Decision Science - What Affects Our Decision Making Process?

  

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So, we'd all like to believe that we make rational decisions most of the time. Right?

Well, last week at FutureM I heard Aaron Reid and Nancy Harhut talk about the science of decision making and they tell us otherwise! In fact, only 5% of our decisions are based on a rational thought process. The other 95% is based in the sub-concious! Decisions already made by our mind, only to lead the other 95% to believe.

So, what factors influence our decision making process?

Loss Aversion

It's been scientifically proven that avoiding pain is peceived to be 2x more beneficial than gaining something. Hence subject lines, like those defined below, work well in getting people to open their emails.

"How to avoid..."
"Don't miss out!"
"What never to eat on airplanes"
"7 E-mail Marketing Rules To Follow Before Hitting Send"

Social Proof

One thing is for certain. When people are uncertain they follow the lead of others they know. Including testimonials has shown to increase order value by an order of 80%! Why? Because people believe in other people. And, worldwide a whopping 92% of the people trust earned media (like testimonials and recommendations) more than anything else.

Scarcity

Creating a sense of urgency and exclusivity is another way to nudge customers in making decisions. If your customer feels your're going to run out of inventory they are more likley to act fast and complete a purchase. Everyone from Amazon to Travelocity is employing this tactic.

Exclusivity has a similar effect. I mean, who doesn't want to belong to an exclusive club, right? If it's your last chance to respond to get a sneak preview at something, chances are you will. Think daily deal sites like HauteLook.com (Nordstrom) and MyHabit.com (Amazon) that bring you exclusive member-only offers!

Eye Magnet Words

Eye-magnet words are designed to draw your attention, increase engagement and generates more responses. And the big daddy of them all is FREE.

Remember the days of the "old" web when you clicked a Submit button to submit a form? If we know our conversions would get a boost by just changing that button to "Download the Free Whitepaper", then why not?

Examples of a few more eye-magnet words are:

New, Introducing (exclusivity)
Soon (scarcity)
Guarantee, Proven (removes risk, social proof)
Discover
Easy, Quick, Improved

Personalization

Personalization is another way to boost your response rates. Research shows that personalization with a name that sounds like or is similar to the user's name increased responses by 56% while a generic name resulted in a 30% increase. Not bad for 2 extra words!

Commitment/Consistency

Writing something down increases the level of commitment from your users. Once you have something positive in writing from the person, they feel tempted to demonstrate this commitment and are less likely to change their purchase behavior. Think of all the testimonials! People who provide testimonials to your product or service are less likely to purchase from a competitor.