In his book Thinking, fast and slow, Daniel Kahneman outlines how the human brain uses two different mental systems for making decisions:

• System 1 – The fast, automatic, little or no effort, intuitive, but largely unconscious mind.
• System 2 – The slow, disciplined, effort hungry, largely conscious mind that monitors system 1 and allocates attention to  more complex mental problems that require it. However, this system is lazy and will rely on system 1 whenever it thinks it is adequately handling decision making.

As an example of how these systems work here are some simple puzzles. The answers are at the bottom of this page.  Do not try to calculate the answers, but listen to your intuition:

1. A bat and ball cost \$1.10 (one dollar and ten cents).

The bat costs \$1 more than the ball.

How much does the ball cost?

2. If it takes 5 machines 5 minutes to make 5 widgets , how long

would it take 100 machines to make 100 widgets?

• 100 minutes OR 5 minutes

3. In a lake, there is a patch of lily pads. Every day, the patch doubles in size.

If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake?

• 24 days OR 47 days

These 3 questions made up the Cognitive Reflection Test that experimenters recruited students from Princeton to take. The questions were selected because they all suggest an immediate intuitive answer that is incorrect. For the bat and ball puzzle the number 10 (10 cents) tends to come to one’s mind. This is the intuitive answer but is wrong. If the ball did cost 10 cents and the bat is \$1 more than 10c (\$1.10)  that would make the total cost of the bat and the ball \$1.20, not \$1.10 as stated in the puzzle.

When the test was administered, half the students were given a test paper with a small font and washed out print that was legible, but difficult to read. The other half were given a test paper in normal print. Interestingly, 90% of the students who received the test paper in normal font got at least one question wrong. However, only around a third of those given the difficult to read paper got any questions wrong. This is because the difficult to read paper caused cognitive strain (i.e. shit we have a problem!) which automatically activates system 2. This mobilizes our full attention and allocates resource that is more likely to reject answers suggested by our intuition (system 1).

What this demonstrates is how easily we are happy to rely on our intuition (system 1) when things appear to be going well (i.e. no complex problems to solve). We rely on system 1 for making most our decisions, but this can sometimes cause us to jump to conclusions that are incorrect.

Implications for Conversion Optimisation:

• If you want to ring alarm bells and activate your customer’s system 2 then make the font small and difficult to read. This may occur during the registration process for websites that use the Captcha security test (Completely Automated Public Turing test to tell Computers and Humans Apart). No wonder this may seriously damage your conversion rate! If you have been using persuasive copy to encourage sign-up this security mechanism could undo all your hard work as it causes cognitive strain and activates a person’s system 2. This system is more likely to reject the reason for an impulsive decision and abandon a transaction.
• This model of decision making also suggests sites should avoid asking visitors to remember instructions or promotional codes etc (e.g. displaying codes as images that cannot be copied and pasted). The more information that a website expects visitors to remember for future use the more likely it will lead to cognitive strain which will activate system 2. If mental effort is needed for storing information there will be less available for other activities and people become prone to missing messages or instructions during a website journey.
• The use of two different mental systems also challenges the way organisations use traditional research and usability testing for assisting website design. In a previous post, Why should you stop using focus groups?, I outlined why focus groups can be a misleading research tool.
• However, standard usability testing, particularly in labs, are prone to some of the same kinds of bias. What Kahneman’s work suggests is that direct questions often engage the wrong system (system 2) and that observation of behaviour is more likely to provide true insights. It also supports the benefits of ethnographic research where people are observed undertaking a behaviour in their natural environment (e.g. in their home) rather than in a user lab. Ultimately though the most reliable way of understanding what affects visitor behaviour will be an online experiment.

Thank you reading my post. If you found this useful please share with the social media icons on the page.

You can view my full Digital Marketing and Optimization Toolbox here.

• About the author:  Neal provides digital optimisation consultancy services and has worked for  brands such as Deezer.comFoxybingo.com, Very.co.uk and partypoker.com.  He identifies areas for improvement using a combination of approaches including web analytics, heuristic analysis, customer journey mapping, usability testing, and Voice of Customer feedback.  By  aligning each stage of the customer journey  with the organisation’s business goals this helps to improve conversion rates and revenues significantly as almost all websites benefit from a review of customer touch points and user journeys.
• Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@outlook.com. You can follow Neal on Twitter @northresearch and view his LinkedIn profile.

Answers: 5 cents, 5 minutes, 47 days

# Linking market research to marketing strategy?

## Measuring Return on Investment:

Client-side researchers sometimes feel that they are constantly being asked to justify the value of research insights. A frequent challenge from management  is how can we measure the benefits of insights and what specific decisions have been driven by research. Ideally management would like to understand how research links to either sales or costs. Demonstrating how insights have led to specific decisions can be particularly challenging when you work in a large, hierarchical, multinational organisation where the management structure appears to be in a constant state of flux.

Ensure you spend a significant amount of time engaging with stakeholders to understand their problems and offering advice on how research can support their decision making. Once a project is commissioned it’s somewhat of a relief that you can get on with implementing research. However, to ensure insights are linked to strategy and decision making it is essential that you integrate Action Planning into the market research process. Without such a mechanism in place there can be no assurance that management will use the insights to support strategic decision making. It is very easy to ignore insights, particularly if they don’t agree with your own opinion!

### ESSENTIALS OF ACTION PLANNING FOR THE RESEARCHER:

• Ensures the researcher retains ownership of the findings and how they are used. This is important as the client-side researcher is best placed to advise on interpretation of results when management drills down to a granular level of action planning. In addition it raises the profile and credibility of the client-side researcher within the organisation.
• Provides greater visibility and evidence of how research findings are used and the value it adds to the organisation. This is invaluable when trying to negotiate budgets and agree on priorities for future research spend.
• Enables the researcher to engage with a range of stakeholders and gain a greater understanding of how findings influence and drive strategic and tactical decision making.
• Allows the researcher to work more closely with operational areas that have responsibility to implement actions generated by research.

### INTEGRATING ACTION PLANNING INTO THE MARKET RESEARCH PROCESS:

• Set expectations at the beginning! If you introduce it as best practice before you start work on a project you rarely meet resistance to the concept.
• Ask a senior stakeholder to sponsor the action planning process and obtain agreement of who will take ownership of actions within individual areas or departments.
• Include action planning in the research brief or plan. Outline any potential involvement you require from the external research agency. Propose that you act as a consultant to implement the process as you have the best understanding of the organisation and culture. However, agree with the agency how they can assist and have input into the process.
• Consider how the research and the action planning may relate to key strategic or operational initiatives. Discuss any potential conflicts or implications with the senior stakeholders before proceeding with the research project. This will ensure that the research and action planning either feeds into the initiatives or avoids overlapping.
• Soon after the debrief meet with the stakeholders to agree which insights the action planning workshop should address. You should set the agenda by identifying beforehand the priority insights and how best to approach them in the action planning workshop.
• Don’t combine the research debrief and action planning workshop. Management need time to digest insights from the debrief and an action planning workshop  can easily last for two to three hours to properly consider implications and actions.

### MANAGING ACTION PLANNING WORKSHOPS:

• Ask attendees to prepare for the workshop by sending them a short summary of the research. Get them to write down potential actions/ideas to discuss at the workshop.
• Invite people from a range of areas, including departments not necessarily involved in project to provide some diversity and independent thinking.
• Set some ground rules, e.g. no bad ideas, no judging ideas, want everyone to participate, use post-it notes to write down ideas when other people are talking, all ideas to be captured etc. Use relevant brain storming techniques to make the workshops engaging and productive.
• Begin with a short summary of the key insights that will be discussed during the workshop.
• Split the attendees into small break-out groups of 4 or 5 individuals and allocate a topic to each group.
• Provide each group with a structured approach to discuss their insight. For example if the research relates to improving customer service or experience you could ask them to generate a list of things we need to stop, start and continue doing. Ask them to spend 5 minutes at the end prioritizing their actions in each category.
• Ask each group to feedback their top 3 ideas for each category (e.g. Stop, Start and Continue), but capture all the ideas by taking away flip charts used during the break-out groups.

### MAINTAINING MOMENTUM AFTER THE WORKSHOP:

• Use a suitable template to capture and summarise all the ideas. Carefully merge duplicate ideas so that you don’t lose the meaning, group ideas into themes that emerged from the workshop, and categorize according to:
1. Quick wins that could be implemented with little or no resource.
2. Medium term ideas requiring some resource or support.
3. Longer term, strategic ideas that may require significant resource or a change in policy.
• Circulate the draft action plan to attendees and ask for feedback and comments by a set date.
• Take your sponsor through the draft action plan and get their feedback and agreement to seek owners for each action.
• Get agreement from action owners how the action plan will be kept up-to-date with progress and developments.
• Have update meetings with your sponsor and key action owners to review progress. This can be used to ensure the plan is still relevant and whether it needs to change to respond to any changes in strategic direction. It is important to review the plan on a regular basis and feed in new insights from more recent research.

Whilst I was in the process of writing this post I came across an excellent article on the Green Book blog by Edward Appleton; Should Researchers be more like Advertising Planners? This suggests that market research needs to put more emphasis on tangible value-added outputs to respond to the changing nature the world of insights. For some client-side researchers this may require a step change to ensure they are at the heart of the action planning process.

Thank you for reading this blog. I hope it generated some ideas for managing your research action planning. I would also like to thank Lisa Radin (@milguy23) for her feedback and assistance in writing this post.

Thank you reading my post. If you found this useful please share with the social media icons on the page.

You can view my full Digital Marketing and Optimization Toolbox here.

This post has been published on the GreenBook Blog market research website.

• Neal has had articles published on website optimisation on Usabilla.com  and as an ex-research and insight manager on the GreenBook Blog research website.  If you wish to contact Neal please send an email to neal.cole@outlook.com. You can follow Neal on Twitter @northresearch, check out the Conversion Uplift  Facebook page or connect on LinkedIn.

# 17 Psychological Tips To Boost Your Conversion Rate.

## How To Apply Psychology To Website Optimization:

Persuasive website content that  utilises psychological triggers can help you significantly improve website conversion. Outlined below are 17 ways you can use such techniques to more effectively engage your visitors to increase your conversions.

1. Ownership focuses our attention on what we might lose!

Even partial ownership (e.g. a trial subscription) tends to make people more attached to what they have and make them focus on what they may lose rather than what they may gain. Ownership changes our perception of things and our aversion to loss makes it difficult for us to give it up.

A great example of this is Amazon Prime which offers a 30-day free for unlimited streaming of moves and TV shows. This combines the power of FREE, that we cover later, with a limited trial that makes customers focus on what they will lose if they cancel their subscription. Try testing different trial promotions, or give more prominence to money-back guarantees, cooling-off periods (for financial services) and ease of returns for large or expensive items.

2. We are motivated by meaningful tasks and acknowledgement of our effort!

None of us like to think our effort is meaningless and we all appreciate positive feedback. Visitors want to know that any information you request from them is essential and not just for your benefit. People also like feedback to confirm they have successfully completed tasks (e.g. registration or add to basket) as this reassures and motivates them to continue.

Buffer congratulates you when you you’ve completely filled your free plan with posts. But it also uses it as an opportunity to promote upgrading to Awesome subscription plan.

For registration and sign-up forms remove any fields that are not absolutely necessary and try different words or phrases to explain why each piece of information is required. Also test different ways or congratulating customers when they have completed a task or journey.

3. Everything is relative!

People find it difficult to make new decisions and like to compare things that are simple to compare (e.g. one LED TV against another LED TV). Until a person has made such a comparison they often don’t understand there own preferences or know what they want.  Giving just two very different options will make it difficult for people to choose. They have nothing to compare either option with and they may not select your preferred option.

This is why sales people will often show you a premium option, a medium option and a value option that appears inferior. They know most people will choose the middle option. So by testing different alternatives on a given page may allow you to nudge visitors towards your preferred option. This could be different subscription options or alternative targeted content (e.g. recently viewed/wish list items etc).

4.  The first time we go to purchase is critical for the price we are willing to pay!

Once a price has been established in our minds it will largely determine our perception of current and future prices. Sensitivity to price changes is heavily influenced by our memory of the prices we have previously paid or seen.

When launching a new product if you can associate it with a premium category you are more likely to be able to charge a premium price.  You should always show your most expensive plan first as this helps create the highest possible anchor price. Test different ways of presenting prices, change the location of the price, and see if by offering a premium alternative you can boost sales without having to make large price reductions.

5. The power of FREE!

The impact of offering something for FREE is often underestimated. People are afraid of loss and because of this FREE is a powerful motivator. As a result consumers will often perceive a FREE offer as substantially more valuable than it really is.

This can result in the cost of offering something for FREE being easily outweighed by the benefit from an uplift in conversion. Alternatively, if you offer a free benefit as part of your proposition that perhaps your competitors don’t, then try testing the impact of promoting this as a FREE benefit of your service.  But whatever you do don’t mention how much it actually costs.

6. Scarcity makes us value things more!

People value things that are scarce partly because they are loss averse. We are particularly motivated if we believe that we are in competition with other people to purchase a scare item. This is why eBay auctions can get out of hand and we end up paying far more than we originally planned for an item.

Stock level indicators (e.g. number of rooms left, low stock, number of items remaining, bids etc) are powerful drivers of conversion. Scarcity is used everywhere online, including hotel and flight booking sites, flash sales, exclusive pre-sale registration, offer ending soon, and limited edition item.

Booking.com is especially good at using scarcity. As well as showing the number of rooms left, the site also shows the number of times a room has been booked today and for locations with high demand a further message is displayed (see below). They key thing here is to  Test, test and test!

7. We are more motivated by a cause than by money!

People are much more willing to spend time and effort for a cause than for money. This is because social norms are much more powerful motivators than cash. Research has shown that focusing on money can result in more independent and selfish behaviour and a reluctance to be involved or help others. People who believe in cause are much more passionate and more willing to offer  to help others.

It can be advantageous to align your brand or site with relevant good causes as it helps to build loyalty. However, taking such an approach often needs to be part of a long-term commitment to a cause as people can react negatively if you chop and change according to short-term business needs. If you do go down this route focus on the material benefits to the good cause (e.g. Computers for Schools vouchers) rather than the actual value. Test different methods of giving to good causes to understand which most engage with your customers.

8. The power reciprocation!

We feel obliged to the future repayment of favours, gifts, good deeds and the like. Organisations can use this social norm to their advantage provided they offer help, free resources, advice or samples without obligation.

Online video guides are becoming the norm, but other ways to benefit from this rule include online tools and planners, free smartphone Apps, money off coupons and how to guides. The skill here is to find something that really catches the imagination of your customers so that they value it so much that they almost feel obliged to maintain their relationship with you.

9. Sex sells!

Great images of beautiful people grab attention and can help to sell product. Sex sells and will always sell because we respond to material differently when we are in a state of arousal. Neuroscience indicates that this is because it engages the pleasurable reward centre of our brain. People also automatically assign positive traits to attractive looking people.

Try testing models of different age, gender or family groups on high converting pages to see if aligning the images more closely with your target audience improves conversion. People are naturally drawn to looking at eyes so this could also be incorporated in your tests.

10. Customers will procrastinate if you give them a chance!

People like to put decisions off until the last minute and avoid doing things that they don’t enjoy. To avoid visitors procrastinating use different strategies to motivate them to convert now!

Online only discount can be used to encourage visitors to sign up. Also have you considered using gamification techniques to make a recruitment email or registration process more interesting and enjoyable. You can also test different incentives (e.g. money off vouchers or prize draw entry) to see what attracts new customers the most.

11. If uncertainty exists people look to the actions of others to guide them!

People naturally follow a crowd as it provides us with reassurance about our decisions, especially when we are in a new or uncertain situation. Sometimes we also consciously copy others we want to associate with or admire to project a certain image to the outside world.

If your site has built up a sizable number of subscribers ensure this is clearly sign posted on your landing pages. Inform visitors about what is most popular on your site and include testimonials from existing customers.

12 People respond more positively to someone they know and like!

People want to like organizations that they buy from and they respond positively to indications that you have similar values and attitudes to them. Companies that have a clear vision and strong customer centric culture can project this through their online presence to their advantage.

Market research can help you understand your prospects life style, values,  interests and motivations. This can help you avoid having policies or promoting causes that conflict with your visitors’ vales and interests. Having photographs of real people who work for an organisation in relevant posts can improve how visitors relate to a website and have been known to significantly improve conversion rates. Further, the perceived age of a model on a page can also affect the conversion rate if they are too young or old compared to your visitor profile.

Sites that are perceived to use deception or trick customers into decisions may benefit from short-term gains in conversion but this is likely to be more than off-set by a loss from life-time customer value. Experiments have found that even a low level of irritation can make people irritated and act vengeful towards companies that annoy them.

13. People don’t like closing doors!

People like to keep their options open as it gives them a sense of control over their own destiny. Even when people are at the last stage of a transaction having a get out option (e.g. back to shopping) may be more motivating than than if you make it difficult to abandon or change items in the basket. Otherwise customers can feel trapped and out of control.

Test different sign-posting at each stage of checkout as it is important to communicate to customers where they are in the process and give them clear options. Try testing more prominent ‘Return to shopping’ or ‘Back’ buttons in checkout to see if it actually improves rather than decreases conversion.

14. The power of the written word!

People like to be perceived to be consistent and it is an important motivator of our behaviour. Inconsistency is perceived to be an undesirable personal trait. Commitment is the key to consistency and is the reason why Amway Corporation ask their members to record sales goals on paper. Similarly, just writing something positive about a subject can cause a shift in a person’s attitude and behaviour towards the views they express.

Reviews and testimonials are great for putting on your site but also they help reinforce attitudes and behaviour of those who write them. Have you analysed the value of customers after they have written a review? Test different ways of promoting testimonials and reviews and see if you can obtain permission to use them on landing pages.

15. Obedience to authority!

People often have a compulsion to comply with the commands of someone in authority. Even the appearance of authority can be enough to influence our behaviour. Some brands also are so well respected in their market that they have a certain authority that their competitors lack.

For many years in the US an actor who played a doctor in a popular TV series successfully promoted caffeine-free coffee. It’s success was partly explained by his association with being an MD on TV. Personalities associated with your category or service can be powerful symbols of authority.

Other sources of authority include independent surveys that benchmark your service. John Lewis (above) is well known for high service standards and its “Never knowingly Undersold” strap line. Awards, and testimonials from recognized experts can also add to your credibility. Try testing different ways of indicating your authority to see what works best on your site.

16. Don’t underestimate the importance of presentation!

Expectations affect every aspect of our life and how you  present your value proposition will influence how visitors respond to your site now and in the future.

Research can help you identify your potential customers’ expectations. If you    understand new visitor expectations you can test aligning your key messages and presentation accordingly. For landing pages test different benefits for signing up and see if aligning content and imagery to reflect new visitor search activity improves conversion.

17. We put greater value on things that we have helped create!

The ability to customize a product by investing our own time and effort often leads us to value it more than something we buy off the shelf. Converse allows visitors to customize casual shoes and Moonpig.com enables customers to create their own greetings cards.

Where people value the ability to personalise a product this can be a great way of improving the perceived value of your product or service. Try testing in different categories or the level of personalisation to see what catches your customer’s imagination.

Thank you reading my post. If you found this useful please share with the social media icons on the page.

You can view my full Digital Marketing and Optimization Toolbox here.