Understanding the Psychology of Choice Can Rock Your Marketing
Every day, we make innumerable choices
We make choices about the clothes we wear to the food we eat. But according to the behavioral economist, Dan Ariely, many of those decisions may not reside within our own choosing. People like choices, but give them too many or choices that may be difficult and they are likely to freeze.
A person faced with a difficult decision may gravitate to whatever has been chosen for them.
To illustrate this point, Ariely uses the example of European organ donor participation rates. Of the eleven countries that include organ donor registration at the Department of Motor Vehicles, participation rates in four of those countries reached only as high as twenty-eight percent (and that was after the Netherlands conducted an exhaustive enrollment campaign).
But in the other seven countries, participation rates reached one-hundred percent, with one exception at eighty-six percent.
Oddly enough, there seemed to be no identifiable cause from any of the usual factors like culture, geography, ethnicity, race, or gender.
What caused such a discrepancy?
It turns out the determining factor was the form used at the DMV. The countries with low participation rates were using an opt-in question requiring people to check the box if they wanted to participate in the organ donor program. And what happened? People didn’t check the box and they didn’t join.
The countries with the high participation rates had a slightly different form — one with an opt-out question — that required people to check the box if they didn’t want to participate. Interestingly enough, people didn’t check the box. But in this scenario, by default, they joined the donor program.
“It’s not because we don’t care,” Ariely says. “It’s the opposite. It’s because we care. It’s difficult and it’s complex. And it’s so complex that we don’t know what to do. And because we have no idea what to do, we just pick whatever it was that was chosen for us.”
What Ariely is talking about here is what is referred to as cognitive dissonance — or overload.
For marketers, this simply means that often the easiest way to get someone to take the desired action is to present them with a default choice.
Think about the last time you landed on a website home page cluttered with so much information it made your head spin? That uncomfortable feeling is dissonance and what often results is that scenarios is the visitor navigating away to another website.
High Bounce Rate
Sites with a high bounce rate (when a visitor leaves a site without clicking any links), can usually be traced back to either unclear, cluttered, or too much information.
If you’re like me, you probably receive more than one or two email subscriptions. Think about the newsletters that you read regularly. It’s likely that those emails are simple in design, single-column, with clear and concise language.
But dissonance can also occur when we are presented with too many choices.
Some call this phenomena, “experience mapping.”
Dr. Sheena Lyengar, the author of “The Art of Choosing,” conducted a study on this subject while she was a doctoral student at Stanford. Her somewhat-famous “jam” study involved research assistants setting out jars of jam on tables in a supermarket and offering samples to shoppers.
One table had six jars while the other had twenty-four. While the latter attracted more visitors, the former had a higher percentage of sales. The six-jar table converted thirty percent of visitors into customers while just three percent of the visitors to the twenty-four-jar table purchased jam.
Choice overload can have consequential effects when we choose not to decide, even when it’s in our best interests.
In her TED talk, “On the Art of Choosing,” Lyengar gives an example of a study she did in which the retirement savings decisions of nearly a million Americans were evaluated. She wanted to understand whether the number of fund offerings available in a retirement savings plan affected a person’s likelihood to save more.
What she found was that there was in fact, there a correlation. The more funds offered, the lower the participation rate.
Let’s look at a few examples of how we can apply these principles to your marketing efforts.
“One Page. One Purpose. Period.”
That’s the advice from Oli Gardner of Unbounce, a landing page and conversion marketing company.
The purpose of a landing page is typically for sales or lead generation. Either way, the singular purpose of that landing page is getting the visitor to fill out the form or make a purchase — conversion.
Anything that distracts from that purpose should be removed.
A good landing page should have no site navigation or external links. It should have a clear headline, message, and call to action.
Shopify’s trial landing page nails it on nearly every point. It’s simple, clear, provides social proof, and requires just an email address to get started.
Website Product / Service Pricing
Many startups spend a lot of effort and money driving traffic to their website only to neglect one of the most important pages — the pricing page!
This is one place where the psychology of choice can have the most impact on a business. While there’s not a one-size-fits-all solution, there are some basic best practices you can employ to maximize conversions and profits.
The most popular method is to highlight one option. You’ll see this technique used on many websites today.
A common practice of three choices may be the one you want to use. Uses language that makes it easy for a visitor to choose.
The example below from Highrise follows a common practice of three choices, but also uses language (most popular plan), that makes it easy for a visitor to choose. Note that it’s not the most expensive plan either.
Like landing pages, email marketing should be singularly focused while fulfilling your promise to your subscribers (why they signed up).
Emails should compel subscribers to act by providing a sense of urgency and a clear call-to-action.
Here’s where the button language can help drive engagement. Make sure to use language that is specific, but inviting. Friction words like submit, order, buy, or download implies effort. By focusing on the benefit and using words like “get” or “learn,” you’re likely to increase clicks.
Some marketers choose to add links like website navigation, but I’m a big fan of keeping links to a minimum with the focus on the call-to-action buttons.
The invitation below for SXSW is a great example of singularly-focused email marketing with a single call-to-action.
There are many other great examples of how brands are implementing choice psychology in their marketing. But don’t just copy what others are doing. You should be testing your marketing by collecting your own data.
Determine your strategy based on your business model, but make sure to test colors, fonts, pricing models, and the number of plans you offer.
Test everything. What works for another business may or may not work for yours.
Context and options can drastically influence the outcome of a decision — whether it’s a buying decision, opting into a newsletter, or participating in an organ donor program.
For digital marketers, limiting the number of options presented to a consumer doesn’t necessarily mean reducing the number of products or services. Rather, presenting them wisely, like limiting the number of items per row, with large, clear descriptions.
Applying these principles of psychology to your daily marketing routines can be a powerful tool for any marketer.
Originally published at www.startupgrind.com.