Consumer Behavior: Practical Application of Marketing Psychology in eCommerceLenaH December 30, 2020
Understanding your customers is the simplest way to improve your overall marketing strategy and raise your e-commerce income. Figuring out why people buy, how people buy and what makes them choose product X over product Y is the simplest way to handle this effectively. Such a strategy can help you create irresistible offers, diversify your income and, overall, make your business more resilient to change. Here are several pivotal consumer behavior patterns that you need to bear in mind when organizing your e-store.
Don’t get discouraged by the low conversion rate
The first thing you need to understand in e-commerce is that low conversion rates are an industry standard. Why is this the case? Well, first of all, people know that they can look elsewhere for the product before making a purchase. Shopping around has never been easier and there are even some third-party platforms that can take them instantly to the best offer. So, even if you have a high abandonment rate, this doesn’t necessarily mean that there’s something wrong with your e-store.
The lesson: Don’t try to fix what’s not broken. Learn industry averages and the reasons behind them so that you can recognize a problem when it pops.
Another thing you need to keep in mind is the fact that not a lot of people buy right away. Even in e-commerce where buying is as simple as pressing a button, not a lot of people are ready to commit right away. They may want to do their research first. They might go through some reviews of the product and of your e-store. Potential buyers may also need more time to think. The key thing is to focus on providing them with a positive user experience the first time around in order to give them the reason to come back.
The lesson: Understand that in order to become a customer, a potential buyer needs to undergo several stages. Make that first impression count.
Diversify your marketing
Previously, we’ve talked about the customer lifecycle. According to the rule of seven, people need to hear about your business seven times before deciding to do business with you. Ideally, this would happen through seven different sources, seeing as how this gives you more credibility. So, you should start a blog but also host a YouTube channel. Those who want to get the most out of this might also want to consider investing in podcast production. Also, try to put as much emphasis as possible on the visual format. The more formats you choose to add to the strategy, the better.
The lesson: A greater variety of content will reach more people. It will also reach the same people several times over, thus giving the business more credibility.
The price tricks
The thing with the price is that it’s perceived quite subjectively, despite it having an objective value. For instance, we’re programmed to see $1.99 as $1, even though it’s almost literally $2. An item, standing next to an overpriced item seems quite frugal, even if its objective value is still relatively high. Excluding the cost of tax and shipping may seem as deceitful but it’s completely legal. It is also a common e-commerce practice. Making sure your prices appear frugal is the first step towards success in e-commerce.
The lesson: Sometimes, making your prices appear low is enough to make people buy from you. There is a number of techniques to use in order to get there.
Focus on return customers
Return customers are incredibly profitable. According to some estimates, about 8% of your regulars make 40% of your profit. Other studies suggest that 20% of your regulars make up for as much as 80% of all your income. Most importantly, it’s five times more expensive to bring in a new customer than to make an old one return. The key thing to bear in mind is that people return for several reasons. They return for the price, positive customer experience and a sense of familiarity. Providing all these three things should be a priority.
The lesson: Return customers are quite profitable and you might want to focus on keeping old buyers rather than gaining new ones.
There is a lot of cross-selling and upselling potential in e-commerce. The best way to explain how this works is to look at the concept of recommended products. Phrases like “people who liked this also liked…” are just the tip of the iceberg. Why not add a list of similar or related products? Is this self-serving? Of course. Is it in any way helpful for the buyer? Of course. The thing is that recommended products give your audience a simple and efficient way of finding what they’re looking for, without actually looking for it.
The lesson: By recommending items from your offer, you’re helping your audience explore your e-store. This boosts sales and increases the duration of the visit.
At the end of the day, understanding your audience is not that difficult. There are numerous case studies published on the subject matter and it’s relatively easy to understand them from your own experience. After all, being an e-commerce buyer is a common experience, so it shouldn’t be that hard to immerse in the point of view of your audience. All of this needs to come together in order to make the optimal user experience. Fortunately, this task is not nearly as difficult. All you need is the right strategy.