Customer’s decisions are only in part driven by logic, prices, and demand. More often than not they are subject to certain types of biases that tend to tip the choice either way. As designers, we are responsible for designing products in a transparent way, in the customer’s best interest, while taking into account business requirements.
Generally, adhering to the principles above generates the best long-term return on investment, because it follows the rule of reciprocity; customers get what they want, you sell a product at a profit, everyone is happy. But that’s just the theory.
In practice, it’s very easy to forget that design for the good of the user can be twisted and used for short-term gain. Below, you’ll find five powerful biases and effects that need to be taken into account when designing digital products in the best interest of your customers and, by extension, in the best interest of your business.
According to studies on the impact of negativity on customer decision-making process, researchers found out that customers are less likely to buy products on bad news, but sadly this isn’t reversed when the good news break out about the company or the products.
- Make sure to put emphasis on the positive effects of your product to offset the negativity bias. We’re a stubborn species and need a nudge from time to time.
- Create a plan to battle the negativity that might surface. You never know when something breaks or fails and ruins a customer’s day.
We love choice. In fact, we love it so much that we subconsciously crave as much choice as possible. But too much choice will lead us to indecision and, by extension, to lower sales. Have you ever tried to pick something to watch on a Friday night? The amount of titles on Netflix is quite overwhelming and sometimes ends up with us wasting time looking for that “perfect match” for our mood and interest.
- Try to apply the minimum amount of choice required in a given context (product choice, payment options, upgrade offers, etc).
- Focus on your core product offering instead of chasing every option possible. A lack of focus in product design will be inherently passed onto your customers.
- Reducing choice at specific intervals in your product user flow that currently results in the highest drop-off rates will improve conversions.
- You’ll have to spend more money on marketing the differences between your subscription tiers or product variants the more of them you offer.
Round Price Preference
There’s one thing we certainly pay special attention to when buying products and services: price simplicity. Latest research on the topic of pricing proves we perceive round numbers as more trustworthy and representing higher quality.
That’s right, when choosing between two similar items at prices of $7.99 and $8, we’re more inclined to pick the one costing a cent more. We also tend to round restaurant bills so instead of $43.67 we pay a round $50, treating the difference as a tip.
Ever tried to squeeze in just a tad more fuel out of a pump nozzle at a petrol station just to get to a round price point?
- Simplify your pricing structure. Instead of offering a monthly subscription plan of $4.99, just round it up to $5 and call it a day. Your accountants will thank you, your customers will thank you, and your MRR (Monthly Recurring Revenue) will thank you as well.
- In addition to the positive effect on your bank balances, consider the positive impact of price rounding on the perception of your brand.
In a fascinating research on the effects of shopping at IKEA, two groups of people were given the same IKEA product with a key difference. One group received the product ready-to-use (preassembled), while the other group had to put it together themselves.
At the end, participants were asked to value the finished product, and surprisingly those who succeeded at assembling the product themselves put a much higher price on it than those who received a preassembled item.
Turns out our efforts lead to increased valuation only when we successfully complete tasks, because when the same research participants were asked to destroy their creations or did not assemble them in the first place, the IKEA effect was gone.
- Find out how you can add a bit of labour to your product experience, for example by offering personalisation options early in the user flow. The sense of ownership will reduce conversion drop-off later in the process as well as may have impact on lowering the buyer’s remorse effect.
Social Default Bias
When we’re stuck and can’t make an informed decision about a product or service, we default to our peers and tend to follow the crowd. This powerful bias is often exploited in a form of aggregated reviews or ratings on a website, and tends to apply when no one is watching, as we don’t want to show that we copy others’ choices. We want to save our face.
- Brand loyalty negates social defaults, and we tend to pick what we’re familiar with anyway, so beware of this.
- Highlighting top sellers and most popular options in a category your users are interested in is a good idea to steer them towards buying a particular item.
- This works best in private, so email marketing and online sales might be the best place to put it to use.
There are many more biases that we as customers are subject to every day. The list above is definitely not exhaustive, and barely scratches the surface of behavioural science, but it should give you an idea of how powerful these insights could be.
- Negativity Bias, Negativity Dominance, and Contagion (PDF)
- Thinking Fast And Slow (Book)
- Do consumers prefer round prices? Evidence from pay-what-you-want decisions and self-pumped gasoline purchases (Article)
- The Paradox of Choice: Why More Is Less (Book)
- The “IKEA Effect”: When Labor Leads to Love (PDF)
- Social Influence: Compliance and Conformity (PDF)