In episode 12 of the Customers Who Click podcast I spoke with Ben Stirling from Webloyalty about behavioural economics, and how carefully placed nudges throughout the customer journey can increase conversion and customer retention.
By understanding how consumers think and behave, businesses can tap into various emotions and behavioural triggers to nudge them over the line to make that purchase, and then keep them engaged in the long term.
Done properly, this has fantastic benefits for the company, and can help you build a long term, sustainable business with engaged and loyal customers. Get it wrong, and you come across as a manipulative and untrustworthy brand.
Ben has a wealth of experience growing business in the ecommerce space and previously worked at Expedia on their partner solutions team. He’s spent the last 2 years as Managing Director of Webloyalty, a global leader in loyalty and engagement solutions. They partner with the largest eCommerce organisation in each market, to make shopping more rewarding for both our partners and their customers.
Key Highlights:
2:00 – 05:52 – Who is Webloyalty and what do they do? – Webloyalty provide a spectrum of revenue enhancement solutions, primarily focusing around customer loyalty programs. Consumers join the Webloyaly scheme via their online partners, and then consumers get an ongoing discount at those partner sites.
05:37 – 10:30 – What is behavioural economics and why should I care? – Webloyalty and London Economics put together a study to determine the key conversion and retention biases. It involves using psychological experimentation to really determine what makes consumers tick. What do consumers deem to be valuable. Over 200 biases were found, one example being 9-enders – people aged 29, 39, 49 etc tend to make more impulsive and ambitious decisions.
11:19 – 25:40 – What are the top 6 conversion biases? – Discover how businesses can you use biases such as Loss Aversion, Priming & Anchoring, Framing & Chunking, the Von Restorff Effect, Channel Factors, and Present Bias can all improve customer conversion.
25:45 – 40:14 – What are the top 6 retention biases? – Personalisation, Social Proofing, Scarcity, Goal Gradiant, Reciprocity, and Consistency are all key to ensuring you retain customers for longer, and build a sustainable business continue to generate revenue even when the acquisition becomes difficult.
40:24 – 46:30 – What are some of the most common or biggest mistakes companies make – Lots of companies just aren’t utilizing most of these biases, so they’re missing out huge amounts of revenue through both acquisition and the long term lifetime value of customers. However, the biggest mistakes tend to come from companies that don’t use these as nudges, they’re not subtle with the usage. Huge signs trying to scare customers into buying before they miss out, or using them in misleading ways.
47:01 – 57:56- What will the big trends in behavioural economics and consumer behaviour in the next 12-18 months? – We’ll see the recent big shift to online stay with us. Sure people will go back in-store, but more people will have finally taken that step online, and will have seen the benefit of it. We might see the return of butchers, bakers, fishmongers etc as these businesses become more prevalent online, particularly via companies that were B2B but had to make the shift to B2C during the pandemic.
58:09 – 1:01:2 – What are Ben’s marketing pet peeves? – People who shove sales messages in your face the moment you connect. Just be a bit more human, offer some valuable, earn reciprocity.
1:01:27 – 1:04:04 – What channel or tactic would Ben kill off? – Clickbait! Not just because the articles tend to be low quality and often pointless, but because clickbait does it’s job, and no matter how many times you see it, you still want to click because you’re curious and you don’t want to miss out.
If you’d like to read the full report on Behavioural Economics you can find it here: https://ww2.webloyalty.co.uk/digital-choice-report
