I recently stumbled across an article from Wired discussing how giants like Amazon and Groupon use psychology to drive sales and corner the market. The article is a few years old, so some of the ways that companies operate have changed, but the psychology behind them hasn’t. Here’s a breakdown of these concepts and how they can be used on your site and in your AdWords ads.
1. Free Shipping
This tactic gets top billing because it is the one thing that nearly all retailers can take advantage of. Even Overstock.com somehow manages to offer free shipping on orders over $50 – and they sell sofas. I imagine that it takes 3 months for your new living room set to arrive because it’s being pulled by donkeys, but you’ll not pay a dime for shipping.
Free shipping works two ways to drive sales and make consumers loyal. First, people are less likely to look for another site to buy from if you’re already offering free shipping. Additionally, if you have a threshold for free shipping, people will buy more than they planned on to get the discount. Even if shipping costs less than the additional item someone purchased to get the free shipping, people want the deal.
If you do offer free shipping, I highly recommend that you include this in your AdWords ads. It can help separate you from other advertisers, and people often use shipping costs to determine who they buy from.
2. Grease the Wheels
One way that Amazon in particular dominates is that they store people’s credit card information on their site, so once someone logs in, they can take advantage of the one-click purchase. This is ingenious, especially with digital purchases. I cannot tell you how many times I’ve clicked that wonderful time saving button to purchase an eBook.
People may say that the few minutes it takes to fill out a form to make a purchase don’t matter – but it does. If I’m on a site that I’ve shopped with before and I don’t have to find my wallet or put in a bunch of details, I’m much more likely to click through the shopping cart. Save people’s details, and make the sales process as smooth as silk for returning customers.
The Previous Visit Annotations ad extension from AdWords is helpful in getting shoppers back to your site, and be sure that you’re using cookies to save any shopping carts or selections that someone may have made, even if they didn’t make a purchase.
3. Paid Discount Services
This is another stellar idea from Amazon, but let’s face it, this is one of the reasons they’re the gargantuan mega online retailer that they are. Amazon Prime allows people to get 2 day shipping on the majority of things on the Amazon site for $79 a year. Amazon isn’t even particularly worried about the $79 – you can add up to 4 people to your Prime service, giving them free shipping as well. It’s also available to students for free, and possibly a variety of other people.
What it does is it gets people to buy nearly exclusively from Amazon since free shipping is built in. It also spurs people to buy more to get the most out of their $79 investment by getting all the free shipping they can. If you’ve got any kind of discount subscription service, it may be a good idea to throw it into an AdWords ad. If you don’t have room, consider using an ad extension, like the SiteLink Extensions or Call Out Extensions.
4. Don’t Cap Yourself
This tip is a somewhat cautionary tale. When Apple first developed the app store, it set the prices for many apps at $.99. This set a fairly low baseline, and now many people believe that the upper limit of the cost of an app should be $4.99. Another problem was and is that apps are available for free, reducing the perceived value of many paid apps. The lesson here is that it is easy to give yourself a lower limit that is hard to break out of.
However, this can be used in the other direction. One of the ridiculous time wasting but super addictive games that I play is Spirit Stones.* It’s one that features in app purchases, starting at $.99 and going up to over $100. The idea of spending more than a few dollars for a game on my phone, especially since it’s not a “full” game seems insane. That said, spending “only” $5 seems normal and rational since the upper limit is so high. Essentially, you’re making reasonablish purchases seem viable and you’re also opening the door to huge purchases, even if they are not as common.
* Seriously, it’s super addictive. Loss of home and loved ones if you install this game are not my fault.