What Does Behavioural Economics Tells us About Conversion Funnels?
We Are Connected:
Most conversion funnels appear to be based upon linear models of decision making such as A.I.D.A (Attention, Interest, Desire, Action). However, this ignores the fact that people are connected and use their networks extensively to identify who they can trust. This means they don’t mindlessly go though each step in the mythical conversion funnel until they complete their task.
Behavioural economics supports the idea of a non-linear decision making process as it provides clear evidence of how important our interactions with other people are in the choices we make. We use our network to reduce the chances of our decisions being a disaster. This is because if someone is known to our network they risk damaging their own reputational capital if they sell us something not fit for purpose. Behavioural economics also shows how underlying emotions, social norms, traditions, and many contextual factors such as our environment influence decisions. If any of these ring alarm bells we may reconsider our goals or abandon the purchasing process.
This often produces an erratic, on-off and on-again decision making process. Plus as we employ our unconscious brain when we can to conserve cognitive energy we may not even be consciously aware of many of the factors that drive our decisions. This undermines much of the market research that organisations use to design their marketing campaigns.
Multiple Purchasing Processes:
In addition, when people are online they often simultaneously look at alternative solutions and so could be in more than one purchasing process at the same time. This means the funnel metaphor is misleading when it comes to understanding real-human decisions as it over-simplifies the process.
A Leaking Bucket:
A better metaphor may be a leaking bucket that is constantly being filled by a stream of water from a tap. People frequently swing from one decision to another and the importance of factors in our decision making can quickly shift as our emotions, social interactions and our environment alter our motivations.
Our brain filters out a lot of the information that we are targeted with and cognitive biases further distort our perception of the information we receive. Having a simple and compelling message is therefore essential if we wish to cut through the noise that surrounds us.
We don’t have a memory like a computer as each time we recall a memory it has to be recreated and elements inevitably get changed or lost. This means our memories are heavily dependent upon what happened at the peak and at the end of an experience. Get these wrong and chances are customers will not recall an experience in a positive light. It also explains why we need to regularly repeat our brand messages through advertising and other media as our memory degrades over time.
There is also evidence that high advertising and promotional spend acts as a kind of costly signalling which demonstrates the organisation has long-term time horizons and is likely to be in good financial health. This behaviour may increase trust in the organisation or product as people interpret this as an indication of confidence about the future of the brand.
Goals Motivate People:
When we create an unmet need this forms an explicit goal (e.g. I want to have a reliable car to get to work). But for our brand (or website) to be chosen we need to communicate that we can deliver on key psychological or implicit goals, such as security and enjoyment. If we can convince customers that we are the most likely brand to meet these implicit goals we may generate an emotional response which can ultimately help close the sale.
Provided the brand is available and the experience meets our expectations this may help form a habit which creates brand loyalty. In reality though, this can be broken by lack of availability or the creation of a new habit. Indeed, if the product does not deliver what it promised we are unlikely to create a new habit and may buy another brand next time we have the same explicit goal.
Don’t Ask Why:
If asked why we purchased a product we will post-rationalise and come up with what we think are rational reasons for our choice of brand. But as we don’t have full access to our subconscious processes this is a pointless exercise. However, there are implicit forms of research that try to tap into these underlying motivations.
The funnel is dead, or at least it should be on life-support as they are a misleading way of describing the decision-making process. Funnels may also result in too much focus on customer acquisition and short-term thinking because they imply there is only one goal (conversion). Instead we should be looking to ensure our product meets the needs and expectations of customers and try to create sustainable habits to encourage brand loyalty.
Dave Trott sums it up nicely in his book One Plus One Equals Three: A Masterclass in Creative Thinking:
“The product creates the experience.
The experience creates the reputation.
The reputation creates the brand.”
Dave Trott, One Plus One Equals Three
Thank you for reading my post and if you found it of interest please share using the social media icons on this page.
Herd by Mark Earls
You can view my full Digital Marketing and Optimization Toolbox here.
To browse links to all my posts on one page please click here.
- About the author: Neal has worked in website optimization and A/B testing for over 5 years with online brands such as Deezer.com, Very, Littlewoods, Foxybingo and partypoker. Using a combination of approaches including web analytics, heuristic analysis, customer journey mapping, usability testing, and Voice of Customer tools, Neal identifies opportunities to align the website design and performance with the organisation’s business goals. This may involve A/B testing to validate the benefit of proposed changes and/or implementation of best practice recommendations.
- 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 email@example.com. You can follow Neal on Twitter @northresearch and view his LinkedIn profile.