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What Makes Online Consumer Psychology Different?

by Jimmy MacGregor on December 3, 2013

white-hat[1]

Online consumers are different from offline consumers. They might be the same people, but the screen and the distance make a huge difference to the way they approach your product, and the ways in which you can approach them.

Consumer psychology is a broad sub-category of psychology, and one which offers as many direct, useful insights as it offers broad, abstract philosophical questions. It covers questions of choice, ethics and free will, but can also explain which colour iPhone you should be promoting on the front page of your eCommerce site.

For this reason, consumer psychology straddles the line between sales and marketing in the world of commerce.

Consumer psychology in online marketing, advertising and conversion optimisation differs slightly here, in that the line between sales and marketing is removed. Sales and marketing becomes more of a spectrum, the results of this shift being profound.

To understand the difference between magazine advertising, retail advertising and online advertising, you have to understand the shift in consumer psychology.

How Does Traditional Consumer Psychology Work?

artistic ink blot test

An artistic version of the ink blot test. Image by Denise Carasco

Currently, traditional consumer psychology is viewed with a certain amount of suspicion.

In sales, its abuse is associated with cynical manipulations which can actually harm what we online marketers would call the user experience:

  • Building deliberately baffling shopping mall layouts
  • Insisting that we use brand-specific terms for lukewarm decaf lattes
  • Removing windows to prevent patrons accurately judging the passage of time

In offline marketing, it’s associated with somewhat more benign practices – framing the issues, positioning brands, reassuring existing customers and avoiding cognitive dissonance. Even there, the profession comes under fire for cynical manipulation and misinterpretation of complex data.[1]

Online marketers, especially user experience and usability experts, are probably already familiar with this dark side of consumer psychology; online, it is known as a ‘dark pattern’.

What Are Dark Patterns?

Dark patterns are built to confuse and deceive shoppers into purchasing things they didn’t need, and prevent them from protecting their privacy.

They are widely considered bad practice online for two reasons apart from the ethical considerations.

Firstly, they hurt your bottom line directly. It costs more to acquire new customers than to retain old customers. How much more is up for debate, but the difference is significant.[2]

By putting off your clients from returning by making their shop a baffling ordeal, you’re sacrificing a steady cash-flow in order to actively chase your next pay-day.

Why does this tend to affect online more than offline?

Because a large assumption in most online business models is that a certain part of the business is ‘self-sustaining’ and predictable. There are few happy accidents online now; for significant traffic, you must be famous, or easily-found by search engine, or someone actively recommended you.

There are no punters stumbling into your shop out of the rain, instead there is repeat business from a more loyal subset of customers, augmented by a slower trickle of organic traffic. Eroding this loyal subset is a great way to lose money, and also a great way to give off enough negative signals that your organic traffic will be penalised as well.

Running to get out of the rain

Running to get out of the rain. Image by Bernt Rostad.

Secondly, they hurt your brand through word of mouth. This costs you not just from the rare outspoken customer who rants about your brand at every opportunity, but also by silencing people who might otherwise talk about how great your brand is.

A customer who you automatically opt in to an email newsletter might not consciously decide that they won’t promote you, but subconsciously you’ll be off their personal list of angelic brands that can do no wrong – it won’t cross their minds to promote you, because you’ve tainted your own brand.

Why does this tend to affect online more than offline?

A successful offline advertising campaign, perhaps a nice full-page ad in an appropriate magazine, will probably attract a lot of new customers. A successful online campaign, such as a great piece of content people are eager to share, might also attract new customers; the important difference between the two cases is that people are able to comment directly on the online campaign every time it is shared.

Like it or not, and whatever you try to do, almost everything you do online can be interacted with by your customers on an equal footing. If your customers don’t like you, feel duped and unvalued, your successes will be tarnished and every failure will be magnified. Content marketing and social marketing, two of the most exciting new avenues to have been opened by digital marketing, will be pretty much closed to you.

So how do online marketers approach consumer psychology? Firstly, they add real value. Secondly, they optimise the appearance of that value.

Free as in Time or Free as in Beer?

Free is often said to have a uniquely powerful effect on the human psyche.[3]

It’s also often said to be an irrational effect – which really depends on what your goals are. A one-penny item costs infinitely more than a free item, and a one-penny item you don’t want is a loss, while a free item you don’t want is still a profit. A one-penny item when you only have one penny to spend is also a significant cost.

What’s certain is that the appreciation for free stuff goes beyond the tangible. This has been explored extensively in online gaming and distribution platforms, beyond the uber-successful freemium and free-to-play models of monetisation.

One interesting example comes from Steam, a computer gaming platform with a large community and extensive secondary economy.

In this secondary economy, there is a lively trade in both digital trading cards (which are obtained by purchasing and playing games on the Steam gaming platform) and digital hats (which are mostly obtained by playing a free-to-play game called Team Fortress 2, and can only be worn within that game).

Genuine Vox Diabolus

Clever design and a quirky sense of humour add value to this free item. Image by Joshua Livingston.

Both the trading cards and the hats are initially offered for free. Neither digital item gives you any kind of edge in any game.

In this case, we see an ingenious extension of a common practice. Usually, the vendor takes an item of notional value, and offers it for free in exchange for something they want from the customer. Steam take an item of notional value, give it away for free, and has the customer sell it for them. Once the money is in the Steam ecosystem, you can’t withdraw it – so every hat that’s sold, ostensibly from user to user, is money which has now gone to Steam.

Cards tend to fetch around 5p. On the other hand, unusual hats can easily fetch upwards of £20, being sold to other users for no other reason than to show them off in-game.

What Does This Tell Us?

Well, firstly it tells us that any item – even explicitly free items, useless in both real and game worlds, created for free and distributed at extremely low cost – can have some value.

Secondly, it tells us that getting people to actively engage with a system and protect their own investment results in free or low-cost items increasing in value.

Finally, by creating a tiered system, you can inflate the value of free items by comparing and contrasting them with another free item, even when they are broadly of the same value.

Why Won’t They Commit?

Getting a potential buyer committed can be both easier and harder online than offline.

Easier, because the consumer can feel like there’s less at stake, as though the online experience is somehow less ‘truly real’. Harder, because this means consumers can also feel like there’s less to gain.

Matrix cosplay

I don’t even see the product. All I see now is deal, coupon, leaflet. Image by Reginaldo Andrade.

This gives us two goals, to make the process more real, and to make the user feel more invested.

There are two ways we can use what we know to create this sense of commitment. Our first option is to use freebies to hook the user in, give them something tangible/visible straight away, and make them feel like they’re somewhat invested. The second option is to use quizzes and questionnaires to get the user invested through spending their personal time, making the process more real because it’s impacted their real life.

Consumers are much more prepared to participate online because they are in their comfort zone, they’re already actively interested in your product, and perhaps most importantly they’re used to interactivity. Walking down the high street, it’s surprising – perhaps even unnerving – if a stranger suddenly asks a question. Browsing online, you’re constantly solicited for your opinion, especially on social media. The quiz/questionnaire is a familiar, unsurprising format in an online context, and thus represents a great way to get someone that little bit more committed.

One other way to get people hooked – and it’s a method which can often benefit from good use of our first two methods – is to act as though your consumers are already committed.

Partly, this is because your consumers generally are already somewhat committed.

They’ve presumably invested time and effort to find your sites, however minimal that time and effort was. They’ve identified your site as a decent, trustworthy site from external impressions, and there’ll be a small amount of cognitive dissonance or at least disappointment involved in admitting that their first judgements were faulty. So treating them as though they are well on their way to making a purchase really can’t hurt, as at this point online consumers really do have a modest stake in buying from you.

The other part is that this practice helps the user to accept the decision, steering the conversation in your direction.

This can be achieved by simple steps like substituting out conditionals (like ‘if’), or it can be more subtly achieved by presenting a choice between two of your products. The intention of this is to replace the idea of choosing between buying and not buying with the idea of choosing between buying product X and buying product Y.

Perhaps most importantly, this never removes people from their comfort zone.

Sofa Surfing

The fact that people are, broadly speaking, well within their comfort zone online is an important one to take into consideration. It has a big effect on consumer psychology, making consumers more likely to make a decision rather than window shop, but less likely to fall for manipulative tricks.

Real-world tricks, like pressuring customers or attempting to disorient them in some way, are thankfully very unlikely to work online. With ample time to re-orient yourself (or simply leave a confusing site!) and very little pressure to act quickly, there’s no realistic way to use these real-world dark patterns – what Chris Hackley might call applications of the “positivistic science of ‘consumer control'”[1] ­– in an online setting.

It’s also one reason why online users can be better leads.

A user in their comfort zone, visiting you deliberately, can be treated as though they’ve already converted without seeming pushy, while the same is not necessarily true in the real world. The trick is to make the user experience seamless, so you avoid ever taking them out of their comfort zone.

Your aim in terms of user experience should be to remove obstacles and make goal completion easy, rather than to actively push the user towards completing goals they might not be interested in.

Breaking the Law

Three clicks to a product – always offer between four and six variations on a product – give the user two choices and one custom option. How useful are these ideas when it comes to online consumers?

In practice, breaking these oft-repeated ‘laws’ of online user experience can be both appropriate and helpful to the customer, and will rarely impact your bottom line. [4]

This is partly due to the fact that digital marketing is a relatively new field. Any ‘laws’ we have discovered thus far are likely to be misleading, as we lack data over a long enough time period to be able to draw firm cross-industry conclusions.

In turn, this hints at the other part of the reason these rules rarely work out; they are an attempt to suggest that intelligence, empathy and sensitivity to brand positioning aren’t as important as mechanistically following the same layout for every site.

That isn’t to say that default layouts and default setups are bad ideas; they’re great to keep in mind, or use as a basis for your site’s user experience if you don’t have a specific plan in mind. However, every business is unique, and rigidly adhering to UX formulas is a really bad idea.

The user experience is an integral part of a brand – so why, so often, is it viewed in isolation?

The Choice Delusion

The reasoning behind these laws, though, is sound. They communicate a complex concept in a short, easily-digestible package; more choice is not always good.

In fact, choice can be confusing, artificial, and arbitrary.

Tickets in both directions

You’re going to end up getting tickets, one way or another. Image by Sarah G…

It’s really worth watching Professor Iyengar’s TED talk, as it provides supporting evidence for a lot of the assumptions I’ll be making from here on down.

Iyengar provides an illuminating example of how choice is constructed based on cultural norms, in which a cornucopia of choices between different soda brands (including very different flavourings) is perceived by people from a collectivist background as being just one choice; soda, or no soda. [5]

If choice is a cultural construct, then what are your users really choosing between? Is it what you think they are choosing between?

It seems likely that users are, when they arrive on your site, considering two/three options between buying from you, buying from your competitors, and not buying anything at all.

You can narrow that choice down by presenting a range of options – already, you’ve changed the conversation from “should I buy from you?” to “which one should I buy from you?” We’ve discussed this already, including tweaks you can make based on the power of free.

Your users will, according to Professor Iyengar, be likely to be made unhappy by an abundance of choice. If they come from an individualist background, though, they will be unhappy in the short-term at a lack of choice. They’ll want ownership of a decision, almost as an ethical principle.

Your goal, then, is to narrow down choice as much as possible, while presenting enough choices that the ‘nth option’ – to completely abandon the buying process – doesn’t enter the equation. How do you do this?

The most obvious method is decoy choices. [6]

Decoy options give you the necessary sense of agency to feel good about making a decision (assuming, again, that you come from an individualist society), while reducing the number of choices so that you feel comfortable and won’t avoid the entire process completely due to a sense of loss aversion.

Not only are they extremely effective at increasing sales on their own, they can be used in combination with the anchoring effect to raise the price people are willing to pay for an item. [7]

This is what the rules listed above are useful for. If you have too many options, you will cut them down to hit the arbitrary target, eradicating many confusing or pointless options. If you have too few options, you will add extra, artificial, decoy options, giving them high price points to discourage people from actually choosing them, which will inflate the profit from your other options.

In other words, they stop you from making mistakes, rather than helping you to optimise.

How Do I Make Use of All This?

First and foremost, avoid dark patterns and optimise your users’ experience to be as smooth and hassle-free as possible. Be prepared to avoid offline tricks that work well, and favour honesty and integrity over hacks or tricks.

White Hat UX

Go for white hat user experience design. Image by Regan Walsh.

Get your users invested in your company, product and brand. This can be a time investment, a free item, or a subscription; feeling as though they have a sunk cost will help convince them to follow through.

Make sure that your users don’t come across any stumbling blocks, including too much choice. Consider offering decoy choices alongside your main offerings, to keep the conversation on your terms.

Finally, offer as much extra value as possible. Offer content, helpful advice for using the product, newsletters, digital items, real items, whatever you can.

In short; reduce friction, increase consumer investment and avoid too-good-to-be-true hacks to watch your conversions soar.

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    Comments

  • Graham Jones - Internet Psychologist

    January 29, 2014 at 7:34 am

    This is an excellent article. As a psychologist specialising in online consumer behaviour and the author of a book on the topic, I am not in complete agreement with everything you say about the psychology of online selling. However, I do agree wholeheartedly with your assertion that there is too much choice on some sites. Your point about the need for additional information, such as newsletters and so on, is vital. Studies confirm that online consumers look to these things to help reduce risk – a fundamental survival instinct that is part of our unconscious thinking. Far too few websites focus enough on the unconscious and subconscious brain activity of their visitors – something you have highlighted well here.