Technology helps you collect customer data, but it doesn’t work wonders. It’s up to you how you’ll use what you know about your customers, dig a little deeper through qualitative research and transform your customer insights into optimized user experiences.
What are you missing from creating that one-of-a-kind customer experience that no other brand could compete with? We’ve asked Guido X Jansen to share his knowledge of behavioral economics and eCommerce.
Guido X Jansen is Global Evangelist at Spryker, Cognitive Psychologist & Community builder. If he were asked to describe himself in just one sentence, Guido would say, “I’m a psychologist working in eCommerce.” Guido X Jansen applies his knowledge of behavioral economics and the limitations of the human brain into a working environment.
He studied Applied Cognitive Psychology, which allows him to analyze how people behave in certain situations where mistakes happen, or something doesn’t go as people expected it to go or as the system’s designer expected it to go.
We invited Guido X Jansen to our “Top 100 eCommerce experts” interview series to share his thoughts on:
- Analyzing customer behavior during online shopping sessions;
- Using customer data wisely and responsibly;
- Transforming customer data into better experiences;
- Ways to improve customer relationship;
- What eCommerce businesses should focus on in 2022.
Analyzing customer behavior
Alexandra Panaitescu: You’re a psychologist focused on eCommerce, so store owners request your help to understand the target audience and online behavior. What should store owners keep in mind when analyzing customer behavior during an online session?
Guido X Jansen: Consumers are rarely fully focused when buying online, and that’s the harsh truth for many running a shop.
How the brain behaves during shopping is very context-dependent. If you have someone in a lab setting, it might be the only thing they’re doing at that time, and they’re entirely focused. It’s easier to remember information, read some fine print, look at applied taxes, etc.
In a lab setting, we can observe things like where they’re dropping off, giving you a hint of what could be improved. But then you get back to your data, and you look at your analytics to realize that there are still many people dropping off.
In a real-life setting, your customers might have some kids shouting in the background, they might think about all the groceries they have to do, what to cook for dinner tonight, they have a meeting coming up in 5 minutes, and so on.
Keep in mind the differences between shopping online and shopping offline. It’s easy for people to go to your website, but it might be harder to buy something compared to offline. This is why online conversion rates are usually way worse than offline.
If you’re looking at a real-life store, like a clothing store, on average, 25-30% of the people that go into that store will buy something. That doesn’t happen online, and these conversion rates would be really impressive.
“The harsh truth is consumers are rarely fully focused during an online shopping session.”
> Eager to find more about your customers? Discover what positive changes the pandemic brought in neuromarketing from our interview with Roger Dooley.
Improving relationships with customers
A.P.: One of the greatest challenges of online stores is the lack of face-to-face human interaction. Online businesses struggle to find substitutes, create connections, and build trust. From your perspective as a psychologist, what is the biggest mistake stores make in their relationship with customers?
Guido X Jansen: Because of the development in the market, we see more and more marketplaces coming around. Amazon is a prime example. These marketplaces are pretty impersonal. Many different merchants are selling their products, hoping to get someone to buy them. It’s about the volume, not the relationship.
If you want to build a brand, you really need to focus on the relationship with your customers. You should start with user research to figure out what’s important for your customers, why they are buying your products or services. Then, you should create a community around your brand.
Creating a community is one of the few unique things you can do as a company and can’t be copied by any competitor. Even if a competitor has a better product than you, it would be really hard to steal that customer from you.
The community will help you grow your consumer base by telling their friends and family, “Hey, I found this cool online store, they have great products and services, and the people who work there are so cool.”
“Creating a community is one of the few things you can do as a company that is unique for you and can’t be copied by any other competitor. ”
> Read the advice Brian Massey has for your online store when it comes to beating the competition.
Using customer data wisely and responsibly
A.P.: Online stores can use cognitive biases to drive more sales. What’s your advice for online store owners that want to use them to influence buying decisions?
Guido X Jansen: You shouldn’t look at cognitive biases and apply them to your website right away. Start with qualitative and quantitative research instead. Figure out where people are getting stuck and do qualitative research to find out why they’re getting stuck.
That’s the point when you start looking at those biases and say, “Ok, how can we apply these biases? Can we match the bias with the problem that our customer is having?” That’s the approach I would recommend.
Make sure to validate biases. That’s why we’re doing A/B testing in the first place. It doesn’t always work.
Let me give you an example from finance. Adding social proof on banking websites only works for socially acceptable products, like savings accounts or a mortgage for a new house. But if someone needs a loan because their car broke down and they don’t have enough money to pay, that’s not something they’re going to share on Facebook with their friends.
“Make sure to validate the biases you’re trying to implement to your website.”
A.P.: Using all this knowledge about consumer behavior comes with great responsibility. Where is the line between persuasion and manipulation in eCommerce?
Guido X Jansen: To ensure you’re not pushing the limits, always think about how you’re helping the customers improve their lives and not getting them into more trouble.
You should be very careful about how far you want to push things and think about the consequences your tactics might have on your customers. Selling an extra pair of shoes doesn’t compare with doubling the loan length.
Always discuss with your team and avoid gray areas because there are many ways you can promote your products just by being very clear and honest. When you’re hiding things or trying to frame things in another way, people might get suspicious and write about it online, generating negative press, and that’s not something that you want.
“To use customer data responsibly, always think about how you’re helping the customers improve their lives and not getting them into more trouble.”
> Learn from Jeffrey Eisenberg how to see beyond customer data and act with empathy to build strong relationships.
Transforming customer data into better experiences
A.P.: There’s a long way to go between collecting customer data and using it as a resource to create better experiences. What should eCommerce businesses pay attention to before transforming customer behavior data into eCommerce experience optimization initiatives?
Guido X Jansen: A good start for experience optimization should be fixing functional problems affecting the usability. But the most important favor you can do your company is to start doing more user research.
We all have a lot of insights on where things are going wrong on our websites and where people drop off in the funnel, but few know why people aren’t buying. Figuring out “the why” is vital.
- Why is 95% of the visitors not buying?
- Are they just browsing and using you as a catalog to buy offline?
- Do you have a UX or design problem?
- Do they think your prices are too high?
- Do they trust you?
You need answers to find where the biggest user experience gap is and where you should put your efforts so you can really make a difference in terms of customer lifetime value.
I know there’s a lot of great content on Omniconvert’s website on customer lifetime value optimization with advice you can apply for your website.
A.P.: What type of user research can help stores see beyond analytics?
Guido X Jansen: When I say user research, it could be anything from user surveys, heat maps, face-to-face interviews with people in your target.
I once worked with a Swedish flower company, and we did user research with a small group, asking them to buy flowers online and observing their behavior while using a laptop or a phone:
- Where are they going?
- What terms are they googling for?
- What is important to them?
When we did the experiment with Swedish people, we noticed that they went down and started buying flowers because they already knew the brand, being one of the top 3 flower companies in Sweden.
But when the Swedish flower company entered the Netherlands, we did the same experiment and noticed that users looked for famous local brands. If they entered the Swedish company’s website, they looked for elements that build trust like return policy, delivery time, or reviews.
User research is a must if you’re selling across different countries. You might have the same website and products, but your customers might have completely different backgrounds and knowledge about your company.
Advice for eCommerce companies in 2022
A.P.: Looking at the big picture of the past two years and how the pandemic changed consumer behavior, what would be your advice for eCommerce companies in 2022?
Guido X Jansen: If you expect things to go back to how they were in 2019, I think you’re going to have a hard time. We can expect that the restrictions regarding the pandemic will continue for a while. Make sure you’re agile and change based on customer needs. Consumer behavior can vary a lot.
Obviously, online proved to be a haven for many companies in the past two years. But it also means that you have a completely different demographic buying from you. Previously, you mainly had internet-savvy people browsing your website, which may have changed depending on what you sell. You need to address this new demographic and figure out what works best.
Physical stores might become more like inspirational stores, where people go for the offline experience. Still, they might begin to look for elements they can find online, like full product line available or the option to order and get the products delivered at home.
Customer lifetime value optimization becomes more and more critical. As I said earlier, creating a community around your brand is one of the best things you can do for your company. Make sure they stay close and happy by paying attention to their needs. I hope that more and more companies will focus on CLV.
> Theodore Moulos believes that professionals in eCommerce have a lot to learn from SaaS managers in terms of CLV. Read the interview and find out why.
We hope that this interview gave you a better understanding of using customer behavior data in optimizing experiences. Stay on top of customers’ minds by building a solid community around your brand that no competitor can equal.
Here are seven takeaways from our interview with Guido X Jansen:
- “The harsh truth is consumers are rarely fully focused during an online shopping session.”
- “Creating a community is one of the few things you can do as a company that is unique for you and can’t be copied by any other competitor. ”
- “Make sure to validate the biases you’re trying to implement to your website.”
- “To use customer data responsibly, always think about how you’re helping the customers improve their lives and not getting them into more trouble.”
- “If you want to create better experiences, the most important favor you can do your company is to start doing more user research.”
- “User research is a must if you’re selling across different countries. You might have the same website and products, but your customers might have completely different backgrounds and knowledge about your company.”
- “If you expect things to go back to how they were in 2019, I think you’re going to have a hard time. Customer lifetime value optimization becomes more and more critical.”
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