Category: Blog

This is the fifth in a 12 part blog series, where I review CXL Institute’s ‘Digital Psychology and Persuasion’ Minidegree. This week I took two new courses: i) Building Trust, and ii) Building Habits and Loyalty. In today’s blog we will discuss how to engage and retain customers.

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Once we get people to become our first time customers, our goal is to make them stay and build a long lasting relationship with them. Customers will keep coming back to you if they like your product, but the real way to retain them is by creating habits. A habit is a behavior done with little or no conscious thought. Let’s discuss some ways we can shape the customers’ preferences and form habits.

Get Them Hooked!

Nir Eyal proposes the “Hook Model” in his book ‘Hooked: How to Build Habit-Forming Products’. The hook is an experience designed to connect the user’s problem to your solution, with enough frequency to form a habit. The hook works in a loop and involves the following phases:

1. Trigger

A trigger nudges the customer to take an action, It can be of two types:

i) External Trigger:

It can be in the form of a notification, email or ad. It should tell the customer what to do and also provide the ability to do it. The goal is to, over a period of time, internalize this behavior so that external triggers are no longer required.

ii) Internal Trigger:

It arises from an emotion in the customer. External trigger is no longer required but comes through an association in the user’s memory, the user already knows what to do. Once  a user starts using your products from internal triggers, you know you have become a habitual product.

2. Action

A successful trigger results in an action, where the user actually does something. For an action to take place after the trigger, the customer should have two things: motivation and ability to do it.

3. Reward

Once the user takes the desired action, they will get a reward. Rewards are not given instantaneously and are variable to keep the novelty and anticipation alive. The anticipation of the reward is more powerful than the reward itself, which is further heightened by stimulating variability. The behavior that results into a reward should be the simplest possible task so that it can be done frequently.

4. Investment

Investment into a product is when users store some value while using it and hope for some return in the future. This is the final phase in the hook, and it should be able to load the next trigger keeping the process going in a loop. This increases the likelihood of the next return and helps in shaping user habits.

All Customers Like Receiving Rewards

62 percent of customers don’t feel like the brands they’re loyal to do enough in return. What better way to make your customers feel valued than to reward them. Since, rewards redemption increases reward-seeking behavior, this simultaneously acts as a way to encourage them to return consistently. Professor of Psychology Jack Mearns explains, “The likelihood of a person exhibiting a particular behavior is a function of the probability that that behavior will lead to a given outcome and the desirability of that outcome”.

You should structure your reward programs in such a manner that they bring value to both: you and your customers. There are two types of reward systems:

1. Fixed Reward

Also known as reinforcements, these rewards are awarded when the customer reaches a fixed threshold. The basic idea is when you reward a certain behavior, you encourage them to exhibit more of it. For example, a cafe can reward their frequent customers by making every tenth cup of coffee free. Predictable fixed rewards as these, where they know when to expect it, encourages customers to put in the effort to reach the reward. Customers who successfully attain a reward exhibit increased effort and drive in subsequent attempts to reach the goal. “The rewards need to come often enough so that there is reinforcement. At the same time, it can’t be too close. Then it wouldn’t be meaningful”, says Xavier Dreze, Professor of Marketing at Wharton and UCLA.

2. Variable Reward

Variable rewards are the random and surprising delights awarded to customers in forms of a offer, discount or freebie. Although random, these rewards should be desirable and result into customer engagement and retention. Surprise reward makes the customer feel special and creates a positive association with the brand. They are more likely to return to experience that positive emotion again.

Win Your Customer’s Loyalty

The kind of loyalty we want to generate is the one that comes from true emotions and experience. Getting people into rewards programs does not convert them into loyal customers. Just 13 percent of customers are complete loyalists who never shop around.

Rewards ≠ Loyalty

Rewards programs are best to be used as an incentive to encourage people to come into your environment and give them a great customer experience. Then, overtime the combination of rewards and good customer experience will win you their loyalty.

Rewards + Great CX = Loyalty

Goal Gradient Effect

Pioneered by Clark Hull, it states that the tendency to approach a goal increases with proximity to the goal. A study by Columbia University researchers studied the effects of the goal gradient effect in relation to real reward programs and found that members purchased more frequently the closer they were to earning a reward; and a stronger tendency to accelerate toward the goal predicts greater retention and faster reengagement in the program.

What this means for us is that the closer the customers feel to reach the reward, the more likely they are to increase to their efforts to achieve it. Similarly, the farther they feel the reward is, the lower is the desirability and motivation to achieve it.

Endowed Progress Effect

Dreze and Nunes further documented a phenomenon which they call the endowed progress effect. They found that it wasn’t just the proximity to the goal that induced additional effort, but the perception of progress toward the goal. In other words, as long as customers perceive that they are making progress towards a goal or reward, they will increase their efforts as a result.

Favorable ways to employ this effect would be to show customers their progress and give them a “head-start” at it. The psychology behind this is that nobody likes starting at zero, and can be very demotivating. So a “head-start”, even if illusionary, gives a notion of progress and encourages customers to make efforts to reach the reward.

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Once you acquire a customer, the next step is to find ways to retain them. Building habit forming products, a good reward program and great customer experience is what makes customers loyal. Ensure the reward proposition is desirable and achievable.

Next week, I will further discuss my learnings and opinions from the next few courses I take in the Minidegree. To stay updated with my weekly blogs and explore the ‘Digital Psychology and Persuasion’ Minidegree with me, subscribe to my blog.

Until then, explore the various programs offered by CXL, by clicking on the link below:

This is the fourth in a 12 part blog series, where I review CXL Institute’s ‘Digital Psychology and Persuasion’ Minidegree. This week I took two new courses: i) Nonconscious Motivation, and ii) Cognitive Biases. In today’s blog we will discuss how to use social proof as a nonconscious motivator and how it creates a bandwagon effect.

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Your Customers Don’t Trust You!

Historically, marketers and advertisers aren’t trusted by people and more often than not, are considered liars. This might bring up uncertainty and fears in your customers regarding your product or services.

When humans encounter fear or uncertainty they instinctively look at others for guidance and safety. Consumers trust other consumers’ word 12 times more than the brand description. This is why we must employ social proof effectively: to remove any doubts and fears a customer might have and to influence purchase behavior in them.

Social Proof is More than Just Reviews

Robert Cialdini in his book, Influence: The Psychology of Persuasion, gave seven principles of nonconscious motivators. One of them is social proof, that is, “we view a behavior as more correct in a given situation to the degree that we see others performing it”. Psychologists call this conformity, herd behavior, or the bandwagon effect. Simply put, people tend to do what other people are doing.

Be it customers’ doubts, fears, uncertainties or any other source of friction, social proof is frequently used to alleviate any pain points and guide customers towards the best product choice. It is evidence of or from others, like us.

6 Types of Social Proof

1. Case Studies:

It is referred as a longform social proof, a data-driven, in-depth analysis of the product or service you provided a current customer with. Use this to highlight success stories of your customers.

2. Testimonials:

Testimonials are one of the most persuasive form of social proof. These are simple, short-form recommendations from happy customers. Make sure to complement a testimonial with a good quality customer picture, as it increases “truthiness”. Testimonials are more likely to be believed when it has a corresponding picture.

3. Reviews:

BrightLocal found that 88% of consumers trust online reviews as much as personal recommendations. Use this social proof to display positive feedback from actual users. One interesting tidbit of information from BrightLocal’s survey is that people don’t just trust the first review they see. On average, consumers check 2-3 different review sites before making a decision about a business.

4. Social Media:

Praise from current customers and/or brand advocates in the form of tweets, Facebook posts, Instagram comments, shares, follow counts, engagement counts, etc. Endorsements from influencers on social media is also picking up pace at a rapid rate. Influencer marketing has been considered the fastest-growing consumer-acquisition channel.

5. Trust Icons:

This can include: badges, seals, certifications, awards won, mentions in media outlets, etc. It is a popular approach to establishing credibility, which is usually as simple as displaying meaningful icons and logos. Placing the logos of business customers on a company website can increase conversions by as much as 400%, according to Voices.com.

6. Data/Numbers:

This is a quantified metric of customers served, number of subscribers, etc. Showing how many customers, subscribers or users you have shows people think what you’re offering is valuable. People feel comfortable joining a crowd and have a desire to belong to a group.

3 Steps to Harness Social Proof Efficiently

Angie Schottmuller, Forbes Top 10 Online Marketer 2015, in her CXL Live 2016 session talked about social proof power plays. Catch this fascinating and informative session by Angie below:

She discussed the following 3 steps to efficiently harness the power of social media:

STEP #1

Identify your audiences fears, anxieties, questions and doubts.

Angie says, “The social proof psychology principle says that when people are uncertain, they’ll most likely look to others for behavioral guidance. In order to harness this concept for persuasion, marketers must first identify the uncertainties of their customers and then buffer accordingly with appropriate social proof.”

STEP #2

Brainstorm and inventory 6S formats to buffer audience’s fear/questions.

Oftentimes, people believe they don’t have any social proof to display or use. But social proof has a wider scope than just reviews and testimonials. Consider doing an inventory using the following 6S format to explore various options you might already have.

6S Formats of Social Proof:

Sum it. Score it. Say it. Sign it. Show it. Shine it.

1. Sum it: Quantified metric of numbers of active users, subscribers, etc.
2. Score it: Qualitive metric of reviews in the form of ratings, for example, 4 out of 5 stars; or rankings, for example, top 10 selling products.
3. Say it: Reviews, expert Q&A, forums, podcast bits, etc.
4. Sign it: Source of ratings and reviews, mark with ‘who said it’, names of consumers, etc.
5. Show it: Visual display of logos of business customers.
6. Shine it: Approval seals, certifications, awards, badges, etc.

STEP #3

Know the quality of your social proof.

When it comes to making a conversion impact, quality trumps quantity. We only want to display social proof if its persuasive enough to encourage conversions. If poorly implemented it can backfire and negatively impact conversion rates. Therefore, it becomes imperative to put the quality of our social proof to test before implementing them. Angie suggests the CRAVENS model to assess its quality and how to score it.

7 Factors of Social Proof Persuasion Quality:

1. Credible: Believable, authentic, trustworthy;
2. Relevant: Meaningful, applicable, timestamped;
3. Attractive: Whether creates an emotional trigger;
4. Visual: Pictured, graphed, viewable;
5. Enumerated: Quantified, scored, ranked;
6. Nearby: Proximity to the fears/uncertainties;
7. Specific: Descriptive, detailed, precise.

Score each of the factors above, depending on how well they meet the criteria mentioned, using the following standard:

SCORING: 3 = Exceptional, 2 = Good, 1 = OK, 0 = Missing, -5 = Bad

Sum the scores of all seven factors, and access the persuasion quality depending on where it lies on the scorecard:

Negative = -35 to 0

Weak = 1 to 5

Neutral = =6 to 10

Helpful = 11 to 15

Persuasive = 16 to 21

This scorecard is a good indicator of how effective the social proof will be in reducing the fears and anxieties of the customers, to help with the conversions.

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Social proof is a cost-effective nonconscious motivator every business should take advantage of. Use the approval and popularity of your product/service among your existing users to acquire new customers. Assess different social proof formats and identify which works best in your favor. As venture capitalist and blogger Aileen Lee says, “Think of it as building the foundation for massively scalable word-of-mouth.”

Next week, I will further discuss my learnings and opinions from the next few courses I take in the Minidegree. To stay updated with my weekly blogs and explore the ‘Digital Psychology and Persuasion’ Minidegree with me, subscribe to my blog.

Until then, explore the various programs offered by CXL, by clicking on the link below:

This is the second in a 12 part blog series, where I review CXL Institute’s ‘Digital Psychology and Persuasion’ Minidegree. Each week I share my learnings and opinions on the courses taken and take you along my journey. Today we will explore two new courses I took this week: i) Decision Making and Emotions, and ii) Learning and Memory. We will build an understanding on customer behavior and what drives them to make a decision.

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Decisions, Decisions, Everywhere

As an adult we make decisions everyday. Some decisions seem important, whereas others might seem trivial. So how many such decisions do we make every day? A study from Cornell found that we make about 227 decisions every day, just about food! When extrapolated, this would mean that we make about 1 million decisions per month! That’s a whole lot of decision-making for one individual, and these decisions are essentially what guides an individual’s actions.

The ability to understand these decision making processes becomes a potent tool to strategize towards favorable customer behavior. This helps us to think and answer questions like:

• What decisions do we want a customer to make?
• How can we reduce the amount of energy required to make a decision?
• When is the customer most likely to make a favorable decision?

Our Brain is a Dual Processing Unit

Bart Schutz, at CXL Live 2016, gave a talk on ‘Persuasive Journey Mapping’. He is a consumer psychologist and one of the few international leading voices on online persuasion and consumer behavior. He discussed the concept of BIG.

Behavioral Intelligence Gap

This is the gap between the behavioral experiments we conduct on customers and our understanding of their behavior. Catch this fascinating and informative session by Bart below:

To interpret user behavior and how we can persuade it to our advantage, we must get a better understanding of the functioning of the brain. Our brain can be thought of as a dual processing unit, comprising of the following two systems:

System 1	System 2
Subconscious, emotional brain	Conscious, rational brain

System 1

This is the fully automated and emotional part of the brain and is always working. It is characterized by its associative and relative nature. Therefore, implicit/indirect associations can also invoke a desired response.

System 2

This is the voluntary part of the brain which gives us awareness, the power of imagination and logical reasoning by projecting itself in the future. However, system 2 is not always involved as it prefers to remain absent but when it is present, it needs complete focus and can deal with only a limited amount of information.

What actually drives our decisions?

We like to believe that we are guided by rationale while making a decision. But that can’t be farther from the truth. What’s causing this illusion is the fact that we post-decision rationalize. We come with rationales and reasons after we have already taken the decision. The System 2 is constantly trying to come up with the best logics to explain our decision. They are not the logics that caused the decision but are just a way to comfort ourselves that we are a rational being.

Therefore, when testing for conversions, both these systems must be kept in mind. System 1 is always at work; whereas, system 2 shows up every now and then. So our tasks are:

• To find out when System 2 is at work
• And, when and which system of the two is persuaded with what arguments

Master the Moment of Decision

At the moment of every decision the following factors must align:

It must grab your Attention, it must draw an Emotional Response from you and it needs to be loaded in your Memory.

Attention

How we actually see the world in front of us is a lot different than the visuals we are currently processing. Our brain only focuses on a certain subject in front of us, and the rest of the frame is blurry and not in color. The brain fills up the rest of the periphery from memory.

Similarly when a user visits a website, they only see a fraction of what is on the screen. It is our job to strategically draw attention where it is required and use visual cues to guide the website visitor.

Emotions and Feelings

Emotions are unconscious, a low level response and feelings are conscious. As the low level emotional response begins to rise and as you begin to become conscious of it, it becomes a feeling.

As has been discussed earlier, the decision making power largely lies with System 1, the emotional part of the brain. Drawing an emotional response is the key to influencing a favorable decision from the customer.

Memory

And finally, it must evoke a positive memory. Past experiences can impact future decision making.

Studies have shown that when something positive results from a decision, people are more likely to decide in a similar way, given a similar situation.

Psychology of Learning

Let’s explore some unique learning processes:

1. Classical Conditioning: This is a process in which an association is formed between a previously neutral stimulus and a stimulus that naturally evokes a response.
2. Operant Conditioning: This process attempts to modify behavior through the use of positive and negative reinforcement. For example, by rewarding or punishing a kid for some behavior, or by rewarding customer with loyalty programs.
3. Observational Learning: Learning occurs through observing and imitating others. Requires: attention (degree to which the observer notices the behavior), retention (forms memory of the behavior), reproduction (ability to imitate the behavior), motivation (perceived rewards must outweigh perceived costs).

Psychology of Memory

Three major processes involved in memory:

1. Encoding: This is how  information is changed into a usable form.
2. Storage: Once the information has been encoded it is stored in memory for later use.
3. Retrieval: Stored memory is brought into consciousness when it is to be used.

How to apply this to online marketing?

When users visit a site, the information on the web page must be dispensed in such a form that it is easy to process and acquire. The effectiveness of these marketing strategies can later be understood by testing how well the users were able to retrieve that information from their memory.

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With all the access to this new knowledge on behavioral psychology of customers, there is a new gap that is emerging. The gap between your knowledge about customers’ behavior and the customers’ knowledge, where they still believe they are in control. Therefore, the ethical thing would be to openly share this ever evolving knowledge of user behavior with everyone.

Next week, I will further discuss my learnings and opinions from the next few courses I take in the Minidegree. To stay updated with my weekly blogs and explore the ‘Digital Psychology and Persuasion’ Minidegree with me, subscribe to my blog.

Until then, explore the various programs offered by CXL, by clicking on the link below:

This is the first in a 12 part blog series, where I will be reviewing CXL Institute’s ‘Digital Psychology and Persuasion’ Minidegree. Each week I will share my learnings and opinions on the courses taken and take you along my journey.

If you are into marketing, as a professional or just starting out, chances are you already have consumed brilliant, in-depth blogs by CXL on Growth and Optimization or heard about CXL’s founder Peep Laja. I believe this information is more than enough to lock in the credibility of CXL Institute and the value it has to offer; but if not, follow me along for the next 11 weeks, as I share my experience with them.

What is CXL Institute?

It’s an advanced level marketing training institute, which offers deep skills in growth, customer acquisition, analytics, and conversion optimization. A wide array of courses and programs taught by industry experts and top practitioners, makes CXL Institute an amazing platform to advance as a marketer.

Currently, they provide 7 in-depth training programs, well curated as ‘Minidegrees’ – they are:

1. Conversion Optimization
2. Customer Acquisition
3. Digital Analytics
4. Digital Psychology and Persuasion
5. Growth Marketing
6. Technical Marketing
7. Technical Content Marketing

With the eighth Minidegree on ‘Transactional Analysis’ launching soon in February 2021.

Google, Cisco, Ikea, Hewlett Packard Enterprise, Symantec – are some of the companies that train their teams at CXL.

Why I chose ‘Digital Psychology and Persuasion’ Minidegree?

Marketing and Psychology are inextricably linked, former can’t work without the understanding of the latter. As I began to dive into the field of Digital Marketing, I realized that no amount of technical knowledge on marketing tools could produce great results without an understanding of customer behavior and habits.

In comes the Minidegree by CXL, where they offer proven psychological frameworks to improve websites, understand behavior, and influence purchase patterns.

The specialization spans across the following areas:

• Neuromarketing
• Persuasion
• Applied Behavioral Psychology

and offers 22 courses in total and a certification upon passing the final exam.

I am very grateful to the CXL Team for providing me a scholarship to this program, as I haven’t seen anything so comprehensive and well curated. It is an amazing opportunity to learn from top practitioners and advance as a marketer.

What is my first impression of the Minidegree?

The CXL Institute markets themselves as an intense and deep learning experience. One of their ad taglines being:

First of all, how witty is that!

And secondly, it’s not just some witty fluff. The program does go beyond rudiments and I was pleasantly surprised with how much I had learned just in the introductory course. To mention one lesson – A Big List Of Persuasion Techniques; well, BIG IT WAS, alright!

This Minidegree has to offer 56 hours 06 minutes of valuable content. Since, the courses are pure gold and I am truly expanding my mind, I am thoroughly enjoying going through them.

So going by the deep and intensive learning experience I’ve had so far, and with the wide array of training they offer, I can see how this platform could become a firehose to drink from. But hey, too much value and content to learn from? Well, that’s one problem I don’t mind having!

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Let’s explore what I learned in Week 1!

This week I went through the following two courses:

1. People and Psychology:

This course covers the psychological principles that drive human behavior, how the human brain works and makes decisions. The lessons are rich with examples and intriguing research work to further explain the principles discussed. Let’s briefly go through few of the topics covered within this course:

Cialdini’s 7 Principles:

Cialdini in his book ‘Influence’ gave seven principles from the perspective of how not to get taken advantage of, here we learn how we can use them to boost conversion. Principles like social proof and scarcity always work.

Fogg Behavior Model:

Three elements must come together at the same time for a behavior to occur: motivation, ability, and trigger. When a behavior doesn’t occur, at least one of the three elements is missing.

Since design impacts behavior, we can intentionally design for certain behaviors. Ultimately, our  aim is to make a trigger at a point of high motivation and to simply the action to be taken, so as to ease ability.

Lessons from Neuromarketing:

We learn about the ‘Old Brain’ or the reptilian brain, which is the most ancient and primitive part of our brain and is wired purely for survival. Every decision a human makes lies with this part of the brain. We learn what stimuli trigger this part of our brain and how to use them to our advantage and sell more.

Emotional and Rational Decision Making:

As stated above the decision lies with the Old Brain which represents the emotional part of our brain and the rational part plays a very small role in it. At the end of the day, people buy because they want to. No amount of logic and reason can pursue them into making a decision to buy your product, unless they want, which is why it becomes all the more important to evoke an emotional response towards your product from the customer.

2. Attention Basics:

In this course we learn the processes of garnering customer’s attention and how to maintain it. Oftentimes it isn’t the lack of interest from the user but the fault lies in our failure to grab their attention. This course has interesting case studies to further explore the theories discussed. Let’s briefly go through few of the topics covered within this course:

First Impressions:

First impressions are formed very quickly and changing them is a hard task even when provided with facts. In the ecommerce world, first impressions are formed when someone visits our website. Four factors should be kept in mind to influence the visitor’s first impression favorably: visual design, value propositions, compelling imagery and graphics and a personal touch that exudes trustworthiness.

Cognitive Load:

Cognitive load is the amount of mental energy that is required to process something. Our aim is to always break down information into small steps so that it is easier for the customer to understand and take action on. Complex and ineffective forms of dispensing information can make a customer distracted and dissuade them from taking desirable action.

Understanding Online Reading Behavior:

People usually follow the following patterns when reading online:

1. F-pattern: Initially people start by scanning along the first horizontal line. If the initial words interest them, they continue to read or else abandon it completely and move down vertically to another horizontal line covering the lesser area, and so on.
2. Layer cake pattern: If the reader has committed to reading, then they move on to layer cake pattern, where they scan along horizontal lines quickly in sections that strike their interest.
3. Spotted Pattern: When they continue to show interest, they will move on to spotted patterns looking for main ideas.

Therefore, to optimize the reading experience we must make our text more scannable.

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You can explore the specialization by clicking on the button below:

Next week I will further discuss my learnings and opinions from the next few courses I take in the Minidegree. To stay updated with my weekly blogs and explore the ‘Digital Psychology and Persuasion’ Minidegree with me, subscribe below: