Effects Of Choice Positioning On Social Purchasing Behavior

As I discussed in How Prototype Theory Influences a Social Strategy, they way that people influence others and their decisions is based on their associations with certain words and phrases. For example, the word tree will most likely bring up an image of an oak or maple tree in a person’s mind, versus a less common tree, such as a birch or weeping willow.

The way that people associate words and phrases and let them influence his or her decisions is something that is related to both prototype theory and the types of information sharing discussed in Colleen Roller’s well-written article, How Anchoring, Ordering, Framing, and Loss Aversion Affect Decision Making.

Anchoring, Ordering, Framing, and Loss Aversion all affect the e-commerce behavior of Internet users around the world. The choices presented to social users and customers can influence how, when and to the extent that they spend money.

Anchoring

Anchoring is the best way to set a reference point for the person consuming the information. A good example here is displaying a “average donation amount” on the Facebook page or landing page.

The average donation amount will mostly likely be higher than the “last amount donated”, which in turn should lead to overall larger donation amounts from new donors. Because donors see what others are giving on average, they feel compelled to donate an amount of money in the same price range.

However, anchoring may also backfire. If a user logs goes to Facebook or your page with $1,500 in mind to donate, he or she may see the average donation amount of $100 as “low” and thus may lower their own donation.

Additionally, what a person considers a “generous donation” compared to a “small donation” is extremely relative dependent on their individual experiences. This is another example of how prototype theory relates to decision making.

Ordering

Courtesy of Inter-Studios.com

The order of listed items is a good way to set price point expectations—placing the most expensive items first makes it seem that the items at the bottom of the list are priced reasonably in comparison.

Ordering can also come in handy on e-commerce websites. When searching a particular product category, listing the items most expensive to least expensive by default may have the same effect.

The same goes for product packages and services offered on social media. Listing the most expensive (yet also most extensive) package at the top of a page may help sell more product packages overall, as users don’t experience sticker shock when they reach the bottom of the page.

Instead, a users will read from top to bottom, with more affordable packages being introduced as he or she scrolls down.

Framing

Framing deals with how things are presented to the customer or user. Greg Beddor, web marketing expert, provides an example: “If a product is promoted as having an average ‘20% refund rate’ versus a product that has a ‘80% satisfaction rate’, which is seems to be a better choice?”

Most customers would choose the product with the “80% satisfaction rate, even though they are the same statistic (just presented in different ways). The “20% refund rate” automatically frames the product negatively in the customer’s mind.

Even though the “80% satisfaction rate” clearly isn’t as great as a 95% satisfaction rate would be, it is still placing the word “satisfaction” in front of the customer which again, produces a positive connotation.

Loss Aversion

By giving concrete numbers for how a customer is going to be losing money, they may become more likely to buy a product. For example, telling a customer that they lose about $80 a month from vampire power versus suggesting they can “save money by buying a power strip!” is much more motivating.

Concrete numbers give a real-life example that customers can relate to. Several companies use loss aversion in their marketing campaigns by telling customers how much money they will save per month by switching from a competitor.

Summary

Anchoring, ordering, framing, and loss aversion (in addition to prototype theory) are all ways to present choices to users that can affect what choices they make when using social media for shopping and purchasing.

Placing products in a positive light while comparing its strengths to the competitor’s assets isn’t necessarily a new strategy, but the consideration of the psychological plays listed above would benefit most.