I sat in an interesting SXSW panel today called Using Psycology to Increase e-Commerce Conversion. While this may sound like a complex topic, it’s really quite simple…too many companies focus attention only on their competitors to innovate and miss out on other opportunities for better efficiencies because their focus is too narrow.
One key to marketing and business success is to analyze and understand why something is working, and then apply that understanding to your own projects. This “something” can be in your own industry but in many cases it will not be.
The first example the presenter provided was in an area where many businesses fail, the complexity of choice. The study he used was an experiment to determine if having more choices or less choices was helpful for a consumer and which one lead to an increase in revenue.
The setup for the choice study was using a table at a grocery store and offering 24 samples of jam versus a sample table with only six choices. Throughout the experiment the table with 24 samples brought in more people who wanted a sample, but the overall sales were actually smaller than the table with six samples. The learning being, overwhelming choice decreases conversion rate. An enormous amount of choices can actually be roadblocks to sales.
Now if you work at a grocery store or for a jam company, this example is fantastic. If you don’t, the study is still valuable. In this case, the presenter applied it to his e-commerce company and they simply lowered the amount of product choices that they offered shoppers and they increased both conversion rates and sales.
The takeaway from the presewntation is that you need to be looking beyond your own business category for improving your business. Expand your knowledge to see what successful businesses are doing, apply the concept, and you’ll reap the reswards as well.