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How to Use 6 Behavioral Science Theories to Drive More Revenue 

By John Pellinghelli, Co-Founder of Metric Digital

I recently spent an entire day at the Google Premier Partner Summit. 

One of my favorite sessions was on Behavioral Science by Google's Maya Shankar.  Maya spoke on six behavioral science principles and gave several real world examples of how they've been tested and applied.

This got my brain turning. 

I started to come up with ideas for how we could use some of these theories to influence buyer behavior and ultimately drive more revenue.

WARNING: Thinking about marketing in this way might read manipulative, but these subtle techniques have been used for 100+ years.  

Without further ado, here are the 6 behavioral science theories, along with our ideas for how we, as digital marketers, can use them:

1. Changing the default
Theory: Changing the default to be "opted-in" vs. "opted out" drives a higher opt-in rate. Of course. But what is surprising is, people won't opt-in to programs that will explicitly benefit them, if it's not the norm or embarrassing.

Are you asking customers to opt-in, or opt out?

In this example, Maya Shankar described a problem public schools had with getting people to enroll their children in a free lunch program, due to the complicated enrollment process and social stigma attached. They solved this problem by changing the default to enrolled if they qualified. Instantly, everyone who needed free lunches was enrolled and could opt out as needed. 

How can digital marketers use this? 

Email marketers often find that email subscriptions increase when including a pre-checked box to receive the e-newsletter rather than an unchecked box. To learn more best practices on how to do this, read our Metric Mastermind.

2. Loss Aversion or Endowment Effect

Theory: Loss Aversion is the idea that once a person owns an item (or feels like they own an item), forgoing it feels like a loss, and humans are loss-averse. People value an item even further if they feel like they've earned it.

How can digital marketers use it? 

Everlane is killing it with this one!  One of our team members got their email informing her that she had $20 store credit. Literally no difference between this and a $20 Off coupon, but immediately it's thought of as money she had to spend instead of as a coupon offer. 

Phrasing it as a credit instead of a coupon cuts through the noise since people are so numb to the standard discount/coupon/sale messaging in their inbox.

Attaching the expiration date to it really ratchets up the urgency.  

3. Commitment Device

Theory: You're more likely to follow through on something if you make a commitment up front.

Does your website make it easy for users to say yes?

Maya Shankar explained a behavioral science principle that people are much more likely to take action if they commit in advance. And so, they were able to increase conversions on a landing page by moving the “yes” box to the top of the page instead of leaving it at the bottom. 

For example, it might say, “Yes, I plan to attend X event” at the very top of the page with a box next to it that users have to check. Then in the middle it could provide details about it. And at the bottom it could have the remainder of the form for submission. The test showed that because people had committed in advance, they were more likely to complete the desired action.

How can digital marketers use it? 

Subscription services are the obvious example. Companies like NatureBox (one of our awesome clients) can turn a single purchase decision into repeat purchase behavior. 

Fun fact, there's an entire business built around this called Stickk. It creates something called a commitment contract. It's a binding agreement you sign with yourself to ensure that you follow through with your intentions

4. Gradient Effect

Theory: You are far more likely to take action in pursuit of a goal when you feel like there's progress made towards hitting the goal

Think about your local coffee shop. They give you a loyalty card with 1 of the 6 spots punched out.  Another coffee shop gives you a loyalty card with 3 of the 8 spots punched out.

Although both of them need 5 more coffees before you earn your "free" coffee, the second coffee shop will be more successful.

How can digital marketers use it?

Proactively add a discount or promo, i.e., "You're already halfway to saving 15%." Give people a sense of momentum and progress, and they'll come back for more.

5. Identity Priming & Social Norms

Theory: People can be persuaded to identify with a certain type if that identity is positive for them. People are strongly influenced by how their peers behave. Once the identity is established, social norms can be used to influence action.

What do you want your customers to become?

Identity Priming: "Since you're on our site you must care for the environment"

Social Norms: "Other environmentalists love our organic cotton shirts"

How can digital marketers use it?

First, establish the identity. Then establish the behavior that you want people with that identity to take. Some examples:

  • Remind people that they are a past purchaser, and use that in email & remarketing
  • Make a strong assumption about someone based on their response to creative & targeting combinations.
  • Setup creative & targeting situations to learn 
  • 90% of people who add this product also buy this product

6. Reference Dependence

Theory: People will anchor on a point of reference when evaluating the benefit of a deal.

Which of these sounds like a better deal? 

  • Save $5 on $125
  • Save $5 on $25

Although the absolute savings is the same in both, option 2 appears to be a better deal. It's simply a matter of reference and perspective.

How can digital marketers use it?

Communicate a deal in the terms that sound the most impressive. Be it % saved, absolute $ saved, $ saved per item. Remember, how a promo is messaged is just as important as the actual specifics of the promo.

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With these 6 subtle techniques, you can be sure to influence buyer behavior and ultimately drive more revenue for your company.

P.S. Here is a short reading list of a few of my favorite books on this topic:

Influence: The Psychology of Persuasion
Nudge: Improving Decisions About Health, Wealth & Happiness
Hooked: How to Build Habit Forming Products

What behavioral science techniques have you found to be most useful for your business? We'd love to learn from you. Share your best practices below!

John Pellinghelli Co-Founder, Metric Digital The Metric Digital Blog A Blog on All Things Digital Marketing