The Secret to Loss Aversion-centric Design

Those who follow the behavioral economics space already know that loss aversion plays a huge role in how humans make decisions, but how does it apply to marketing and design?

The term itself - Loss Aversion - is fairly self explanatory: a distaste for or disliking of loss. On the surface, it seems almost too obvious - who among us doesn’t dislike loss? When we look at loss aversion in terms of the behavioral economics of design, however, there is more to the story than meets the eye.

It seems logical that a gain or loss of equal value would produce equal amounts of joy or sorrow, but this is not the case. Imagine that I offer you a bet. I’ll flip a coin and if it lands on heads, I’ll give you $20. If it lands on tails, you have to give me $20. Would take the bet? Most people would need to have the chance to win at least double the potential loss before they would play. Psychologists have found that the potential of loss tends to weigh heavier and cause stronger emotions in people than a potential gain. The weight of the fear of loss can impact the decision making process, more so than the desire for gain. This is the root of loss aversion.

So what’s the secret?

The key to utilizing loss aversion is all in how you frame your offering. In marketing, it’s natural want to talk extensively about the features and benefits a user stands to gain from the offering. What the theory of loss aversion tells us, however, is that highlighting potential losses such as FOMO (fear of missing out) might actually capture a customer’s attention and emotional interest more. The followup to this is to make clear what actions are necessary in order to avoid the loss you’ve just highlighted. This could be buying a certain product, signing up for an email list, or clicking on a specific offer. After all, psychological studies on loss aversion tell us that people are actually willing to risk more to avoid loss than they are to gain something. Framing a benefit as a way to avoid loss will make prospective customers more willing to take the risk of pursuing your offering.

Implementation

With this understanding of loss aversion it’s time to move on to design and implementation. The most important thing is to run your marketing materials through the “loss aversion filter” - what does your user stand to lose. Here are some best practices you can start with.

Create Ownership

If you can, offer a free trial or a money back guarantee. This technique works especially well with higher value considered purchases, but can be applied to nearly any product. By giving your customer the chance to “own” your product or service, it will be that much harder to give it up.

Frame the Loss

When framing a product, describe losses in terms of actions visitors can take to prevent them. An example in email marketing would be, “Order within the next 6 hours or your free shipping offer will expire.” This way you directly correlate the desired action with loss prevention in the mind of the customer.

Benefits are Facts

Wherever possible, the benefits of your product or service should be expressed as nouns. This leads customers to view them as guaranteed and without risk. For example, you could describe a product as being made from “ultra durable material,” for a benefit statement, and say “won’t rip or tear” to appeal to the loss averse consumer.

Understanding loss aversion is an incredible eye opener, and you’ll start to see these, and other tactics in marketing materials and campaigns all over the world. The real secret is to use these same techniques in your own marketing efforts. WEVO helps pinpoint these opportunities and identify how effectively you have framed your offerings from a wide variety of behavioral economic principles, including loss aversion. With WEVO, you can test and compare different versions of your site before coding or launching, to ensure you put forth the site that leads to maximum conversion, and a more satisfied customer.

How to Implement Personalized Marketing the Smart Way

It is no surprise that brands and consumers alike are embracing personalization in marketing more and more. After all, the more consumers are bombarded with mass marketing and irrelevant advertising, the more inclined they are to just tune it all out. Consumers are much more likely to respond positively to marketing tailored to their unique likes/dislikes, expectations, hopes, and concerns. Personalized marketing tends to lead to a better relationship with your company perceived by customers and prospects, which then leads to more conversion.

However, highly specific personas of your ideal customer will only be applicable to a small handful of people viewing your website or other marketing materials. After all, your web page viewers aren’t personas, they’re real human beings.

Roadblocks to Personalized Marketing

It is essential to do research and have information on your different audience segments before you can personalize your marketing effectively. Most marketers understand this, but are still left feeling unable to personalize their marketing effectively due to a lack of insights, or restraints on time and resources available to collect the necessary insights.

Unfortunately, very few companies have the advantages of Netflix and Amazon of having an unmatched collection of data on basically every consumer that has ever opened an internet browser. Without this amount of data or insights from actual human beings, any personalization you do will be solely based on assumptions.

Once someone is a customer, or has at least raised their hand, you can start collecting data and information on them to personalize their experience. You can keep track of their demographics, psychographics, what they clicked, what pages they viewed, etc. But what about consumers who are having their first interaction with your company-the consumers you don’t know? How can you ensure that your website and landing pages speak to them? You’ll want to know and track what messaging, segmenting, and advertising worked for them.

The Solution

With WEVO, you don’t need vast amounts of data or time at your disposal to gain insights prior to adding personalization to your marketing. We collect feedback on your web page from actual human beings based on your target demographics, and our AI technology brings you only the most valuable feedback, which you can then sift through by demographics such as age and gender. This helps you understand how different segments view your page, even those that are not already customers. Within our platform you can see page visitors’ likes, dislikes, expectations, hopes, and concerns, all within a number of days.

WEVO allows you to test multiple pages or multiple versions of pages. This way you can see what pages and/or elements work best with what segments of your audience. This can then be utilized to perfect your personalized marketing. Contact WEVO today to collect insights to inform your personalized marketing.

Why Webpage Conversion Optimization is not One-Size-Fits-All

It would certainly make things easier for digital marketers everywhere if there were a nice, neat set of rules to follow to increase conversion on their webpages. If only we could all make our call-to-action buttons blue, our font Times New Roman, write a simple description of our offering in plain, uncreative language, and guarantee millions of conversions. Unfortunately, this nice, neat set of rules does not exist.

“What’s the Right Button Color?”

When it comes to getting visitors to convert on your webpage, there really are no “best practices.” Every digital marketing article or blog you come across has a different stance on what button color leads to the most conversions. Some say green because it symbolizes “go”, some call for a vibrant blue, and some are champions of the BOB (Big Orange Button). No matter how amusing the online debate on call-to-action button color gets, the truth is there will never really be a winner. Because there isn’t just one correct button color to make your page visitors convert. The only way to find out what the right button color for your page is, is to put it to the test.

The same is true of all elements of your page. What works and doesn’t work can drastically change from industry to industry, business to business, and page to page. Elements that might be generally accepted as good for conversion may not work for your audience and vice versa.

Knowing Your Audience Gets You Closer to Conversion

To increase conversion, you must understand YOUR audience. It is essential to know not only what they like and dislike, but also their expectations, their desires, and their concerns. As digital marketers we need to look at our pages from our audience’s perspective and make sure that what matters to them is being addressed, and what doesn’t matter to them isn’t taking up valuable space on our websites.

There is no such thing as mass marketing anymore.

As marketers we cannot just put out something that we think can be generally accepted as appealing by the entire human population. We must understand what our audience wants and needs and WHY. This understanding is what guides us to add elements, design, and content to our pages that will help visitors understand how clicking the call-to-action button will bring them one step closer to what they want.

WEVO is Here to Help

At WEVO, we deliver individualized customer insights from your audience to help you understand their expectations and what they want from your page. WEVO’s conversion drivers help you understand what goals your page needs to accomplish to get visitors to convert. There may not be a list of best practices for conversion optimization, but WEVO can show you what will work best for your audience.

Adding More Insight to Your Visitor's Experience

Every visitor who lands on your website or landing page comes with a pre existing set of concerns, needs, hopes, or aspirations that guide how they evaluate and engage with your page. Shining a light on the aspirations and addressing the concerns can make a huge difference in visitors’ perception of both your brand and your offering.

Traditionally, these hopes and fears have been largely hidden from digital marketers, only accessible through small focus groups and user testing. While helpful, these findings (like most results from user testing and focus groups) are limited by the law of small numbers. At best, this means that you only have access to a small portion of the needs and concerns of your prospective audience - at worst, you might design a landing page that speaks to the wrong fears, and highlights the wrong features. WEVO’s latest update solves this problem.

Introducing Audience Expectations

With the release of audience expectations, digital marketers can now see exactly what matters most to their visitors and and how well each page addresses these hopes and concerns. At a glance, see the most significant expectations your target audience has when coming to your page and exactly how well your page met or didn’t meet these expectations.

Want more? Dive deeper into the qualitative feedback from your audience and understand why the page did or didn’t meet their original expectations... in their own words

The most effective pages speak to the hopes and fears of their target audience. They address aspirations of a better career in higher education, answer key questions interest rates in finance, or talk about quality of care for insurance. With help from WEVO, digital marketers are better able to adapt messaging and content to tailor to what matters most to your target audience.