How to Steal Customers From Your Online Competitors

Beat a bigger company by using 6 powerful heuristics



The Pied Piper of Online Shopping

If I told you there were 6 easy things you could do to your website that would persuade 90% of people who saw it to buy from you instead of your competitor, would you do them?


Of course you would.


You’d probably be a little skeptical too - if these 6 things are so easy, why isn’t everyone doing them already?


Because unlike most conversion problems that focus on technical solutions, these 6 easy things use psychology and behavioural science heuristics to understand and influence online shopping behaviour.


Don’t just take my word for it - Google agrees with me, and has the research to back it up.


Topics:

  • Heuristics in the messy middle

  • What is a heuristic?

  • How people shop online

  • Why people choose one brand over another

  • How to steal your competitors' customers



Heuristics in the messy middle


Google has released Decoding Decisions: Making Sense of the Messy Middle, a fascinating new report on online shopping behaviour.


Its goal is to understand how people shop online, how they evaluate brands, and identify what marketers can do to influence their purchase decisions. They’ve used their massive repository of search data to map out the complicated and often messy purchase journey an online shopper goes through.


Basically, Google is trying to understand the power of heuristics and how they’re used to make online purchase decisions in everything from clothes, cosmetics, apps, cars, and more.



What is a heuristic?


A heuristic is any approach to problem solving that employs a practical method that is not guaranteed to be perfect or rational, but sufficient for reaching a decision.


In other words, it’s a rule-of-thumb.


Because the internet is an environment of limitless information, we all use heuristics every day to help make shopping decisions. Most of the time, we don't even realize we're doing it.


Companies that understand how to leverage these heuristics can often persuade online shoppers to choose their products or services over their competitors - even if they’re a smaller or less known brand!



How people shop online


The growth of the internet has brought an abundance of choice and limitless information, which in turn has transformed consumer behaviour.


So how do people actually shop online, and how do they decide what to buy?


At a glance, most online consumer journeys don’t look like an orderly funnel. They’re a chaotic, messy scribble.


Source: Decoding Decisions, Google (2020)


This makes it very difficult to identify the exact reason why someone chooses one brand over another.


In general, online shoppers go through 3 phases:

  1. Explore options

  2. Expand knowledge and consider other brands

  3. Evaluate options and narrow down choices


These phases can happen sequentially, simultaneously, or all at once.


Between the twin poles of trigger and purchase sits the messy middle.


Source: Decoding Decisions, Google (2020)


“The sum total of a shopper’s experiences and impressions creates a backdrop of exposure, encompassing brands, products, and more. Purchase triggers prompt consumers to enter a cycle of exploration and evaluation, gathering information and then narrowing it down. If the first cycle doesn’t yield a definite choice, they loop back, repeating as many times as necessary. Finally, they make a purchase. Or they don’t. Either way, the whole experience feeds back into their background exposure.” - Google


Why people choose one brand over another


After entering the exploration and evaluation loop, how do online shoppers make their final choice?


While the fundamental mechanics of shopping have changed, behavioural biases that served our early ancestors are still just as useful for cutting through the complexity of shopping on the internet.


Google identifies 6 heuristics that trigger purchases in the messy middle.



Category heuristics


These are shortcuts or rules of thumb that help make a quick and satisfactory decision within a category. For example, how many MP the camera has on a smartphone, or how many GB of data in a mobile phone contract.


Think of it as an internal checklist that people have when shopping for something.


"OK, this needs to have X and Y, I'd really like it to have Z too but as long as it has X and Y I'll probably buy it."


You need to know the category heuristics used in your category!


Source: Decoding Decisions, Google (2020)


Authority bias


We alter our opinions or behaviours to match those of an authority on a subject. When students receive financial advice from a renowned economist, the decision-making parts of their brains show less activity as they offload the burden of the decision process to the expert.


Any sort of expert testimonial gives you a huge advantage - business leaders praising your product, doctors endorsing your medicine, or respected publications giving you a positive review. Who do people look to for advice or guidance in your category?


Source: Decoding Decisions, Google (2020)


Social proof


We all have a tendency to copy the behaviour and actions of other people in situations of ambiguity or uncertainty. For example, without thinking, we might click on an ad that includes a four or five-star rating because it appears to be a popular choice.


Getting customers to share feedback is difficult; if you don't have a plan to collect and display lots of customer reviews, you need one.



Power of now


We want things now rather than later. Humans are wired to live in the present – our evolutionary survival hinged on our ability to deal with the problems of the here and now rather than our ability to plan for the future.


How easy is it for someone to checkout on our site? How long does it take for their order to arrive? How soon can they start using your product? If you don't have hard data to answer these questions, get on it.


Source: Decoding Decisions, Google (2020)


Scarcity bias


Rare or limited resources are more desirable. Limited time, quantity and access can persuade people to purchase.


Warning: this heuristic can often backfire and turn people off from buying, use with care!



Power of free


There is something special about the price of zero. In one study, people were given the option to choose between a free $10 gift card and a $20 gift card that could be bought for only $7. More people chose the $10 gift card, despite the other option offering superior value.



Source: Decoding Decisions, Google (2020)



Combining these heuristics on your website and products has a powerful effect.


Across 31 different market categories, when second favourite brands were supercharged with all six cognitive biases the result was a profound shift away from the favourite.


Applying all 6 biases to a product or service was enough to make 90% of people change their purchase from a previously favoured brand!


Source: Decoding Decisions, Google (2020)



Key takeaways


Even a brand you’ve never heard of can disrupt purchase preferences

While established brands still exert a powerful pull, the biases had the effect that behavioural science theory said they would.


Brands (still) matter

Many shoppers remain loyal to their favourite brand even when offered a vastly superior proposition.


Presence can be all it takes to shift preferences in the messy middle

Even in a complex world, sometimes all it takes to make a big impact is to show up at the right time. Simply giving a shopper the option to choose their second choice brand was enough to entice 30% away from their initial choice.


Source: Decoding Decisions, Google (2020)


In summary, heavyweight brands can’t afford to be complacent: understanding the behaviour and mindset of consumers is now a vital part of protecting market share.


Challengers should see the messy middle as a window of opportunity: consumers are willing to explore and evaluate alternatives, and even entirely new brands have the chance to change mindsets, disrupt established preferences, and win new customers.



How to steal your competitors' customers


What can marketers do to make their brand competitive in the messy middle?



1. Ensure brand presence in the customer journey, so that your product or service is strategically front of mind while your customers explore.


You don't need to be top of mind, but make sure you're showing up in searches related to your category. Any gaps in your media plan could see you locked out of the loop as consumers begin exploring their options.



2. Intelligently (and responsibly) employ behavioural science principles, so that your website and advertising become more compelling as customers evaluate their options.


Understand the cognitive biases that underpin decision-making to create a compelling proposition that appeals to shoppers at an instinctive level.


Identify the key decision making heuristics used in your category. Make sure they're clearly displayed on your product pages, website and packaging.


Include customer reviews & expert testimonials in ads and marketing comms wherever possible. Show happy people using your product or talking about your service.


If appropriate, use limited time offers to create urgency.



3. Close the gap between trigger and purchase, so that people spend less time exposed to competitor brands.


Offer expedited checkout and delivery - the faster the better


Common barriers to purchase:

  • Poor site speed, particularly on mobile

  • Inconsistent or unclear messaging, particularly between ad copy and landing page

  • Inadequate information, such as missing product details

  • User experience issues, such as unclear navigation, pop‑ups, and limited payment options.


As the report concludes, “the better brands get at anticipating shoppers’ needs for information and guidance, the better customer experience will become overall.”


Now go forth and steal those customers, before they're stolen from you!


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© 2020 by Ian Barnard.