7 Psychological Sales Hacks to Guarantee a Boost in the New Year
Most people don’t have a traffic problem. Rather, they have a sales conversion problem.
According to research from Episerver, up to 98% of website visitors don't purchase on their first visit..
I'll let that sink in…
Another study by Eisenberg Holdings shows that for every $92 businesses spend to generate website traffic, they spend just $1 trying to convert that traffic into sales.
In essence, many businesses have a lot of traffic that translates into very few sales. Unless you revise your approach, sales will remain static in the new year. The following seven hacks are guaranteed to give you a serious sales boost.
Segment and Target
The past few years have resulted in a lot of marketing automation breakthroughs. Unfortunately, though, many businesses are still yet to embrace marketing automation, especially when it comes to segmenting and targeting users based on interests and other factors -- mainly because they don’t know how important it is.
Consider the following statistics:
- A study by Marketing Sherpa found that by segmenting email subscribers and sending them targeted emails, compared to just sending all subscribers the same email, you can boost conversions by up to 208%.
- MailChimp, using email data based on email sent to over 9 million people, compared the results of segmented email campaigns to that of non-segmented email campaigns: on average, they found that businesses record a 14.31% higher open rate, 100.95% higher click through rate and 9.37% lower unsubscribe rate when they send emails to segmented subscribers compared to non-segmented subscribers.
Looking at the above statistics, we can safely and conclusively say that segmenting is much more effective than not segmenting.
In the New Year, when it comes to how your offers are being presented to users, both on your site and in your emails, try to segment and only send targeted emails: segment and target subscribers based on interest, gender and user activity. Someone who has bought 10 products from you should not be treated as someone who is yet to buy any; they should be segmented and interacted with separately.
For more on this subject, check out WIshpond's Complete Guide to Lead Segmentation.
Use Anchoring to Improve Your Product’s Perceived Value
Is your product cheap or expensive?
While it’s easy to come up with a quick answer, it’s not that simple: the perceived value of your product is relative to that of other products similar to it.
If you’re the only one selling a particular thing, then you can probably get away with charging a lot for it. If, however, you are one of about 100 people selling a particular thing, the price you can get away with charging will be relative to what others charge.
The solution then, to drive more sales and command higher prices, is to use anchoring to position your product in such a way that people compare it to a more expensive product of your choosing instead of general products being sold at a cheaper rate. For example, although iPhones and Samsung phones are both smartphones, people don’t go ahead comparing iPhones to Samsung phones when they purchase -- Apple has so positioned it that people compare the cost of one Apple phone to another instead of a competitor’s devices.
Sometimes, when trying to “anchor” your product, you want to be even more specific. For example, if the product you are selling costs $49 and you feel it is worth $490, you want to establish this fact -- this way, instead of people thinking, “Hey, isn’t $49 too expensive for XYZ product?” they think, “Hey, wait, I’m suddenly getting this product worth $490 for $49. This isn’t a deal I can miss.”
Use Authority & Social Proof
What is the value of authority social proof? For T-FAL ActiFry, a lucky company that had Oprah Winfrey’s endorsement, it was worth $150 million. On February 15, 2013, Oprah went on to social media to tell people that the appliance changed her life, and that simple endorsement increased T-FAL’s share value by over $150 million.
Now, that scenario is not realistic or replicable for most businesses. However, the lesson stands: authority endorsement can be very powerful for boosting sales. Most authorities and influencers have a metaphorical midas touch, especially when businesses they endorse can capitalize on this.
While you probably won’t get Oprah’s endorsement, it won’t be impossible to get a known influencer (could be a blogger, media personality, etc) in your field to endorse you. Or perhaps you have gotten featured on a top industry blog or media publication. These are all forms of authority endorsements that can seriously boost your bottom line. In fact, including social proof and testimonials, especially from authority figures, is one of the features of a good sales portfolio. So if you are yet to, it might be a good idea to whip out your “As seen on…” logos and see how that translates to an increase in sales for you.
The Paradox of Choice
For a very long time, experts argued that to get more sales in ecommerce you simply present people with more options -- because the more options they get to choose from the higher their probability of doing business with you. While that is true in some cases, it isn’t always the case; in fact, in almost every situation, especially when it comes to the point where you have to close the sale, it is always a good idea to present people with a few very good options.
In his book The Paradox of Choice, American psychologist Barry Schwartz argued that there’s a limit to the number of choices you can present people without mentally paralyzing them. At a point, when they have too much to choose from they become paralyzed with indecision and simply decide not to make any choice at all.
Schwartz backed up his point with a lot of studies, but perhaps the one that stands out the most is the famous jam study by Sheena Iyengar and Mark Lepper. In the study, which took place in an upscale grocery store, the researchers presented an almost-evenly distributed group of shoppers with two different display tables; the first group was presented with a table that displayed 24 varieties of gourmet jam while the second group was presented with a table that displayed six varieties of jam. The table with more varieties of jam attracted more viewers, but the table with fewer varieties resulted in 10 times the sales the table with more varieties of jam got.
The jam study established a fact: when it comes to boosting sales, more isn’t always better. When it comes to the metric that matters most (ROI) it might be a good idea to give people fewer, targeted options.
Don’t Use Red or Orange -- Understand Sensory Adaptation Instead
One of the biggest debates when it comes to conversion rate optimization and boosting sales is that of button color. Experts are divided over which button color converts best. Some say red; some, orange. And then some say green. In reality, though, none of these colors convert better than another. The reason why one color usually outperforms the other in split testing experiments can be explained by the psychology phenomenon of sensory adaptation.
Before I explain how sensory adaptation works, let’s take a look at one such famous experiment that concluded that the red button converts better:
Upon careful analysis of the landing pages used in the experiment (see screenshot above) , you'll quickly notice that the red button stands out -- because it was used on a page with a mainly-green color scheme. The green button, however, was also used on a page with a mainly-green color scheme, so it blends in. That, in a nutshell, explains sensory adaptation: things tend to blend in after we’ve been exposed to them for awhile, and as a result we “adapt” to them and tune them out.
In essence, your neighbor’s dog that never stops barking that you no longer notice, your shoes or clothes that you stop feeling after a while, and why your body automatically adapts to warm/slightly hot water after it stays in it for a while... this is all explained by sensory adaptation, and the same principle can be used to boost your sales in the New Year.
Instead of asking whether you should use the red or green button for your CTAs, first ask yourself what color scheme you are using and whether the CTA color of your choice blends in or stands out.
Don’t Discount the Follow Up
In psychology, there is a phenomenon called the “mere-exposure effect” or the “familiarity principle.” The power of the mere-exposure effect is adeptly demonstrated through a 1968 experiment by an Oregon State University professor, Charles Goetzinger, in what many know as the “black bag experiment.”
In the experiment, Goetzinger had a student come to class dressed in a large black bag. To other students in the class, only the feet of the student in the black bag was visible. At first, the other students treated the black bag with hostility. The more the black bag showed up in class, though, the more they started to treat it with curiosity. Eventually, they came to like the black bag.
This experiment shows that familiarity breeds content, not contempt.
Don’t expect a lot of people to warm up to your sales attempts the very first time -- research has shown that, in most cases, only 2% of visitors to a website will purchase on their first visit. The remaining 98% are gone, and if there’s no way to reach out to them then they are gone forever.
There’s also the rule of 7 that states that people need to see your message seven times before they warm up to it.
Armed with this knowledge, focus on building a prospect list that allows you to follow up with prospects -- and, as long as the offer you are making is targeted and relevant to them, do not hesitate to reach out to them more than once. Ecommerce giant Amazon does this really well -- a user once went to research digital cameras on their site. Although he didn’t make a purchase, Amazon sent him nine follow up emails promoting offers related to digital cameras.
Understand the Role Context Plays in People’s Buying Decisions
Take a look at the images below...
First take a look at this image:
Now this one:
Okay, now take a look at this image:
Now, what do you see in the image below?
In the first example (12, 13, 14), when the single figure/letter was presented you most likely saw the figure “13.” In the second example, however, you most likely saw the letter “B.” What you saw was influenced by the context surrounding it.
Context can be very powerful for boosting sales. For example, an Apple device -- with all the same features and design -- could be rebranded to bear Samsung’s brand and wouldn't command half the price it would if it had Apple’s branding. This is because of the context in which it is being sold.
A notable experiment demonstrating the power of context in influencing sales was one conducted by economist Richard Thaler where subjects were asked how much they were willing to pay for beer. The subjects were split into two groups. The first group was told that the beer was coming from a local grocery store. The second group was told that the beer was coming from a fancy hotel. The study found that people were willing to pay much more for the same beer when they were told it would come from a fancy hotel than if they were told that it would come from a local grocery store.
Be conscious of your positioning and the context in which people perceive your brand. It’s easy to offer discounts regularly, but if that sends a message that you’re cheap then it would be difficult to sell high-ticket items.
Sometimes we obsess over metrics like traffic and reach -- while these metrics are good, having more of them does not necessarily correlate with having a good ROI. Boosting your conversion rates will almost always translate to an increase in revenue and ROI, though. Be sure to use the above seven hacks to increase your sales in the New Year.
John Stevens is the founder and CEO of Hosting Facts. When he’s not grooming his beard, John is working hard to get more visibility and traffic. Feel free to contact him directly at firstname.lastname@example.org.