The psychology of successful ecommerce

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@NATHALIENAHAITHE WEB PSYCHOLOGIST LTD.
Psychological PRINCIPLES
5
OF

Let’s start with a little experiment

EXPERIMENT
Nunes, J. C., & Drèze, X. (2006). The endowed progress effect: How artificial advancement increases effort. Journal of Consumer Research,
32(4), 504-512.
Randomly distribute 300 loyalty cards
to customers at a car wash

HALF GETS THIS
32(4), 504-512.
Collect 8 stamps, get
1 FREE car wash

OTHER HALF GETS THIS
32(4), 504-512.
1 FREE car wash

Which has the highest redemption rate?

8 STAMPS?
32(4), 504-512.
1 FREE car wash

10 STAMPS?
32(4), 504-512.
1 FREE car wash

RESULTS
19%
34%
8 stamps 10 stamps
Redemptionrate

WHAT HAPPENED?
32(4), 504-512.
Task requiring
8 steps

WHAT HAPPENED?
Task requiring
8 steps
32(4), 504-512.
Task requiring
10 steps
(2 completed)

WHAT HAPPENED?
Reframed the task so one was
perceived as undertaken & incomplete
(rather than not yet begun)
32(4), 504-512.

http://www.londonreal.tv/

How does it work?

1
People provided with
artificial advancement toward a
goal exhibit greater persistence
toward reaching that goal
“ ”
Nunes, J. C., & Drèze, X. (2006). The endowed progress effect: How artificial advancement increases effort.
Journal of Consumer Research, 32(4), 504-512.

ENDOWED PROGRESS
1

CONSISTENCY
We’re naturally motivated to
complete tasks we’ve started & want to
remain consistent with previous intentions
Fox, S. & Hoffman, M. (2002). Escalation Behavior as a Specific Case of Goal-Directed Activity: A Persistence Paradigm. Basic and Applied
Social Psychology, 24 (4), 273-285.

PROXIMITY
The closer we are to completing a
goal the more likely we are to increase our
efforts to close the last little gap
Hull, C. L. (1932). The goal-gradient hypothesis and maze learning. Psychological Review, 39(1), 25.

TRIGGERS
Giving people a couple of free holes on a punch
card is enough to trigger both of these effects

WHY IT’S USEFUL
32(4), 504-512.
• Increases the likelihood of task completion

WHY IT’S USEFUL
32(4), 504-512.
• Increases the likelihood of task completion
• Decreases completion time

HOW TO USE IT
• Incentivise users to take the first step

HOW TO USE IT
• Give them a head start towards reaching
their goal

HOW TO USE IT
• Give them a head start towards reaching
their goal (e.g. money off first purchase, or
download now to jump up a level)

This triggers the next principle

2
“ ”
van Putten, M., Zeelenberg, M., & van Dijk, E. (2010). Who throws good money after bad? Action vs. state
orientation moderates the sunk cost fallacy. Judgment and Decision Making, 5(1), 33.
The tendency to continue an
endeavour once an investment in
money, effort, or time has been made

Sunk-cost fallacy
2

GAMING
Player is more likely to return to look after items
they have been endowed (paid for / earned)
than goods they’ve simply been given
Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. The Journal Of
Economic Perspectives, 193-206.

SUNK-COST FALLACY
Rational player:
Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior And Human Decision Processes, 35(1), 124-140.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica: Journal of the Econometric Society,
263-291.

SUNK-COST FALLACY
Rational player: would ignore sunk-costs
263-291.

SUNK-COST FALLACY
Real player:
263-291.

SUNK-COST FALLACY
Real player: reluctant to discontinue an activity
once they’ve already put effort in
263-291.

Which is why this works

https://www.facebook.com/FarmVille

SUNK-COST FALLACY
263-291.
The sunk-cost of planting the tomatoes
increases your desire to continue the game

The same is true for other products

When people start interacting with you,
how do you get them to come back for more?

3
“ ”
At a predetermined time / place,
the user must login or participate
for positive effect

Appointment dynamic
3

APPOINTMENT DYNAMIC
Keeps the customer coming back for more,
creating a habitual pattern of use

How these work together

Endowed progress
Customer is helped to begin

Endowed progress
Consistency
Initial intention
fuels desire to
complete

Endowed progress
Consistency
Initial intention
fuels desire to
complete
Sunk-cost fallacy
Encourages further investment

Endowed progress
Appointment
dynamic
Habitual use is
reinforced
Consistency
Initial intention
fuels desire to
complete
Sunk-cost fallacy
Encourages further investment

HOW TO USE IT
• Research what motivates your users

HOW TO USE IT
• Give relevant initial progress for free (e.g.
points, upgrade, virtual currency / product)

HOW TO USE IT
• Give relevant initial progress for free (e.g.
points, upgrade, virtual currency / product)
• Use these principles to create a user
journey that encourages completion

COGNITIVE LOAD
4

4
“ ”
The load that performing a
particular task imposes on
your cognitive system
Paas, F. G., & Van Merriënboer, J. J. (1994). Instructional control of cognitive load in the training of complex
cognitive tasks. Educational psychology review, 6(4), 351-371.

COGNITIVE LOAD
The total amount of mental effort being
used in your working memory

COGNITIVE LOAD
• We have a limited capacity for cognitive
processing

COGNITIVE LOAD
• We have a limited capacity for cognitive
processing
• To encourage conversion, you have to
lower the mental effort

http://kylerush.net/blog/meet-the-obama-campaigns-250-million-fundraising-platform/

HOW TO USE IT
• Reduce number of actions required to
achieve the goal

HOW TO USE IT
achieve the goal
• Split complex processes into single steps

HOW TO USE IT
achieve the goal
• Split complex processes into single steps
• Minimise visual clutter by chunking design
elements together

PROCESSING FLUENCY
5

5
“ ”
The ease with which people
process information
Alter, A. L., & Oppenheimer, D. M. (2009). Uniting the tribes of fluency to form a metacognitive nation. Personality
and social psychology review.

PROCESSING FLUENCY
• Conceptual: Semantic priming

PROCESSING FLUENCY
• Perceptual: Visual clarity

PROCESSING FLUENCY
• Perceptual: Visual clarity
• Linguistic: Simple language

https://www.optimizely.com/

HOW TO USE IT
• Increase contrast between text and
background

HOW TO USE IT
background
• Use an easy-to-read (sans serif) font

HOW TO USE IT
background
• Simplify your language

HOW TO USE IT
background
• Simplify your language
• Have a direct, tangible, CTA

KEY TAKEAWAYS

KEY TAKEAWAYS
You have to understand the
psychological triggers, biases & motivations
that drive your customers

KEY TAKEAWAYS
1 Endowed progress

KEY TAKEAWAYS
1 Endowed progress
2 Sunk cost fallacy

KEY TAKEAWAYS
1 Endowed progress
2 Sunk cost fallacy
3 Appointment dynamic

KEY TAKEAWAYS
1 Endowed progress
2 Sunk cost fallacy
4 Lower cognitive load

KEY TAKEAWAYS
1 Endowed progress
2 Sunk cost fallacy
4 Lower cognitive load
5 Perceptual fluency

THANK YOU!
@NathalieNahai
NathalieNahai.com

The psychology of successful ecommerce

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