Are you looking to get more traffic to your website?

Of course!

Last week, my pal Nick Reese interviewed me on how people can increase their web traffic and let me tell you this:

It turned out amazing and I’m giving it away for free.

This is the first time I’ve ever released this type of information on video before, so I think you should check it out. If you’re getting this via email, you’ll have to click on over to my website to view the video.

As a quick summary, in this video, you’ll learn my two sure-fire ways to more web traffic. You’ll also hear specific examples of how you can implement them on your website today.

For more specifics, here’s a list of what I talk about in this video:

• How to Convert “Random Visitors” into “Regular Visitors “

• How to Chase Hot News and Get Traffic

• The “Celebrity Bait” Traffic Strategy

• The “One Page One Goal” Method to Optimizing Your Website

There’s a few more things, but you’ll have to watch to find out. It won’t take but a few minutes!

Oh, and thank you Nick Reese for interviewing me. It was a lot of fun!

Back in the 1980s, two researchers, the nobel laureate Daniel Kahneman and Amos Tversky, stumbled on this fascinating facet of human buying behavior:

When people make purchases, they often create a product context before pulling the buy trigger.

What’s a product context?

By definition, product context is the facts that surround your product and smart online marketers know how to create this context so they can sell more stuff.

Before we dive into action plans, let me share the research experiment so you know exactly how product context works.

Is $5 Always Worth $5?

The short answer is, no. To prove it, Kahneman and Tversky posed this question to research participants:

Imagine you’re about to purchase a leather jacket for $125. The salesman informs you that the product you wish to buy is on sale for $120 at the other store. It’s 20 minutes drive away. Would you make the trip to the other store?

How many people do you think said yes?

Not many – only 29% of the research participants agreed to make the drive.

…But here’s where this experiment got interesting. When Kahneman and Tversky changed the product and price, more people agreed to make the drive for $5.

Imagine you’re about to purchase a calculator for $15. The salesman informs you that the product you wish to buy is on sale for $10 at the other store. It’s 20 minutes drive away. Would you make the trip to the other store?

How many agreed to make the drive now? Sixty-eight-percent. What a huge increase, right? What’s going on here?

The context was different. In the first example, $5 was 4% savings, whereas in the second $5 was 33% savings. Sure, it was the amount of money, for the same amount of time, but the % saved – the context – is what made people act.

Now let’s look at a real-life example of context at work.

How Amazon Uses Context to Sell Stuff Online

Remember, people tend to accept offers when they’re saving a significant percentage of money on their purchase. To see how this works online, look no further than Amazon.com.

If you take a second and load up one of their product pages, you’ll notice two different prices: list price and the price you pay. You’ll also see another number right below the price you pay which says “You save.”

How does this relate to context? Well, Amazon constructed a scenario where people believe they are AT the store with the better price. There’s no driving necessary. You see how much you’re saving and think you’re getting the good deal right here and right now.

This is a great tactic. It prevents your customers from shopping around at competitors. However, let’s say you don’t want to discount your products. How else can you use context to get sales?

Demonstrate Tremendous Value

When you demonstrate the amount of value people get from your product, they’ll often find that it’s cheaper than the price you’re selling it for. This essentially creates a discount without offering a discount.

For example, let’s say you’re about to launch a brand-new $97 product. In it, you’ll include an ebook, 2 hours of recorded audio, and three 30-minute videos. Additionally, you’ll include two 1-hour group telesminars.

Now let’s say your hourly rate is a modest $50. From the start, you can tell people that they’re getting 5.5 hours of your time PLUS an ebook. To get equivalent help in consulting, it would cost, at the least, $300, so $97 ain’t so bad.

Or, keeping with the Amazon example, this means your list price is $300, the “price that people pay” is $97, and the “you save” amount is $203. However, the best part is, you created a discounted context instead of actually giving a discount.

Offer A Sales Bonus

If you’re selling stuff online, a common way to create a persuasive context is to offer a bonus. However, if you’re including a bonus, your prospects must consider it significant for it to work. Let me explain.

In the research experiment, there were two feelings that the research participants felt. On one hand, $5 was 4% savings, whereas on the other, $5 was 33% savings. The latter seems more significant than the former, which is why it was more persuasive in testing.

Now, the question is, what’s a significant bonus online?

When dealing with digital products, many marketers often include bonuses that total to more than 100% of the purchase price.

It seems a little crazy, but when you’re working with digital goods, the marginal cost of distribution is zero. Instead, it’s all about how people perceive the bonus. To read more about that, check out my article on the power of perception.

The “Context” Marketing Action-Plan Checklist

Here are the four ways you can use context to sell stuff online:

1. Compare your price to higher priced alternatives because it will help you create the context that you’re offering the best deal.

2. Demonstrate your product’s value. Instead of merely stating the price, go into detail about what people will get and explain how much it’s all worth.

3. Offer a bonus. If you don’t want to discount your price, offer a bonus with a marginal cost of zero. This works exceptionally well… especially when you use perception to build up price expectations.

4. Offer a physical bonus. If you’re selling a digital product, chances are you’re working with a high profit margin. You could use some of that profit to offer a physical good. This helps you sell because people are better at assigning value to things they can touch.

Here’s the section of the blog post where I ask you to leave a comment. Have you used context to sell stuff online? If so, how did you use it? Please feel free to provide links to your work. This is a great opportunity for some self promotion!

Note, this is a rant. I’m sharing this as an example of how companies abuse psychology to sell stuff online.

I stumbled on an interesting sales tactic from the well-known anti-virus store Symantecstore.com. Their brand-new software Norton 360 4.0 (3 user pack) sells for $79.99, but when you press “Add to Cart,” something strange happens…

You are taken to their checkout page, which is handled by Digital River, but wait! There was something else in my cart that I didn’t add. It was Digital River’s “extended download service.”

What is their extended download service? It’s a service that promises to give you the ability to download your software for 1-year after your purchase date for $10.99.

Now think about that for one second…

You can buy the disc at a store for $79.99 and install it for a year for FREE because you have the disc. Yet, here is this company that offers you a “digital disc” for $10.99.

This doesn’t make sense.

Why does a “digital disc” cost $10.99 when a physical disc comes with your purchase for free?

As a consumer, I feel like Digital River and Symantec are passing off their product packaging, distribution, and middle men costs to me.

…But as a marketer, this is a great example of how you can use psychology to persuade people to pay for something that was free. Let me explain.

When you buy software online, if you’re anything like me, one of your first thoughts will be about “how will I get this software back if I lose my computer?”

To top it off, when you’re buying an anti-virus software, you’re already thinking about protecting your data, right?

Well, the extended download service plays off your fears and offers you this service for $10.99.

How ridiculous.

This is a perfect example of abusing psychology to get sales. I mean, if they offered it as an opt-in service, I wouldn’t be nearly as frustrated, but it’s an opt-out service and it’s unreal.

What’s your take? Is this an ethical sales practice? Do you think a company should include an opt-out service in your shopping cart by default?

*Update* It was brought to my attention that this is a Digital River sales tactic. While they sell this service for $10.99, Symantec isn’t free from blame. If you purchase directly from their site, there is something called Norton Download Insurance, which is essentially the same thing for $6.99

ES2BEMTSUBDS

You know the facts. Increasing customer loyalty…

• yields big profits over the long haul

• creates raving fans that promote your products for free

• is cheaper than finding new customers

But the question remains. How can you increase customer loyalty online?

How Artificial Advancement Increases Customer Loyalty

Not long ago, in a major metropolitan area, two consumer researchers named Joseph Nunes and Xavier Drèz conducted a customer loyalty experiment at a local car wash.

On two consecutive Saturdays, they gave out a total of 300 customer loyalty cards. Half of those required 8 purchases to earn a free car wash. The other half required 10, but instead of requiring the full 10, the car wash gave 2 car wash head-start as a free bonus.

This means, in both scenarios, customers still needed to make 8 additional purchases before they could redeem a free car wash. The only difference was varying degrees of completeness. On one hand, customers were 0% complete, and on the other, they were 20% complete.

Now the question is, would this “artificial” progress increase customer loyalty?

During the next 9 months, 28 out of 150 people without a head-start earned a free car wash, but 51 out of 150 people with the head-start earned a free car wash. That’s an increase of 82%!

Artificial progress worked. This is big news for customer loyalty. If you give your customers a head-start on completing a loyalty program, they’re much more likely to continue to use your products and services.

Can Endowed Progress Increase Customer Loyalty Online?

Yes, but before we get into details, how do you define customer loyalty?

If you’re a blogger, customer loyalty is represented by how many people buy more than one of your information products. For example, if someone buys 4 of 4 of your products, I would consider that 100% customer loyalty.

However, if you’re a consultant or designer, customer loyalty is represented by how many people continuously use your services for their needs. For example, if I always use the same designer every time I need a blog design, that’s 100% loyalty.

Now let’s get down to business. How can endowed progress help increase customer loyalty online? Follow these three steps and you should have it working for your business in no time.

Step 1: Create A Goal

To take advantage of endowed progress, you need a goal for people to work towards. It could be a free hour of consulting, free ebook download, or a free ebook design. It doesn’t matter. You just need a valuable carrot at the end of the stick.

Step 2: Decide What Your Customers Must Do

What behavior do you want to reward? You could reward customers for each purchase they make. Or, maybe you could reward them for sending you referrals? Since you saw how you can reward purchases, here’s an example of how you can reward referrals:

Imagine you’re running a membership website. You recently released your affiliate program and you want your members to  promote it. You come up with a contest to increase membership. Every person who refers 10 customers gets a free pass to a conference.

This is your chance to use endowed progress. Instead of asking them to refer 10 people, you can ask them to refer 12 people, but you’ll give them a 2 person head-start because it’s a brand-new promotion.

Step 3: Pitch the Head-Start as a Bonus

You can’t skip this step. Giving people a head-start without telling them why they got it will adversely affect the results. So how can you present it?

Personally, I think the best way is by offering it as a limited-time bonus. I like this route because you can use it when you just launch a new product or service. It will create hype and get people moving now instead of later.

Who Uses Endowed Progress to Increase Customer Loyalty?

Less than everyone. And that’s a problem.

One of my favorite quotes comes from Dan Pink’s Ted Speech. He said, “there’s a mismatch between what science knows and what business does.”

Well, endowed progress is one of those mismatches. Science proved that it increases customer loyalty, yet most businesses fail to use it.

How do you think you could implement endowed progress in your business? Leave a comment. Or, do you know of someone who uses it online? Share that too!

Valeria Maltoni wrote a great article about how you should develop a content strategy for customers who already bought one of your products. To summarize, she recommends that you:

• Confirm they made the right choice
• Tell them what they just bought
• Give them something to share
• Get there early

I’m sharing this with you because this is a crucial phase in the customer life cycle. If you execute it right, you can minimize returns, prevent buyer’s remorse, and increase customer satisfaction.

What else can you do? How can you create a satisfied customer who will continue to buy more stuff from you?

1. Justify the Sale with Social Proof

When most sales are made, chances are that the buyer will have to justify the purchase to another person – a boss, spouse, or anyone that may pass judgment.

To make this go smoothly, you should arm each one of your customers with testimonials from other people and companies. Or, if you have a low return rate, you might emphasize how few people returned it.

You likely recognize this as social proof. The problem is, many people use it in the selling process, but forget about it in the post purchase phase. It works, so don’t make that mistake.

2. Surprise Customers with a Bonus

When people spend money on a product, the last thing you want them to think is “was this worth it?” To combat this, you should surprise each one of your customers with a little bonus. To elaborate, let me share the fascinating experiment that helped waiters – service professionals – increase their tips by 23%.

Picture a restaurant that offers mints on the way out. Do you think customers will leave a bigger tip if the waiter left a mint with the check? How about 2 mints? Or, what if the waiter left 1 mint, walked away, and then out of no where, went back to the table to leave an additional mint?

As you may have guessed, leaving a mint increased the tip size. However, in each scenario, the increase was different. For 1 mint, the tip was 3% higher. For 2 mints, it was 14% higher. And for the third scenario it was an amazing 23% higher. The surprise triggered the largest tip because customers didn’t expect it.

So think about this. If tips are represenative of customer satisfaction, which I believe they are, you should surprise your customers with a free, valuable bonus. They won’t expect it and it will help them answer “was it worth it?” with an enthuasiastic, head-nodding, “yes!”

Ref: Sweetening the Till: The use of Candy to increase tipping by David Strohmetz.

3. Offer Free Product Training and Support

This is a clear, business-winning decision. Nothing decreases customer satisfaction more than being confused with how to make a product work. And free product training and support will be how you alleviate this customer frustration.

For example, the amazing e-learning software provider, Articulate, provides a free blog, for customers and non-customers, that teaches people how to create more effective e-learning training material. I had the chance to interview Artciulate’s CEO Adam Schwartz and he said this blog helped keep customers happy and bring in new business.

Why does this work? For starters, when people spend money on something, they tend to doubt themselves and their ability to make the product work right. With detailed, free training, you’ll alleviate that self-doubt and win a life-long customer.

The Bottom Line

Just because you made the sale, it doesn’t mean the work is over. Your job is to turn one-time buyers into loyal customers. If you follow these strategies, you should be well on your way. What do you think?