Why is it that regular customers tend to spend more than new ones? Check out our newest blog post to learn about Shopping Momentum and use it in your daily business operations.
Shopping Momentum - what is it and how you can use it to your advantage?
Here at the Voucherify, we’re big advocates of giving gifts to your customers. Whether to promote a sense of reciprocity or to create a feeling of endowment, getting something in your customers’ shopping carts is a great way to encourage them to shop with you. However, it turns out that here’s an even better way to get the ball rolling than by giving gifts: make your customers pay instead.
What is a Shopping Momentum
Normally we think of getting customers to buy something as the end goal rather than the starting point, but just putting your customers into the mindset of buying rather than browsing is incredibly powerful. Illustrating this, a 2007 article by Ravi Dhar, Joel Huber, and Uzma Khan (of the Yale, Duke, and Stanford business schools respectively) documented an effect they dubbed “Shopping Momentum.”
The Shopping Momentum Effect describes something that most impulse buyers may already suspect to be true: consumers who choose to make a purchase are subsequently much more likely to make another, unrelated purchase. In one of the authors’ examples, participants first chose whether or not to buy a light bulb, and then chose whether or not to buy a keychain. If they did not buy the light bulb, there was a 31% chance that they would choose to buy the keychain, but if they did buy the light bulb, then the likelihood of them buying the keychain more than doubled to 67%!
In another example, the authors compared the effect of Shopping Momentum to the effect of giving customers a gift. Participants were either given a pen as a gift or asked if they wanted to buy a pen, and then they were given the chance to buy a keychain. If they received the pen as a gift, 53% chose to buy the keychain, which is not bad at all. However, if they had the opportunity to buy the pen, 78% chose to buy the keychain!
Implementation of Mindsets
Why are customers more likely to buy something after buying something else? Conceptually, this is similar to a Foot-in-the-Door Effect, namely that once your customers overcome the hurdle of buying their first product (or opening an account or at least placing something in their cart), they are much more comfortable buying another one. However, according to the Dhar, Huber, and Khan paper, the story is a little bit more interesting.
Building on work by Peter Gollwitzer, they propose that there are fundamentally two ways customers think about potential purchases:
- They can be in a deliberative mindset, in which they evaluate the product and think about its pros and cons.
- They can be in an implementation mindset, in which they think about what they need to do in order to actually make a purchase.
If your customers are thinking about your products and your deals in a full implementation mindset, then they are focusing on the “when” and “how” of the purchase instead of the “why”, and this makes them much more likely to buy something.
How does this relate to Shopping Momentum? The authors show that when customers buy the first item, it pushes them out of a deliberative mindset and into an implementation mindset, making it more likely they will buy other products too. More interestingly, they showed that by simply putting consumers into an implementation mindset using an entirely different method, they could produce a Shopping Momentum effect without the participants even making an initial purchase. For example, if participants were asked to write down the steps they would need to take in order to buy a new car (which got them thinking about implementation), then 66% of them opted to buy a keychain.
The Shopping Momentum Effect can be applied to retail strategy at two different levels.
The first strategy is to apply Shopping Momentum as simply the effect of buying something. Deals, promotions, or strongly tempting loss-leaders can serve as ways to get customers to buy something, which in turn will make them more likely to buy something else. Offering little things for a dollar that you could have otherwise given to them as a gift might also work, although the uptake will probably not be high.
In addition, anything you can do to reduce the friction customers experience during the buying process will be very helpful. They are much more likely to follow through with that initial bait purchase if the process of buying and paying is very easy (such as with Amazon’s One-Click functionality). And of course, once they have made a purchase it needs to be easy for them to see and buy other products.
The second strategy is to play with the underlying cause of Shopping Momentum, namely the implementation mind-set. One way might be to highlight the steps needed to purchase a product in the space where customers might normally expect to see product information (with that information moved further down the page). By putting this implementation information front-and-center, your customers will be more likely to start thinking in these terms.
You could do something similar to the study, namely ask your customers to consider the process they need to follow in order to buy something (they don’t necessarily need to give you an answer), or more subtly, ask them more innocuous implementation questions such as “When do you need this by?” or “How do you plan to pay?”
This ties in nicely with research demonstrating that one of the most potent ways to encourage people to follow through with behaviour is to encourage them to think about a plan of action. Beginning with a 1965 paper by Howard Leventhal and colleagues, this same idea is now frequently applied by political campaigns to encourage constituents to go to the polls. Likewise, any wording that encourages your customers to think about how they can buy your product may make them more inclined to do so.
- Your customers are much more likely to buy something if they have already bought something else.
- This is because they are more likely to buy something if they are thinking about following-through with a purchase rather than thinking about the pros and cons of a purchase.
- Encourage your customers to start thinking about how to buy your products.
Are you ready to use Shopping momentum in practice?