This blog was originally published here.
All of us browse online for products. But, why do such few online shoppers convert to purchasers? In other terms, what are the critical factors that determine whether a person will buy a product from your website? This article covers all these aspects. We’ll start with understanding the latent factors influencing consumer buying behaviours. Then, we move on to exploring the steps right from when a user visits an eCommerce website and works through to the very end, which is placing an order. Finally, we end with some technical mantras that are equally important for the success of an online business site.
Social proof – we do what the others do
Have you ever avoided a restaurant that was almost empty and chosen the next one even if you would have to wait to get a table? Less crowd means no tasty food or poor service, right! Have you ever chosen to watch a movie just because everyone at your work seems to have watched it? As humans, we tend to do things that others do, for the fear of being left out, or for the aspiration of catching up with everyone – that’s how we are wired. Psychologists, sociologists, and new media marketers call this powerful dynamic “social proof.” It has been cited by Dr Robert Cialdini as one of his six principles of persuasion.
A stunning practical example of this principle is the release of the hits collection “50,000,000 Elvis Fans Can’t Be Wrong” in 1959 by RCA Victor. The title is in itself a social proof! Needless to say, the record went platinum for all the right reasons. Though 50 million fans had already proved their love for the King, the record company knew how to invite millions more to the dance floor.
So, why do people buy? Let’s look at answers to this question with the help of an interesting concept and a few examples.
Trust – deliberative and associative
If we talk about online conversions, the average conversion rate for Google Ads on mobile across all industries is 3.48% on the search network and 0.72% on the display network. The number is higher in the case of organic search. However, it is still not high enough to explain why so many people are dropping off from the websites in the first minute itself.
Consumer behaviour suggests that trust is an important factor when people make buying decisions online. There are dedicated salespeople at brick and mortar stores to verbally convince you to buy a particular product or woo you with interesting offers. However, none of these strategies are applicable in the online space. What are the hidden psychological parameters that define customer decisions in an online platform?
Researchers have tried to find the answer to this with the help of deliberative cognitive process. By means of such processes, they have used decision models to find out the logical factors to define the reasons that guide a person’s buying decisions. Some of the factors include a person’s existing disposition to trust (some people are more trusting than others), the visual appeal, or other structural parameters of the website. Deliberative processes involve hard cognitive actions on part of the people.
Cognitive vs Associative
While the ‘cognitive’ concept might sound appealing – research indicates that depending on the context, most people focus on the seemingly insignificant factors like font styles and colours and completely ignore the important parameters like the security of the website. This gives rise to a new viewpoint. It might be possible that online shoppers are mostly making decisions based on instincts very much like the ones used in interpersonal processes. Perhaps the deliberative process is not so cognition-heavy as originally estimated.
Such a view can be substantiated by the work of Steven Sloman, a cognitive psychologist. He argued that people are “parallel processors” who utilize two complementary reasoning systems. One of the systems is deliberative, which is rooted in an established, structural way of thinking (mathematics, for example). The other one is associative, which is derived more from our experiences and gut feeling rather than a carefully calculated structured thought process.
“We typically don’t know enough individually to form knowledgeable, nuanced views about new technologies and scientific developments. We simply have no choice but to adopt the positions of those we trust. Our attitudes and those of the people around us thus become mutually reinforcing. And the fact that we have a strong opinion makes us think that there must be a firm basis for our opinion, so we think we know a lot, more than in fact we do.” ― Steven Sloman from his book The Knowledge Illusion: Why We Never Think Alone
Based on this, two hypotheses were formed. While the stakes are low, or in other words, when making decisions like purchasing from an e-commerce website, people generally tend to rely on associative thinking process. But, on the other hand, while making riskier decisions, intuitive reasoning becomes a pertinent factor.
The Experiment and Conclusion
In an experiment conducted, subjects were randomly split into six groups, each exposed to different experimental conditions. They were provided with a crippled version of a website, asking them to take actions of two different magnitudes – one group was asked to buy books (low-risk decision) while the other was asked for a little more sensitive information like credit card details and personal information. The result? It was not what was expected!
A longitudinal, logistic regression analysis of the observations stated that quite ironically, subjects used cognitive process in a hypothetical, low-risk situation and intuitive process in a high-risk situation. Thus, it becomes clear why UI designers are one of the most highly paid folks in the tech-industry – small clues like aesthetics and professionalism matter massively while building online trust.
What is the solution?
Some of the ways to improve the user experience would be to use well defined CTAs, improve the click-rate, and ensure that all the pages are linked well. In short, the goal is to make life easier for the buyer. Don’t let the buyer be confused, even for one second, because that is how long it will take from him to click away from your site. So, if there are enough visitors on your site but the conversion rates are still low, take a moment to run an analysis using tools like Google Analytics or WebMaster. Further, find out the problems and make the necessary changes. Also, a crucial trick that most companies miss while designing the website is that they fail to have members from all the teams on board. You’ll be surprised to know the tips or insights that your sales team can provide your developers or UI designers. Stop for a moment and look around – Will customers buy from your shop?