What makes your customers choose your solution over your competitors’?
Is it just down to the quality of your product?
Back in 80s, as Coca Cola kept losing market share to Pepsi, they thought the problem had to be the product. Clearly Pepsi were making a better tasting soda…
What else could explain the drop in sales?
So they invested 4 million dollars (about $10 mil in today’s money) updating Coke’s flavor and…
It was a complete disaster.
Their sales plummeted.
Turns out, people bought Coke for a lot more than just the taste.
Just like Coca Cola’s customers, yours buy from you for a lot of different reasons. When you understand why people buy – when you understand how they feel about you and what makes them choose you – you’ll have an incredible advantage on your hands.
That’s why this workshop is all about decision making. In it, I walk you through the psychological triggers that affect everything we do. We talk about how the brain works and look at the hidden drivers that influence us (aka cognitive biases.)
Because when you know how we make decisions, you can leverage the power of psychology and persuasion to gently nudge your customers in the right direction and increase conversions.
Here’s what you don’t want to miss:
- How the Coca Cola marketing disaster ended (and what the marketing team discovered in the process!)
- The real driving forces behind decision making (according to research done by Nobel Prize Winner Daniel Kahneman)
- How to start using common cognitive biases and psychological triggers in your marketing,
Before you watch the recording, grab the worksheet below. In it, you’ll find over 30 psychological triggers and cognitive biases along with examples of exactly how to use them to increase conversions and keep your customers coming back for more.
Watch the recording below:
Transcript and slides
Hey there, guys. As you know, this week’s workshop is being prerecorded as I won’t be able to be there live. We will be back with our live workshops next Wednesday as usual. But I really didn’t want you guys to miss out on one our workshops. So I have prepared everything so that you can learn as much as possible within this week so that next week and for the weeks to come in February, you’ll have all the knowledge you need to leverage this information. So this month, in February, we’re going to be talking about psychology and persuasion and their key role in growing an online business.
When I started out with optimization, I didn’t pay enough … Maybe I didn’t pay any attention to this aspect of optimization or AB testing, and it cost me a lot in results, in conversions, in clients. These days, I know … And when I say these days, like for a decade now, I’ve known that without psychology, without understanding my target audience sake, it’s almost impossible to scale and grow as a brand. You can make small iterations. You can make changes and optimize different things. But if you don’t go deep enough and you don’t start to get to know your audience on the psychological, emotional level, you’re essentially missing out on a huge part of optimization.
Coca Cola’s Mistake: The price you pay when you don’t understand how your customers think
Now, to give you some context and explain how important psychology is for the growth of your business, I thought I’d tell you about a funny story, which it’s funny now because it’s 30-something years after. But a really critical story that happened to Coca-Cola. So the most popular soft drink product, original Coca-Cola, had claimed … I think they had about roughly 60% of the U.S. market in 1948. But what happened was that towards 1984, it almost went down to 22%. And this is from the New York Times, so I will definitely link to that in the show notes of this workshop. But essentially, it went down to almost 22% and was head-to-head with its competition, Pepsi.
Now, it’s dropped so significantly that the new CEO decided to change Coke’s flavor. The New Coke would have smoother, sweeter taste, similar to Pepsi I guess. Basically, what they did is they sweetened it up with corn syrup. Now, his goal was essentially to change the taste as he was sure that that was the problem, and it was going to be a lot more like Pepsi. The company spent over $4 million creating this type of Coke. And it gave it the name, New Coke. This new taste was set to replace the old Coca-Cola, so the original, classic Coca-Cola taste, meaning no more century-old Coca-Cola recipe. Only the new one was going to be in the stores. The bottles and the cans would look exactly the same as before. No change will be made to them, except for one little strip that said, “New,” as you can see here in the picture.
That was the difference in terms of design. It was a very bold move by Coca-Cola and it was the wrong one. Here’s what happened. So the sales tanked. People hated the New Coke. This was an outrage. So this happened in 1985 in April about a month before I was born. People really hated it. There was a huge protesting group called, Old Coca-Cola Drinkers of America. Funny and interesting. They started protesting and they were relentless at their pursuit to have the original Coca-Cola returned. Their protest actually include pouring New Coke down the drain, which I think is kind of funny because they were buying the drink but they were throwing it down the drain. So the protestors were actually carrying signs that said stuff like, “Our children will never know what real refreshment is.” So publicity was really bad and sales dropped dramatically.
Now, here’s the interesting thing. Coca-Cola hired a psychologist to listen in to the 1500 calls they were receiving every single day to try and analyze why this was happening. The psychologist concluded the people that were calling, they weren’t mad. They weren’t just upset about the taste. They were hurting as if they lost a loved one. Their agony, the way they spoke, everything in their demeanor, everything the way they were speaking on the phone psychologically compared to someone who was grieving a lost one. Can you imagine?
Now, just 77 days later, and $4 million down the drain, the old Coca-Cola, now known as the classic Coca-Cola, was back. Can you imagine this? They spent so long planning this product, spending $4 million on it, and within 77 days … So April, it went live, and in August, they brought back the original Coca-Cola. It was back. Now, here’s the funny thing, and I think probably the most critical thing I’ll be telling you about this story. These protestors later participated in a test, a blind tasting test. And guess what? They couldn’t recognize what was Coca-Cola, what was RC, what was Pepsi. Everything tasted the same. And even when they said, “Oh, that’s definitely Coca-Cola,” it was a Pepsi. It was an RC Cola. It was a different cola. They could not tell the difference. So why did this happen?
Your customer’s reactions won’t always be about the product…
Everyone was protesting the taste. It was horrible. Everyone was saying it was terrible. They wanted old Coke back. Terrible three months of countless protesting. So why did this happen? Well, to put it in simple words, people don’t buy products. They don’t buy taste. They don’t buy pricing or features. They buy on emotion. So much of our everyday shopping and eCommerce revolves around our loyalty to brands, our habit, and our unconscious decisions. So even though people could not really taste the difference or maybe they convinced themselves that they could, it wasn’t about that. It was about taking their brand. It was about changing them. It was about not consulting them as consumers. 22% of the U.S. market is huge. That’s a lot of people to disrespect. Coca-Cola didn’t take into account any of these people. They just launched this new taste and said, “This was going to work.” And they didn’t really think about the psychological aspect of doing that to existing customers.
Now, let’s take a look at how our brain makes decisions and why this actually matters to you. Why this story, though funny, is actually such an important lesson to us, to anyone. And seriously, this is a story about a huge brand, but it matters to everyone. The vet, who has a website, or the ecommerce site, or the B2B products, whatever it is you’re selling, this matters to you.
How we make decisions
So Daniel Kahneman once said, “Thinking is to humans as swimming is to cats. They can do it, but they prefer not to.” So here’s the thing. Daniel Kahneman essentially divided our brain into two systems: System 1 and System 2. System 1 is based on intuition and instinct. It’s fast. It’s unconscious. It does things on autopilot. And then we have System 2, rational thinking. This is what everyone thinks their brain is based on. So when we ask people why they made a decision, most of us are going to say, “Oh, System 2. It’s logical. It’s rational. We know what we’re doing.” But System 2 is actually very slow. It’s lazy and it’s very indecisive.
And here’s the thing. The way Kahneman says is System 1 is the brain’s fast, automatic, intuitive approach. System 2 refers to the mind’s slower, analytical mode where reason dominates. But the first often dictates the second. The idea is that System 1 is really the one that is more influential. It is the one that’s guiding System 2 and it’s steering System 2 to a very large extent. So even when System 2 does kick in to make decisions, System 1 is actually affecting it. So Kahneman’s entire book is based on the fact that people place too much confidence in human judgment and rationality. When in fact, many psychological triggers and biases affect us in every decision that we make.
So I like to compare this to Sheldon and Phil Dunphy. So Sheldon has always been considered the character who’s very rational and would love to never have any emotion at all, while Phil Dunphy is obviously only persuaded by emotion. But it’s a really interesting thing because what Kahneman is basically saying is that we aren’t rational beings. We place too much confidence in the fact that we’re rational. When in fact, 95% of our decisions are based irrationally. Now, it’s not that we are irrational beings that have no idea what we’re doing, but we’re basing most of our decisions in life … And these are every decisions. I’m not just talking about buying a cart of milk or if I should go with this car or the other. I’m talking about serious important decisions in life, like what kind of insurance shall I get, what house should I buy, what system should I use, what CRM system should I use. All these hard, cognitive decisions, our brain is lazy and it looks for shortcuts and it uses System 1 to actually make those decisions. And then later on, we rationalize them.
Our emotions affect our decisions
So why does this actually matter to you? Well, simply put, because emotions affect decisions. Decision affect our conversions. And conversion affect our revenue. So by understanding why people act the way they do, you’ll be able to predict their future behavior better and create high-converting experiences to them. Only when you understand what influences your prospect’s decision, you’ll be able to increase conversions and grow your company. It’s a way of figuring out why people really … what they care about, why they’re really buying through you, what they really want, and what your website or funnel needs to include. So when you understand why people buy things, when you understand the decision-making process and how people make decisions, it will actually be easier for you to choose the right colors, choose the right images, choose the right copy for your pages, know even how to build the flow and funnel so that it caters to that decision-making process.
However, finding out what people really want becomes really harder now in our increasingly complex and fast-paced world. It requires cracking a code of psychology, the psychology of people’s decision-making. And one of the biggest challenges is that most people just don’t know or have a clue how they make decisions.
The hero in your customer story
I have shown you guys this before I think. It’s one of my favorite visuals by User Onboard. And how do we actually figure out why people buy from us? So the more tests you run, you’re definitely going to learn more. So you definitely want to run as many AB tests and optimization tests as possible. It’s time to basically stop targeting the rational brain and start targeting the emotional one. So right now, most of us target System 2. But what I’m saying here is that if we want to get more conversions and we want to grow our business, we need to start targeting System 1. So we need to become a lot more human-driven instead of data-driven.
So we do need the numbers and the data. Really, we have to have them. But more importantly, we need to start digging into our prospect’s intent. Why they come to our funnel, what challenges they’re facing, how they currently face these challenges, what scares them, and what their best-imagined outcome looks like. And this is what this image that you’re seeing in front of you actually focuses on. So the person on the left, Mario on the left, is the person … your prospect. And your product is this flower. But it’s so important to understand that when people are buying something, they’re not buying that product. They’re buying the guy on the right. They’re buying an awesome person who can do rad stuff thanks to your product.
How to target System 1 (the real decision maker) with your marketing
So it really is about starting to utilize System 1 and focusing more on System 1 within in your emails, your funnels. Funnels can be your homepage, your pricing page. It could be a landing page leading to a signup for your newsletter, in an email sequence that you’re sending. But all of this stuff has to start focusing on System 1 more. And I want to give you a few examples of how you can start utilizing System 1. I’m not going to get into specific actions, but just generally for you to critique what you have in place right now. Because our next few workshops are going to get into specific ways you can start using System 1 to increase conversions.
Right now, what I’d like you to do is take a look at your funnels that are in place. So if you’re thinking about an onboarding sequence, if you’re thinking about a landing page, your website, whatever it is, and to look at these three things I’m going to mention. Number one … You know what? First, I’ll say that you don’t need to start changing everything about your brand and marketing. But there are small things that you can start looking into and optimizing. So number one is forming habits within your experience. So as we said before, System 1 is automatic. It runs on autopilot. For example, when you’re driving to a friend’s house, you’re on autopilot. How many times have you got in the car, started the engine, and suddenly realized you’ve arrived at your parents’ house? This is not an operation that demands strategic thinking. You’ve taken this route previously and you’re just doing it automatically. Same goes for riding a bike, purchasing certain types of brands. Like you go into the supermarket, and you’re buying the same type of milk and the same type and brand of cheese, not necessarily because you have some affinity to their brand but it’s a force of habit.
So your goal is to form habits within your experience. Now, what this means … Before we even talk about if you have a product, for example, how that looks like. Even before someone converts, for pre-customers, pre-clients, you have to make sure that they don’t have to work hard to understand your websites. We have to conform to their habits. So for example, you need to make sure that your colors on your website are consistent, that the font is the same, that you’re placing certain buttons in the same places on every page, that the size … And of course, the size of different symbols and icons on your website are the same, but there’s a consistency within your navigations and menu. And of course, that the information hierarchy is incredibly, incredibly important here. It means that people can go on to your website, never being on it before, but know exactly what step they need to take next, what to look at, what to read, and what to click on.
New isn’t always better
So these sound very straightforward; however, so many brands try to reinvent the wheel. We try to create new experiences. We try to follow these trends, like these design trends. Or so many brands want to do a complete redesign, changing the most basic steps in their flow and confusing people. Because we want to look better, we want it to be great. And then what we do is we start creating these new ideas we want to look better, and people get really confused. So what you want to do is create a consistent flow for people so that when they arrive on your website or if they’re looking at a landing page, the different objects that they see are similar. They can recognize them and they know what to look at and where to click.
Obviously, for existing customers or users, you want to make sure that every time they come back to your site, whether if it’s an ecommerce site or product, they can perform certain actions within seconds without so much of a thought. So they’ll know exactly where the login button is or they’ll know exactly how to add an item to their cart or they’ll know exactly, “Oh, blue means call to action button.” That means that there’s no other button on the website that’s blue. There’s nothing competing with it. Now, again, this all sounds so straightforward, but I have seen this on countless websites. Calls to action that are in multiple colors, multiple fonts, multiple sizes, on the same page. All sorts of things that move around all the time. So it’s important to create a consistent experience that forms some sort of habit and helps that System 1 not think, not need to process anything, but just intuitively do things quickly. So that’s number one.
Number two, and we’ve spoken about this quite a bit and we will talk about this a lot during this month of psychology and persuasion, you want to start highlighting the emotional value. So System 1 is triggered largely by our emotions and how quickly we see value. So today’s search for solutions online involve opening multiple tabs of competitors and “evaluating them.” And I say this because we spend about three to five seconds evaluating each tab before jumping to the next one. But that’s hardly enough time to really evaluate something. However, this is the world that we live in right now. It’s fast-paced, it’s quick. We don’t have time. Very, very similar to System 1.
So your goal is to appeal to that quick intuitive brain and to hit it with that emotion. So how do you do this? Basically, you need to capture people’s attention within those three, five seconds or they’re gone. Now, you do that by making it about them, not about your product or solution. You do that by highlighting their value. So your goal is that when they land on your landing page or your website, they can immediately say, “Whoa, that’s exactly the outcome I’m looking for.” And then they’ll stay on your website and they’ll start scrolling and reading and going down that rabbit hole. So it’s the difference between saying in a headline, “The best task management or project management platform,” versus saying, “Make more time for the work that matters most.” And that’s Asana’s headline on their homepage. Because it highlights the end result. Remember when we said that what people really care about is the end result, the value that’s in it for them. It’s not the product.
So when we highlight that, and we don’t say, “Hey, this is the company or this is the price or this is the product. This is what we do,” and instead we say, “Hey, using this product, you could end up looking like this, doing this, performing this, feeling like this,” you’re essentially appealing to System 1. And again, we’ll get into practical ways of how to do this over the next few weeks.
Our psychological triggers and cognitive biases
Number three is essentially leveraging or avoiding psychological triggers. Now, what you need to do here is basically get the [inaudible 00:23:05] with cognitive biases and psychological triggers. And here’s what I mean by that. So this is a very scary image that you can see right now. But this is our brain on biases and psychological triggers. It’s so phenomenal. Different biases and psychological triggers affect our decision-making process. So cognitive biases, that’s the big name for it. That’s the scientific name for it. But a lot of people call it psychological triggers. They’re different, unconscious triggers that affect our decisions. They’re basically shortcuts that our lazy brain takes to make a decision and to make us also feel comfortable with it when we look back at it. So it’s all sorts of these glitches that happen in our brain based on how things are presented to us, based on how we see things, or things that have happened to us in the past that make it easier for us to make a decision.
So System 1 will kick in and say, “Oh, this bias goes in here. This bias affects that. And then System 2 will say, “Oh, okay. I know the answer to this.” Now, as you can see in this image, there are hundreds of triggers and unconscious psychological triggers that affect our decision-making process. Essentially, we make irrational decisions all the time, but we have no idea that we’re actually doing them. And we immediately afterwards justify those with logical “reasons.” For example, say you’re buying an expensive car that you don’t need or maybe you’re making excuses for purchasing, like an expensive top because you have an event. Or maybe you have rational reasons to why you’re smoking, why you text and drive, why you’re overeating. Like maybe you’re having a rough day, maybe you’re nervous, maybe you just went for a breakup. All these things are System 1 kicking in and saying, “It’s okay to text and drive. I just really need to answer this text message.” And later, you’re justifying it by saying, “Well, I just have to really … The babysitter is waiting at home. She’s really worried. I have to relieve her.” Whatever it is. But we’re just constantly making these decisions through System 1 and then kind of rationalizing them.
So the key to growing your conversions and your business is actually understanding these biases. And the biases that you can see, by the way, are all these here in this inner ring, not the ones on the outside. But it’s understanding these biases and utilizing them in your marketing, in your design, in AB tests, in copy. And when I say utilizing, that also means avoiding them or using them. So there’s all sorts of different biases you may want to avoid or you might want to use.
So in this worksheet that you have here, and I’m going to link to it in the show notes. You can immediately download it. You’ll find dozens of cognitive biases that affect our decisions. Now, at GetUplift, we use them all the time to increase sales, for clients, to optimize retention, so to get more people to come back, to get more open rates on emails, or increase engagements with email sequences, to increase affinity towards brands, and much, much more. So our goal is to constantly identify the different psychological triggers that may be affecting our specific audience and use them or avoid them.
Now, during the month of February, we’re going to dive deeper into these biases and these psychological triggers. And I’m going to give you exact step-by-step action plans for each one. So for example, in next week’s live workshop, we’ll be talking about the Six Principles of Cialdini and how you can use them to increase conversions immediately. So Cialdini is someone that people, that marketers often refer to because he has very easy to understand six principles that you can follow. And if you use them in your marketing, you can increase conversions. So I’m going to get into those next week and really explain how we can use them.
Now, later in the month, we’ll dive into specific biases that we’re using all the time to increase conversions and other psychology-based changes that you can make to your funnels to increase conversions. So try to make this workshop/intro into the importance of psychology and persuasion really short because you’re going to be watching this before, during, after work, and I just wanted to give you the most important pillars and basic knowledge about it. So as I said, next week, we will be diving into everything. If you have any questions, please post them in the comments, and I will be happy … Well, me and my team will be very happy to answer them. Thank you so much for taking the time to watch this today. Have a great day, evening, or night, wherever you are. Bye.
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