In a recent study conducted on SAAS companies, it has been concluded that the companies are spending a staggering 46% of their revenue on Sales & Marketing.
Acquiring new customers is becoming a primary focus for revenue growth, even though it is widely accepted to focus on increasing revenue from existing customers. Not all companies have tasted the same amount of success through upselling and cross-selling to their existing customers.
In this competitive world, where every online business is fighting to get a market share it becomes quite evident that the regular marketing techniques do not work anymore.
This calls for the companies to adopt some persuasive techniques to convince online visitors to convert into customers.
As part of the CXL free mini degree, I have got an opportunity to learn some persuasive techniques which business can adopt on their website landing pages to increase the conversion rates.
Let’s dive in straight and talk about 5 of these techniques:
Focusing effect:
According to a study conducted by Microsoft soft in 2018, the average human being has an attention span of 8 seconds. This metric has been decreasing sharply from 12 seconds in the year 2000.
Human Beings have a small attention span
With many businesses turning online and with the widespread information available on our screens it becomes hard for an average human being to consume the data available, in these circumstances, the average attention span is poised to decrease more in the coming months.
It is very important for any business to attract the visitor within these 8 seconds.
This can be achieved by following these 3 aspects and keeping the focussing effect intact of an online visitor.
- Keep it short
- Keep it simple
- Three’s a charm
Reciprocity:
The most well-known psychologist Robert Cialdini in his book “Influence” has indicated 7 principles of persuasive techniques and Reciprocity is the first in the list.
He said that Human beings by nature feel obliged to return the favor and pay back their debts.
Give your visitors a little something to get little something in return
Offer free tools, free ebook downloads, or free goodies to your website visitors that they can benefit from and they will be more likely to buy something from you in return.
If your products are expensive, it is better to avoid asking for a sale from your website visitors and instead offer a free download in exchange for their email. Then you start nurturing the lead by constantly adding more value until you finally ask for the sale.
Hubspot uses this technique effectively to increase their sales and conversions. They offer free CRM, Marketing, Sales, and Service tools to attract new customers.
Hubspot also offers a free suite of online courses in topics ranging from Advertising, Agencies, Blogging, Branding, CTA’s, Content, etc.
These topics are relevant to HubSpot’s buyer’s personas.
By spreading knowledge for free, they are able to get more and more new customers and increase their sales.
Social Proof:
Social proof is derived from the human psychology of
Playing it safe
People do not want to take risks and base their purchasing decisions by looking at other people's reviews and recommendations.
Human beings tend to observe other’s action and like to follow them
In one of the studies conducted by Bizrate Insights in 2019, nearly 92% of the online buyers tend to read the reviews before making buying decisions.
Just think about your past purchases, how many times did we look for reviews from previous customers before purchasing anything online?
This brings in an important aspect of a persuasive technique called social proof.
Below are the two key components of social proof:
1) Nobody wants to be the only idiot buying your stuff.
2) People don’t want to make the wrong choice at the risk of being judged by their spouses, bosses, colleagues, or friends.
The bigger the risk, the bigger the effect social proof can have on your visitors to make buying decisions.
Amazon uses social proof effectively to drive sales. They provide emphasis and encourage their buyers to provide reviews of the product on their websites.
Customer reviews are just one aspect of social proof. There are many other ways in which we can drive our sales using social proof.
- Customer testimonials
- Promote best sellers
- Star ratings
- Industry awards and rankings
- Influencers recommendations
- Create urgency by highlighting the demand
- Use case studies
- Recently sold notifications
Authority:
Use the authority to drive sales. People, in general, have a tendency to obey figures of authority.
If you can, choose an authority figure to help you make your case. Here are a few examples:
- Use prominent athletes if you want to sell fitness products.
- Use well-known doctors and medical researchers on health-related websites.
- Use famous chefs if you want to sell food.
Media coverage mentions have the same authority effect as an influencer. Below are some media mentions used by the websites.
Security seals and Verified logos have a similar effect in influencing the buyers purchasing decisions.
Scarcity:
If you believe something is in short supply, you want it more. Scarcity is defined as the perception of products seeming to become more attractive when their perceived availability is rather limited.
The scarcity of the product inculcates FOMO (Fear of Missing Out) in human beings and they don’t want to miss an opportunity.
There are two elements of scarcity that you can use:
- Quantity (only 3 items left!)
- Time (last 2 days to join!)
Scarcity is one of the most popular persuasive techniques advocated by Cialdini. Many companies use this principle effectively repeatedly to boost conversions and increase sales.
Hotel and Airline industries use this principle effectively in driving sales but this can be applied to any SAAS business to boost conversions.
By testing different offers over a period business can understand what offer works for their audience. This can be used repeatedly to drive more sales and conversions.
In the above example, Groupon uses limited time scarcity to drive the sales of the Spa.
Using these principles, SAAS companies can increase their conversions and grow their sales and revenue.