3 Consumer Mindsets That Every Developer Needs To Be Aware Of

Pricing tweaks to convert more buyers.

Free-to-play and freemium app design demands an effective conversion funnel to monetize users. Any designer or developer optimizing for higher conversions faces the challenge of convincing their most conservative potential buyers to purchase.

The generally accepted rule of thumb is that typical conversion rates hover under 5%, depending on the type of business and model you’re using. For freemium, it may be closer to 5%, and for free-to-play games it’s likely closer to 1-2%.

Every Single Conversion Counts

Every conversion counts with revenue models that encourage users to try a product or service out for free.

Three important consumer mindsets influence purchases. Each responds differently as they decide whether or not to spend their money. Slight adjustments to things like sales copy, store/checkout design, and pricing can materially improve your conversion rate if they’re conscious of these three mindsets.

This post aims to give you insights into the three buyer-types, and simple adjustments you might make to convert more customers overall.

It can’t hurt to leverage some academic research into social psychology to inform your approach to increasing conversions, right?

The Research: Three Buyer Mindsets

Scott Rick, a professor of marketing at the University of Michigan, has been studying consumer psychology for years at Carnegie Mellon University. He puts volunteers through spending scenarios and asks them about their subjective levels of pain and pleasure. He even conducts fMRIs of their brains while they’re purchasing.

He’s broken down consumer buying psychology into three types of mindsets.

  1. Tightwads – Spends less than they’d ideally like to spend.
  2. Unconflicted – Average buyer.
  3. Spendthrifts – Spends more than they’d ideally like to spend.

They’re distinguished by their relative levels of pain during the buying process. You goal is to reduce the paying pain people have while spending with you.

Focus On Tightwads

Tightwads’ anticipatory pain of paying causes them to spend less, which means you’re best served by minimizing that perceived pain. Work done to improve Tightwad conversions should lead to less friction with all buyers, so we focus on them to get the most bang for our buck.

A few simple techniques can go a long way reducing a Tightwad’s perceived purchasing pains which will make it easier for them to spend with you.

1. Frame the value of your virtual goods thoughtfully.

Time and money are two crucial elements of assessing the value of a purchase. Conservative spenders are especially prone to hesitating if they’re not clear on the value of a purchase, so you want to make your pricing as clear and exciting as possible.

Example: You run a dating app in which $50 will buy a user 500 credits. If 5 credits buys me the ability to message a user, show me that this purchase costs only $.50/message.

It can also be useful to frame your value in terms of the lifetime value of your goods.

Example: Your game includes a $4.99 in-app purchase to upgrade my armor. As far as in-app purchases go, plenty of users will consider that expensive. They may rethink their hesitation when they find out it is a permanent upgrade. Or that their new armor can extend their average gameplay session by 200%.

2. Present buyers with bundled options.

All types of consumers universally prefer buying things in bundles as compared to purchasing smaller accessory components separately. This is especially true for Tightwads, who want to minimize the purchasing pain they experience on each transaction.

Reduce the overall number of purchases that a user is faced with. Reduce the number of decisions a person has to make before they buy.

Example: Car dealers package various upgrades into one premium package, removing the need for consumers to justify upgrade decisions on seat leather, sunroofs, navigations etc.

If a user can get value out of more than one purchase over the course of their experience with your app, you should consider packaging those purchase options into one bigger bundle.

Let your Tightwad users get everything out of the way with one transaction.

3. The little details really matter.

The words you use matter. In the CMU study mentioned above, changing just one word showed a significant affect on Thriftwads’ willingness to spend.

They asked groups if they’d be willing to pay for overnight delivery with:

  • “a $5 fee” or
  • “a small $5 fee”

They found that while “Spendthrifts are nearly five times more likely than Tightwads to pay the $5 fee, [they’re] almost equally likely to pay the “small” $5 fee”.

Are there design tweaks you can make to nudge buyers in the right direction?

Example: Do you offer add-ons or bundles for “$5 more”? How about saying “just $5 more” or “a little bit more” in your sales copy?

You can bump up your revenue by paying attention to word choice, nuance, and subtle design suggestions that influence conservative buyers.

What tactics do you use?

Do you plan for conservative buyers when you design your apps or virtual stores? What details do you pay the most attention to?

 

 

Image from tambako on Flickr. Special thanks to Lauren for her help drafting this.

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