The Brain and the Shopping Cart, How System 1 Dominates Everything

I've had the good opportunity to know Rishi for many years and I consider him a true thought leader in the world of conversion rate optimization.  At StatBid Summit he gave a fantastic presentation on the battling forces in our brains that drive decision making.

Transcript

Rishi Rawat:        Hello everyone. I'm gonna talk about the relationship between the human brain and the shopping cart. And, what I'd like to start off by saying is that, think of the human brain as divided into two logical sections, System one and System two. System one is impulsive, it's very fast, and it kicks in pretty much instantaneously. System two is slow, it's methodical, it's effortful and deliberate.
                    And, whenever you are kind of making a big decision, you really want to use System two. Unfortunately of course, that almost never happens. System one kicks in so fast, we don't even realize it. We rationalize it by saying it's System two, but it's truly System one. So I want to talk today about what System one is, what System two is, and as marketers, what does that mean for us and what do we do about it.
                    So, are for me, the whole started in 2010, I was running the experiment for a client, and this is the experiment. It's a $98 product, it was a high margin item for them, but it had a relatively low conversion rate, so that made me test in the control group 98 bucks [AccuCord 00:01:19], 98 bucks for test group 98 bucks [AccuCord 00:01:21]. We gave a two dollar discount, but we didn't explain what the discount was and why we gave a discount.
                    If system two was working, what we were seeing is a very small impact in conversion rate. But what we saw was a 20% lift in conversion rates, fully [inaudible 00:01:37] it's significant. And what that means is that, the unexpected savings of two dollars was overriding the decision-making process. And so this is clear evidence that system one dominates the heck out of everything. And so, the point is that over the last 10 years, I've developed a system of seven techniques that we use to manipulate system one. And I wanna talk about those.
                    By the way, I should mention that the examples over here are based on actual tests but, I'm gonna illustrate there's some made up examples because obviously, I can't share actual data. So, getting to the story element. Story is the emotions you evoke, and I'm gonna show you the best ad of all time. So the best ad of all time is an old ad for Rolls Royce. It says at 60 miles an hour, the loudest noise in his Rolls Royce comes from the electric clock.
                    This is a excellent example, the best example of great story-telling. I have a 1987 Sears catalog over here. And for those of you who wanna learn more about story-telling you should read it, it's phenomenal. And so, the next thing I wanna talk about is, trust. That's the next level that we use. I don't have to talk to you guys too much about trust, 'cause I think you'll understand it. But, trust essentially is talking about the return policy, your customer reviews, your awards and standard stuff.
                    But it is an important level, and so it's important to acknowledge it. The third element I wanna talk about is price. And, the thing I wanna say about price is that we misunderstand price to mean discounts and things like that. It's not at all round [inaudible 00:03:04] but, price means to powerfully explain who you are and what you stand for. So, in this test we add the button called price explanation.
                    When you click on it, we explain why we're the highest priced product in world. Not in the world, but in that category. We notice a 49% improvement in conversion rates, we gave no discount whatsoever at all. And that's the whole point of justifying price. There's another example I'm gonna show, where when you land on the website, before you even see the product page, there's a band that appears that says what do you care more about price, quality, or the combination between the both? 
                    And you'll find that almost everybody clicks the balance between the price and quality. And what this does, is it primes you to become price insensitive. And so, even before you go to the product page, you've now already told yourself I care about quality. And, it turns out that, that improves conversion rates as well so, this is another example. I want to talk about cognitive ease. 20% of the content on your website is tried in 80% of value.
                    Triple downs on the 20% and forget the rest and you'll automatically improve conversion rates. The next thing I wanna talk about is novelty. Novelty's a design hook to kind of present [inaudible 00:04:06] of people in a way that they didn't expect it, and that's how it works. So here they've got tiered pricing and what we did was we broke it down into a graph. As you increase your quantity, the claw moves to show you what kind of [inaudible 00:04:19], and it's gonna have an extreme but the claw moves to show what price tier you're in.
                    You'll see it move from that screen to the next screen. And this is an ... There we go. As you increase the quantity, and this is an example of novelty. Now, the problem with novelty is that it has a dark side, which is that as people start seeing ... Consumers see the novelty element over and over again and it loses effectiveness. As competitors use that same approach, it loses effectiveness. And so, I'm gonna show you guys ... I'm sure you've seen these kind of ads. 
                    Near the bottom it says, I don't wanna save money, right? These were super effective five years ago, nobody cares about them anymore. So, the novelty effect kind of wears off if you don't use it effectively. The next thing I wanna talk about on the next screen is another poke, or another level called play. And play means you're kind of having the attractive element to communicate to the user what makes you unique. 
                    And so, here's an example of a company that makes an external controller for managing lights for billboards. This is a very, very boring home page. And what we did was, we made a change to it where they have an app for how the product works. So we put the app on the home page. You can click it on and off, and when you do that, what it does is it turns the billboard on and off. And so, we're using the element of play to communicate exactly what they do.
                    I think the next element I wanna talk about is serendipity. And serendipity is when you are able to pick up information or drawn an inference about your user and then use that to communicate and market back to them. So here is an example from Gelcro. You get to their cart page, we know you're in Virginia, we say hey, did you know that in Virginia we've sold 91,000 mats. And so, this is an example of serendipity.
                    And then the final thing I wanna say is that ... Oh, there's another example of serendipity. It happened when I was on zazul.com and I happened to be there on a Wednesday. And when I got to their home page I saw a banner that said, you have a special promo, it's a midweek promo. And I was like, God damn, so lucky I happened to be here on a Wednesday, right? And, then I go back on a Thursday, and I find that they have a totally different promo, but the same amount. I go on a Monday, the same damn promo, right?

Speaker 2:          [crosstalk 00:06:25]

Rishi Rawat:        So, this is an example of serendipity as well. And, the final example I wanna share with you guys is when you combine elements. So you're never gonna see an example where play and serendipity is combined without seeing guess what percentage? That's an example of play. You click on reveal answer and when we reveal the answer we use a geolocation of this case, Michigan to communicate a message that relates to your geolocation. So, those are the examples I have. I'm done.

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