Applying cognitive biases to optimize conversions

Designing with
cognitive biases in mind
and how to apply CRO
Michael Gearon @michaelgearon

Which one has the higher purchase
intent, left or right?

Compared with the picture on
the left it resulted in a 20 per
cent uplift in purchase
intention (for right handed-
participants)

This effect is known as perceptual
fluency, because it’s what we are
familiar with requires less effort to
process and is therefore valued more
highlight by the autopilot.

ABOUT ME
Previously worked at BrandContent, GoCompare
Group and HEOR.
Been published in NetMag and other online
publications for my work around accessibility
and neuromarketing
Currently work for Companies House as a Senior
Interaction Designer

1. The fundamentals of CRO testing, why should you
care and how to get started with CRO
2. The psychology behind the click, why do people
buy from your competitors but not you?
3. Examples of good and bad website design for CRO
optimisation.
WHAT WILL WE COVER?
mg@michaelgearon.co.uk@michaelgearon

It doesn’t matter how amazing your website
is at getting traffic or on how “trend” it is, if
those people don’t convert. Sorry.

What is CRO?

What is Conversion?

• CRO = Conversion Rate
Optimisation
• It’s a way in which to test ideas,
measure the impact and work out
whether that idea is worth
investing into.
• CRO focuses on optimising the
onsite experience and a vital tool to
get you, the designer, closer to the
customer.
• What you measure as success is up
to you.

There are 3 components to
CRO testing:
• Design (UX)
• Content
• Analytics
• Bonus part: Psychology

• A/B Testing: The most simplest type of
testing, it involves selecting a page then
changing one element between the
control/original and the new variant. You
then test each version simultaneously with
equal traffic split between them to
determine which variant leads to your
goal.
• In multivariate testing, traffic is also
equally diverted to different versions of a
page. However, instead of comparing two
elements, multivariate testing allows you
to create and test different combinations
of elements against the conversion goal.

Why bother with CRO?
• CRO is cost-effective and grows your
business from the traffic you already
have.
• Investing in CRO means that you can
confidently invest in growth strategies
knowing that you’re sending traffic to a
site optimised for conversions.
• If you choose to engage in marketing
without optimisation first, your efforts
are bound to be only marginally
effective.

Get idea > Decide whether to implement > Implement It
Get idea > Implement It (as a Test) > Decide whether to keep it
Before
After

Avoid small, pointless tests.

“What” happened is not good enough,
you have to understand the “why”

“Test counterintuitive
things, because your
competitors won’t” -
Roary Sutherland

Cognitive Biases

We’ll be looking at just 6 biases but there are 100s of
ways to increase conversion rate.

1. The Pain of Payment

• NYU Stern School of Business said
that paying by credit card people
treat money as “monopoly money”
• People paying with cash typically
overestimated their spend by 9%
• In contrast those who used credit
cards underestimated by 5%
• This perceived value can make a
massive difference in the shopper
memory between whether that
purchase expensive or cheap

• 34% of shoppers abandon checkout
because they are forced to create an
account.
• 25% of websites don’t offer a guest
checkout.
• Make the checkout process as easy
as possible.
• Don’t ask for details you don’t need.
• If possible try and fill in the gaps and
don’t prevent features like autofill

• Invest time in adopting Apple Pay
and Google Pay on your website.
• Optimise your checkout process,
make it is as easy as possible for
people to buy
• Experiment: try removing pound
signs from your product pages.
Studies have shown an 8%
increase sales when the pound
sign has been removed from
restaurant menus

2. The Anchoring Effect

• Anchoring or focalism is a
cognitive bias that influencing
our decision-making abilities.
• Typically, the first bit of
information we receive
becomes an anchor and all
future evaluations are based on
this anchor piece of
information.

8 x 7 x 6 x 5 x 4 x 3 x 2 x 1
1 x 2 x 3 x 4 x 5 x 6 x 7 x 8
Median of: 2,250
Median of: 512
Daniel Kahneman and Amos Tversky - September 27th 1974

An experiment was conducted where
they showed prices from low to high
and then high to low.
They found that:
Low > High Average Sale was $5.78
High > Low Average Sales was $6.02
Result? An extra $0.24 (on average)
for every beer sold.

Option 1:
Subscription for
online at
$59.00
Option 2:
Subscription for
print at
$125.00
Option 3:
Subscription for
print and online at
$125.00
16% sign up 0% sign up 84% sign up
Dan Ariely - Decoy effect

Option 1:
Subscription for
online at
$59.00
Option 2:
Subscription for
print and online at
$125.00
68% sign up 32% sign up
Dan Ariely - Decoy effect

People don’t actually know what
they really want!

WHAT IS THE COST OF
THIS JACKET?
£300
£180

• When trying to sell a product we base
on assumptions on whether something
is “cheap” or “expensive” based on
comparison or historic purchase.
• Experiment: if you're running a sale on
your website then show the original
price (crossed out) and show the new
price next to it.
• Experiment: if you offer a service try
multiple price points a cheap, mid-
price, and high-end price point

http://bit.ly/2Xc5V75

3. Post-Purchase Rationalisation

I brought this because….

• Younger people are more likely to
spend unnecessarily than older
because the older you get the more
you have buyer’s remorse
• Over 50% of people often or
sometimes feel buyer’s remorse
• It’s almost uncomfortable for a person
to face their own truths when do they
do purchase an item because it may
defied their financial boundaries,
mental boundaries or consumption
boundaries.

• To prevent returns and people
questioning whether they made the
right decision then make sure your after
purchase experience is as good as the
before purchase.
• Engage with your new customers, don’t
just drop them off at the other end now
they’ve brought your product. Through
social media, email and other
communications make it feel they are a
valued customer. It’s far easier to
maintain and resell to existing
customers than it is to acquire new
customers.

http://bit.ly/2VS8Ku1

4. Discounts and promotions on
landing pages

1. Communicate site-wide
promotions
2. Make users aware of offers,
what they need to do to qualify
for it such as minimum-spend.
3. For minimum-spend
promotions, do the math for
potential customers and help
them reach the spending
target

1. List discounted items in both
the sales and in appropriate
categories pages (not
everyone seeks a discount)
2. Be clear about restrictions on
promotions upfront
3. Remind users about available
special offers they can qualify
for in the shopping cart

1. If you offer discounts or
incentives then make sure it’s
clearly shown such as in the
header
2. Make sure that those incentives
are shown through the whole
checkout journey

5. “Nudge” people towards the end goal

Recent academic studies in cognitive
psychology, social psychology and
behavioural economics suggest that over
90% of our decision-making is conducted
somewhat unconsciously and
automatically on a daily basis.

A nudge is any factor that
significantly alters the behaviour
of humans. To count as a nudge,
the intervention must be easy
and cheap to avoid. Putting the
fruit at eye level while it
encourages for it to be picked up
or bought counts as nudge.
Banning junk food does not
— Richard Thaler, Nudge

• 80% of shoppers are more likely to buy
from a company that offers personalised
experiences (Epsilon Marketing, Power of
Me - 2017)
• 98% of marketers see personalisation helps
advance customer relationships (Evergage,
Trends in Personalisation Survey - 2018)
• 53% - Report increases over 10% on main
KPIs including conversion rate, lead
generation, and revenue (Evergage, Trends
in Personalisation Survey - 2018)
• 170% - Increase in purchase rate of
personalised product recommendations
compared to non-personalized product
recommendation (Barilliance - 2014)

Amazon claims that 35% of their sales come from these
recommendations.
Customers seem to like it, too, with 56% of them being more likely to
return to a website that has personal recommendations.

• “Recently viewed” or “previous
browsing history”
• It creates that “personal”
feeling
• If people close a tab or think
they preferred something they
clicked on earlier it’s easy to
get back to that item.

6. The Bandwagon Effect and Social Proof

Baymard Institute did an amazing research and
found out that 95% of users relied on reviews to
learn more about products.

4.5-star rating average based on 50 reviews performed better
than perfect 5-star ratings that were only based on a few
reviews – they simply didn’t find the latter to be trustworthy.
Based on 4 people
Based on 50 people

The human understanding when it
has once adopted an opinion
(either as being the received
opinion or as being agreeable to
itself) draws all things else to
support and agree with it.

Social Proof - Tonbridge, Kent

Opower - reducing energy usage
It had the same
impact on reducing
energy consumption
as a price increase of
20 per cent

• The psychological implications of
this social proof bias is that we tend
to go along with the majority rather
than branching out on our own.
• The best type of social proof is one
that a person can relate to. If they
can see that a person was in a similar
situation and this product solved the
problem for them then you will hook
the potential customer.
• “When you say it, it’s marketing.
When your customer says it, it’s
social proof.” - Andy Crestodina

To recap…

CRO is a must.

3. Post Purchase Rationalisation

5. “Nudge” people toward the end goal

6. The Bandwagon Effect and social
proof

Additional info…

https://amzn.to/2Vd6Kzr

https://amzn.to/2Vad8XO

https://amzn.to/2Zeh0qh

Thank you for your time,
any questions?
Michael Gearon @michaelgearon

Applying cognitive biases to optimize conversions

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