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PSY-Q: Using Psychological Intelligence to Understand and Optimize Customer Behavior

Duration - 60 minutes

Key Takeaways

  • Expand Your Reading: To better understand psychology and its application in business, consider reading works by authors like Daniel Dennett, Tim Hartford, and Nick Chater. These authors provide valuable insights into behavioral psychology and its impact on various areas, including eCommerce.
  • The Power of 'Free': The term 'free' has a powerful psychological impact on consumers. If possible, incorporate this term into your marketing strategy to attract more customers.
  • Understand Customer Profile: To better understand your customer profile, use data analytics and customer feedback. This will help you tailor your marketing strategies to meet their needs and preferences.
  • Behavioral Economics: Consider studying behavioral economics to better understand customer behavior and decision-making processes. This can help you optimize your website and marketing strategies.
  • Consciousness and Philosophy: Understanding the evolution of consciousness and philosophy can provide a broader perspective on psychology, which can be beneficial in understanding customer behavior.

Summary of the session

The webinar, hosted by Shubhankar, features Professor Ben Ambridge, a renowned psychology professor and a member of the conversion agency, Endless Gain. Ambridge discusses the psychological principles of anchoring and framing to optimize customer behavior on websites. He explains how presenting a higher price point can make other options seem more reasonable, and how big numbers can make prices seem smaller by comparison.

He also discusses how Apple has used these principles to shift consumer perception of phone prices. The webinar concludes with a Q&A session, where Ambridge further elaborates on these concepts and their practical applications.

Webinar Video

Webinar Deck

Top questions asked by the audience

  • How can we really leverage delayed gratification on a fashion site to get more sales?

    If you're selling something, so I mentioned, it can depend on where the off-site is, like, an auction site or buying like, in terms of if it's just selling, whether it's fashion or whatever you're sel ...ling, I think the way to do it is to get people to just to buy now or pay later so they don't it could be that they don't pay until the, until it arrives or, I guess, a fashion, a big thing would be like, you know, am I gonna like it? So maybe it's like, they send it out, they try it at home, and then it only debits that card if, they haven't returned the product within a certain amount of time or whatever. I mean, obviously, all these things need, need testing. You can't just go and apply a finding from psychology straight to a site without a test, it can work different on different sites, but the general principle is you need to try and make the cost to the customer, come later and the benefits of them come sooner. So if they actually get the thing before they pay for it, then, you know, this could be a way to use this to advantage.
  • What is the difference between the labor of love compared to this thinking and feeling?

    Yeah. I guess they're very similar. It's just more to do with the fact that, labor law is specific to putting in, some kind of effort whereas the sunk cost effect generally to do with, is it can be in ...terpreted to do with effort, but I would say it's more normally what people are talking about. That affects more to do with, money. But, yeah, I'm sure, like, a lot of these biases, have a kind of the same ultimate source in in psychology. It's that we kind of a lot of you will have heard of the book thinking fast and slow. So, you know, this is kind of all these things that are common to the way that we make decisions. We're not rational. We're emotional. We want what we want and we want it now and all these types of things relate to these or always these kinds of similar underlying, constructs. But, yeah, Suncast would be getting a customer to pay out some financial amount normally, which they then don't want to waste if they're not getting, you know, by failing to purchase something that will improve their experience where the labor love is really getting them to kind of do some design work or some kind of enjoyable work that will make them feel kind of invested in the effort that they've sunk in rather than just pure money.
  • In your experience, do you think there are specific words better to words to say value price? Do you think there's a golden word out there that can get more people to that word?

    Yes. The golden word is free. So this is, I should have included one of the effects actually there. It's a well-known phenomenon called the power of, free. So there was, I can't remember the exact det ...ails of the study now, but it was something like this. So that you could buy, they set up a stall and you could only buy, like, 5 chocolates per customer from their store or something, and you could buy, the fancy chocolate was $1 each. And then, and there was, like, a disgusting chocolate that was, like, one cent each or something. And everyone bought the nice chocolates and no one bought the 1 cent chocolates. They made it again on a different day, and it was like 99¢ for the fancy chocolates or free for the horrible chocolates. But again, like a limit of both per customer so you couldn't go crazy, but then everyone did the free ones. So, again, it's kind of a framing effect. Is it worth paying a dollar more to get them, to get better chocolate? In Germany, people thought it was definitely worth paying a dollar more to get the better chocolate. Except when the worst chocolate was free. So the difference between it being, you know, 1¢ and it being free doesn't mean anything for the customer. They're not gonna miss that 1¢, but free just to access the kind of you know, a like a lamp to a moth. It just kind of gets people swarming in. I'm gonna get something free. So if there's a that's that's my Yeah. That's my magical word. If there's a site, if there's a word you can get on your site somewhere, and it relates to this thing about do we do you pay extra for posters? Do you include it? If you can get free on your site in big red letters, then this is the word that's gonna, like, draw people in. Yeah.
  • How can we find out the customer profile in order to leverage the mentioned effects better?

    Yeah. I mean, it's not something that you can really do very easily, you know, in a live side, but what we do is we have people come into the labs and we have a biometric setup where we can, you know, ... we use all the things like eye gaze and the galvanic skin response and EEG and all these types of things that are gonna measure the, you know, the emotional responses that that people are giving to the site. So, I guess, yeah, this isn't quite down to personalization, which is kind of, I think it's gonna be the next big thing that's coming personalization. We're not kind of there yet, but before we can do this and a kind of live way, I think that the trick is really, biometrics is a big focus for us as at the moment of testing these things in a more controlled way in the lab where you really can get these, biometrics measures to measure these types of things.


Disclaimer- Please be aware that the content below is computer-generated, so kindly disregard any potential errors or shortcomings.

Shubhankar from VWO: Good evening, ladies and gentlemen. Today, I’m very pleased to have here with us, Professor Ben Ambridge. Ben is a professor of psychology at the University of Liverpool. He’s also written two books. Ben, welcome to the webinar. As you can see, we ...