Analysis paralysis and consumer behavior

We all know that small things make a big difference when it comes to copywriting. Interesting research on consumer behavior by Dr. Robert Cialdini, Professor of Psychology at Arizona State University, examined the donation process of the American Cancer Society and how a minute change delivered drastically different results.

The research also reveals why it’s important to analyze why people say “no” rather than always looking at why they say “yes.”

Below are two phrases used to wrap up a door-to-door donation request. Researchers tested the effect of the slight variation in wording:

• "Would you be willing to help by giving a donation?"

• "Would you be willing to help by giving a donation? Every penny will help."

Subtle difference, right?

The wording may be subtle, but the resulting effect was drastic: People who were asked the second variation were almost twice as likely to donate.

Source: Full-Cycle Social Psychology

The researchers concluded that people are more likely to take action when minimal parameters are set.

People may ask themselves if they have enough to donate and whether it will make a difference. By clarifying that “even a penny” could make a difference, the second line makes the request more achievable for those considering a donation.

The best part of this whole study: Donors were twice as likely to give in response to the second question, but the amount they gave did not diminish. Knowing that “even a penny” was enough still catalyzed them to give as much as respondents to the first question gave.

2. Embrace the power of internal labels

Consumer behavior research has shown that people like being labeled and are more inclined to participate if they feel included.

A 2011 study examined the voting patterns of 133 adults to see if labeling them had any affect on their turnout at the polls.

After being casually questioned about their regular voting patterns, half of the participants were told that they were much more likely to vote since they had been deemed by the researchers to be more politically active. This wasn’t actually true; these people were selected at random.

The other half of the participants weren’t told anything; they were just asked to describe their voting patterns.

Despite this random selection, the group that was told they were “politically active” had a 15% higher turnout than the other group.

Our brain seeks to maintain a sense of consistency (even if it’s artificial), and this is why the foot-in-the-door technique works so well even on prepared minds.

We enjoy being consistent so much that even being told we are a part of a group makes us more receptive to its message, as long as it’s something we approve of (like being a responsible voter). This is why “gold” or “platinum” status works effectively for a customer loyalty program.

People who are labeled as “superior” consumers tend to spend more, and those in the “regular” class aren’t affected.

3. Understand the three types of buyers

No matter what industry you operate in, consumer behavior research shows that there are three groups of buyers who can be characterized by the “pain” they experience when purchasing something.

Neuroscientists have defined human spending patterns as a process of “spend ‘til it hurts,” so understanding these different levels of pain points is essential to maximizing your potential sales:

• Unconflicted (61%): Average spenders.

• Spendthrifts (15%): People who are able to spend more before they hit their maximum buying pain.

• Tightwads (24%): People who spend less (on average) before they hit their maximum buying pain.

So which type of buyer is most difficult to convert? The tightwads.

Since they comprise nearly a quarter of your potential customers, you should learn some of the smart techniques to minimize buying pain for your “tightwad” customers.

Fortunately, the secret boils down to utilizing well-written copy that appeals to their apprehensive nature. According to some remarkable neuroimaging studies, minimizing buying pain for tightwads (and everybody else) can be successfully accomplished by incorporating three simple strategies.

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Reframing value

If you see a product that costs $1,000 per year, you’d definitely approach the purchase with a little caution, right?

That’s because $1,000/year isn’t peanuts. To make matters worse, it seems like a HUGE amount of money for conservative spenders.

What if the product was just $84 per month instead? Not bad, right?

The thing is, $84/month is the same as $1,000/year.

While this reframing method is effective for buyers of all types, it is most effective when targeting conservative spenders. If you’re offering something that has a recurring cost or that can be broken down into smaller increments, be sure to investigate how you can utilize this information in your pricing model.

Reduce pain points with bundling

Neuroeconomics expert George Loewenstein notes that all consumers (especially conservative spenders) prefer to complete their purchase in one easy fell swoop rather than purchase multiple accessories separately.

He cites customers’ willingness to upgrade car packages all at once but points out how difficult it often is for the brain to justify each individual upgrade (“Yes, I will pay extra for navigation ... and ... seats ... and ...,” etc).

These individual purchases create individual pain points, whereas a bundled purchase creates only one pain point, even if the price is much greater.

Loewenstein’s research shows why many consumers are willing to pay more for complete bundles rather than chasing down individual products and accessories: Not only is it less of a hassle, but it also results in fewer purchase pain points.

Sweat the small stuff

We all know the old adage “don’t sweat the small stuff” isn’t all that applicable to crafting effective copy — but how small of a change matters?

One of the goofiest conversion bumps ever is a study done by Carnegie Mellon University that reveals the impact of a single word on conversion rates.

Researchers changed the description of an overnight shipping charge on a free DVD trial offer from “a $5 fee” to “a small $5 fee” and increased the response rate among "tightwads" by 20 percent.

Let’s see those side-by-side, just to point out how absurd this is:

Has the word “small” ever felt so big? With a single word bumping up conversion rates by that amount, it’s safe to say that when crafting copy targeted at conservative spenders, the devil is in the details.

4. Highlight strengths by admitting shortcomings

Is it ever a good idea to admit to your faults? After all, people don’t want the “real” you, right?

Consumer behavior research from social psychologist Fiona Lee states that admitting shortcomings is a great way to simultaneously highlight your strengths.

Lee’s study aimed to measure the effects of admitting to missteps and faults and how these actions would affect stock prices. Experimenters read one of two fictitious company reports; both reports listed reasons why the company had performed poorly last year.

• The first report placed emphasis on strategic decisions.

• The second placed emphasis on external events (e.g, the economy, the competition, etc.).

The test subjects viewed the first company far more favorably than the second. Admitting to shortcomings in areas like strategic thinking showcased that the company was still in control despite their faults.

After examining hundreds of these types of statements, Lee found that the companies who admitted to their strategic faults also had higher stock prices the following year.

When blaming external forces (even if they happened to be true), companies gave skeptics a reason to view them as not having the ability to fix the problem, in addition to the consideration that they might just be making excuses.

5. Use urgency the right way

Creating a sense of urgency in your copy is one of the oldest tricks in the book — and still one of the smartest.

Dr. Robert Cialdini notes “scarcity” as one of the six pillars of influence, and it’s easy to see why: Great demand leads to great sales.

The following research explains why urgency can completely backfire on you and ruin your meticulously written sales copy.

The research is a classic study by Howard Leventhal where he analyzed the effects of handing out tetanus brochures to subjects.

Leventhal conducted the study by handing out two different pamphlets, both sparing no detail on the horrid effects that the tetanus disease can have on the body. The first pamphlet described only the effects of tetanus; the second included information on where to get vaccinated.

Those who had the second pamphlet were much more likely to take-action; the rate that followed through with vaccination was superior to the first group by nearly 25%.

Source: Effects of Fear and Specificity of Recommendation Upon Attitudes and Behavior

Leventhal also had a separate group receive a “low fear” version of the pamphlet that described tetanus in much more moderate language and with no graphic pictures. He noticed that these participants had nearly the same rate of respondance as those who had received the standard “high fear” version (without the follow-up info).

Those who received the follow-up info were also more engaged with the pamphlet as a whole, being able to recall much more specific information from the packet than other participants. Why?

Even though the follow-up information provided in the second pamphlet wasn’t comprehensive, Leventhal was able to show that our minds are susceptible to blocking out information that evokes a sense of urgency if there aren’t any instructions on what to do next.

He revealed that those who didn’t receive follow-up information were prone to convincing themselves that “I don’t need to worry about this because it won’t happen to me anyway,” whereas those in the second group had little reason to feel this way because they had a plan to take action.

6. Make their minds light up instantly

There are few things our brains love more than immediate stimulation.

Research has shown that instant gratification is such a powerful force that an ability to control against it is a great indicator of achieving success.

In terms of your customers, you’re actually looking to do the opposite:

Your copy should remind buyers of this advantage at every turn. When a potential customer is on the verge of completing a purchase from your business, they are heavily influenced by how quickly they can receive gratification for parting with their hard-earned money.

Several MRI studies, including one on nicotine addiction, have shown that our frontal cortex is highly active when we think about waiting for something.

On the other hand, our mid-brain lights up when we think about receiving something right away (and that’s the one we want to fire up).

Words like “instant,” “immediately,” or even just “fast” are known to flip the switch on the mid-brain activity that makes us so prone to buy.

In fact, other than the words "free" and "new," “instantly” just may be the most persuasive word you can implement into your copy. If you aren’t selling digital goods, use words like “quick” instead.

Researchers have noted that the key to these words is that they allow us to envision our problem being solved right away; whatever pain point we are seeking to fix by purchasing something becomes far more enticing if we know our dilemma will be solved instantly.

7. Establish a rival (or enemy)

In the business world, meaningful connections are paramount to your success. After all, who you know is often as important as what you know.

Networking is certainly important, but that being said, you still need an enemy.

Why? When could this ever be a good thing? Turns out, it’s a great thing if you’re looking to achieve a cult-like addiction to your brand.

In a highly controversial study entitled ”Social Categorization and Intergroup Behaviour,” social psychologist Henri Tajifel began his research trying to define just how human beings were able to commit acts of mass hatred and discrimination.

In the tests, subjects were asked to choose between two objects or people that they had no relation or connection with; one example asked participants to pick between two painters with meaningless differences.

They were later divided into groups based on their choices.

Tajifel found that he could create groups of people that would show loyalty to their supposed in-group and outright discriminate against outsiders, all with the most trivial of distinctions.

Despite these trivialities, when it came time to dole out REAL rewards, subjects had a huge bias towards those peers in their in-group and discriminated against handing out rewards to the so-called “others.”

Sounds an awful lot like big companies going toe-to-toe, doesn’t it? Like the Mac vs. PC commercials or Miller Lite taking potshots at unmanly light beers.

Our friends over at Copyblogger would assert that real publishers are self-hosted and that well-written content is the centerpiece of the internet. They back these claims by offering solutions that reinforce their assertions.

The focus isn’t always on skewering your competitors in search for an enemy — rather, it's in associating yourself with certain ideals while distancing yourself from the rest.

Creating a unique selling proposition is as much about defining who your ideal customers aren't as it is about defining who they are.

8. Stand for something meaningful

We’ve talked about the importance of exclusion, but what about including those ideal customers?

People do care about being included with a brand’s message — but only when they share the same values. In fact, for those who’ve stated that they have a strong relationship with a single brand, over 64% said it was because they had “shared values” with the company in question.

Does your brand stand for something?

According to findings from the CEB, people don’t seem to be very loyal to companies at all. They are loyal to what the company stands for.

One great example is TOMS Shoes, a brand that many would claim is the “real deal” when it comes to making legitimate stands about their beliefs and company ideals outside of their business. Customers adore their policy for donating a pair of shoes for each pair sold.

Or take a look at Zappos: CEO Tony Hsieh defines the company not as an online retailer that sells shoes, but rather as a “customer service company that happens to sell shoes.” This sort of viewpoint isn’t tacked on; it’s been widely memorialized just how far Zappos will go to ensure an amazing customer experience.

9. Play the devil's advocate

Are you familiar with how the term “devil’s advocate” came to exist? It’s actually from an old process the Catholic church used to conduct when canonizing someone into sainthood.

A lawyer was instructed to be the devil’s advocate for those being inducted as a saint, and their job was to find reasons and arguments that showcased why this person should not become a saint in order to create a more objective canonization process.

The marketing world has an important lesson to learn from this process.

According to research by social psychologist Charlan Nemeth (and his colleagues), the role of devil’s advocate certainly plays a part in persuasion, but it is not one of creating true dissent. The research showed that TRUE dissenters have a meaningful impact when trying to persuade a majority group toward a different perspective.

Research in this area has also shown that dissenters in a group can enhance creativity and problem-solving.

Those playing devil's advocate?

They actually increase the resolve of the original majority.

The researchers found that this was because group members did not take the critiques from the devil’s advocate as seriously, and since the group was now bringing up (and subsequently dismissing) possible alternatives or flaws, they were much more confident in their original stance.

For marketers, this offers a much less scandalous opportunity: Playing devil’s advocate to your own products potential shortcomings ( e.g. “Some have said that my product is too complicated, but here’s why it isn’t.”). This can actually enhance your persuasive efforts as people see their concerns addressed before they buy.

10. Keep customers on their toes

What’s the number-one thing that creates loyal customers? It’s the social construct of reciprocity.

Better yet, there is an even more powerful form available for business owners to use: The act of creating surprise reciprocity.

In a study by psychologist Norbert Schwarz, he found that as little as 10 cents was enough to change the outlooks of participants who found the money by surprise, creating a more positive view of their day due to this small high-point.

While this study was conducted in 1987, the implications remain the same: it doesn’t take much to start the process of reciprocity; even the smallest of favors allow goodwill to be bought with customers, increasing loyalty and retention.

Schwarz succinctly summed up this phenomenon as: "It’s not the value of what you find. It’s that something positive happened to you.”

In another famous study from Influence, Dr. Robert Cialdini noted that subjects were prone to rate others as much more likable when they had simply bought them a can of soda.

One of the best ways to employ this tactic to boost customer retention is to follow up with customers after they make their initial purchase with you.

A free guide to their new product often works well for those selling software. For brick-and-mortar locations, things like a free plastic comb work wonders for businesses like barbershops.

Zappos has admitted to regularly upgrading customers to overnight shipping without telling them just to create a wow factor that wouldn’t have been the same if it was mentioned on the sales page.

Even if you can’t afford a gesture as big as that, remember, it really is the thought that counts. Our resource 11 Memorable and Inexpensive Customer Appreciation Ideas highlights a number of ways you can use surprise reciprocity.