Understanding Consumer Behavior to Convert More Customers
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 11, 2022
Understanding Consumer Behavior to Convert More Customers
When it comes to converting consumers, the secret to more sales is as simple as
understanding consumer behavior and learning what your buyer wants from your business.
Businesses often have many customers buying their products — or at least too many to get
to know each personally. When that’s the case, what’s to be done? The answer: Turn to
rigorously tested research on consumer behavior.
We are all different, but in many instances our brains are prone to react in a similar
manner. Understanding these subtleties in the human mind can help your business find
creative ways to ethically move more buyers towards saying “Yes!” to your products or
services.
This resource includes 10 consumer behavior studies that reveal such insights into the
minds of your customers.
1. Analysis paralysis and consumer behavior
We all know that small things make a big difference when it comes to copywriting.
Interesting research on consumer behavior by Dr. Robert Cialdini, Professor of Psychology at
Arizona State University, examined the donation process of the American Cancer Society
and how a minute change delivered drastically different results.
The research also reveals why it’s important to analyze why people say “no” rather than
always looking at why they say “yes.”
Below are two phrases used to wrap up a door-to-door donation request. Researchers
tested the effect of the slight variation in wording:
"Would you be willing to help by giving a donation?"
"Would you be willing to help by giving a donation? Every penny will help."
Subtle difference, right?
The wording may be subtle, but the resulting effect was drastic: People who were asked
the second variation were almost twice as likely to donate.
move. When making a request for people to take action, clearly identify a minimum in
order to help people break through “action paralysis.”
2. Embrace the power of internal labels
Consumer behavior research has shown that people like being labeled and are more
inclined to participate if they feel included.
A 2011 study examined the voting patterns of 133 adults to see if labeling them had any
affect on their turnout at the polls.
After being casually questioned about their regular voting patterns, half of the
participants were told that they were much more likely to vote since they had been deemed
by the researchers to be more politically active. This wasn’t actually true; these people were
selected at random.
The other half of the participants weren’t told anything; they were just asked to
describe their voting patterns.
Despite this random selection, the group that was told they were “politically active” had
a 15% higher turnout than the other group.
Our brain seeks to maintain a sense of consistency (even if it’s artificial), and this is why
the foot-in-the-door technique works so well even on prepared minds.
We enjoy being consistent so much that even being told we are a part of a group makes
us more receptive to its message, as long as it’s something we approve of (like being a
responsible voter). This is why “gold” or “platinum” status works effectively for a customer
loyalty program.
People who are labeled as “superior” consumers tend to spend more, and those in the
“regular” class aren’t affected.
The Bottom Line: Don’t be afraid to label your customers. People like being part of
groups that imply some superior quality or level of status that has their approval. Even when
given an artificial reason, people tend to take action in order to feel they belong to an
“elite” group of people.
3. Understand the three types of buyers
No matter what industry you operate in, consumer behavior research shows that there
are three groups of buyers who can be characterized by the “pain” they experience when
purchasing something.
Neuroscientists have defined human spending patterns as a process of “spend ‘til it
hurts,” so understanding these different levels of pain points is essential to maximizing your
potential sales:
Unconflicted (61%): Average spenders.
Spendthrifts (15%): People who are able to spend more before they hit their
maximum buying pain.
Tightwads (24%): People who spend less (on average) before they hit their maximum
buying pain.
So which type of buyer is most difficult to convert? The tightwads.
Since they comprise nearly a quarter of your potential customers, you should learn
some of the smart techniques to minimize buying pain for your “tightwad” customers.
Fortunately, the secret boils down to utilizing well-written copy that appeals to their
apprehensive nature. According to some remarkable neuroimaging studies, minimizing
buying pain for tightwads (and everybody else) can be successfully accomplished by
incorporating three simple strategies.
Reframing value
If you see a product that costs $1,000 per year, you’d definitely approach the purchase
with a little caution, right?
That’s because $1,000/year isn’t peanuts. To make matters worse, it seems like a HUGE
amount of money for conservative spenders.
What if the product was just $84 per month instead? Not bad, right?
The thing is, $84/month is the same as $1,000/year.
While this reframing method is effective for buyers of all types, it is most effective when
targeting conservative spenders. If you’re offering something that has a recurring cost or
that can be broken down into smaller increments, be sure to investigate how you can utilize
this information in your pricing model.
Reduce pain points with bundling
Neuroeconomics expert George Loewenstein notes that all consumers (especially
conservative spenders) prefer to complete their purchase in one easy fell swoop rather than
purchase multiple accessories separately.
He cites customers’ willingness to upgrade car packages all at once but points out how
difficult it often is for the brain to justify each individual upgrade (“Yes, I will pay extra for
navigation ... and ... seats ... and ...,” etc).
These individual purchases create individual pain points, whereas a bundled purchase
creates only one pain point, even if the price is much greater.
Loewenstein’s research shows why many consumers are willing to pay more for
complete bundles rather than chasing down individual products and accessories: Not only is
it less of a hassle, but it also results in fewer purchase pain points.
Sweat the small stuff
We all know the old adage “don’t sweat the small stuff” isn’t all that applicable to
crafting effective copy — but how small of a change matters?
One of the goofiest conversion bumps ever is a study done by Carnegie Mellon
University that reveals the impact of a single word on conversion rates.
Researchers changed the description of an overnight shipping charge on a free DVD trial
offer from “a $5 fee” to “a small $5 fee” and increased the response rate among "tightwads"
by 20 percent.
4. Highlight strengths by admitting shortcomings
Is it ever a good idea to admit to your faults? After all, people don’t want the “real” you,
right?
Consumer behavior research from social psychologist Fiona Lee states that admitting
shortcomings is a great way to simultaneously highlight your strengths.
Lee’s study aimed to measure the effects of admitting to missteps and faults and how
these actions would affect stock prices. Experimenters read one of two fictitious company
reports; both reports listed reasons why the company had performed poorly last year.
The first report placed emphasis on strategic decisions.
The second placed emphasis on external events (e.g, the economy, the competition,
etc.).
The test subjects viewed the first company far more favorably than the second.
Admitting to shortcomings in areas like strategic thinking showcased that the company was
still in control despite their faults. After examining hundreds of these types of statements,
Lee found that the companies who admitted to their strategic faults also had higher stock
prices the following year.
When blaming external forces (even if they happened to be true), companies gave
skeptics a reason to view them as not having the ability to fix the problem, in addition to the
consideration that they might just be making excuses. The Bottom Line: Admitting to honest
errors in judgment helps your customers understand that you are still in control of the
situation and not prone to making excuses.
