Nobody enjoys losing. But did you know that you can take advantage of your visitors' inherent fear of missing out in your online store?
At Ometria’s latest breakfast seminar, renowned ecommerce expert Dr Mike Baxter offered some hints and tips about drawing on your visitors’ fear of losing (or loss aversion) to increase conversions, alongside a whole bunch of other ecommerce ‘hacks’ (now available in a free downloadable ebook called 12 Things You Can Start Tomorrow To Accelerate Your Ecommerce Business.)
In the video (a transcript of which is available below), Mike covers some simple ways in which you can harness this powerful cognitive bias to encourage visitors to make a purchase.
One of my favourite books in the past few years has been Daniel Kahneman’s Thinking Fast and Slow - a book all about the cognitive biases that come to play in our everyday decision making.
One of the most powerful cognitive biases is called loss aversion. So, for example, if I say to you I would like to sell you this presentation clicker and I charge you £5 for it and then I say ‘can I buy it back from you?’, you’d probably want to charge me £6. Because it’s yours. And loss aversion is so powerful that in a simple transaction like ‘sell it and buy it back’, people tend to want more - if they have any sense of ownership of the thing they’ve just bought then loss aversion is a real killer.
Now loss aversion on a website can be used in things like ‘only three left’. So you think ‘oh blimey I’d better buy it now because if I go and have a coffee and come back I might miss it.’ Same goes for ‘free shipping ends in three days, 22 hours, 12 minutes and 43 seconds’ etc. So just simple things like that will instill a sense of ‘I’d better do it now else I might miss out’. And that is a very powerful cognitive bias.”