Making sense of irrationality

When buying something online, how much do you care about how the buttons are laid out? More than you might think.

With content changes on
our websites, we typically use what’s called "A/B testing" to see how
those changes perform. Some site visitors ("group A") see one version
of a page; the rest ("group B") see a slightly different version. By
watching the analytics for the two groups, we can see which design
"wins" — that is, which presentation is clearer, more understandable,
more compelling, and so on.

One day last year, we were
experimenting with small improvements to the shopping cart on our Palo
Alto Software store. On the page that collects the buyer’s address
information, we tried moving the Continue button from the right side of
the screen to the left. We made the change and started the test — and
conversions from the address page immediately dropped 40%.

Forty
percent! Really? All we did was change the alignment on a button. The
product they were buying was the same. Nothing changed in the value
proposition of our software. The button was still visible and similarly
easy to find. No warning bells should have gone off. But for a huge
chunk of our audience, the left alignment of that button was a
dealbreaker.

This sort of consumer
behavior is surprisingly commonplace. E-commerce sites like
MarketingSherpa are replete with examples, like this case study where an office supply retailer changed the size and color of their buy buttons and lifted conversions by 44%.

Making sense of seemingly irrational behavior is the focus of the emerging field of behavioral economics. It’s been in the news quite a bit this week with coverage of Predictably Irrational: The Hidden Forces That Shape Our Decisions, a book by MIT professor Dan Ariely that identifies specific types of irrational decisions that people tend to make, and why. For an overview, see the book’s website, or check out Elizabeth Kolbert’s excellent review of the book in the New Yorker.

Josh Cochrane
Director of Online Marketing
Palo Alto Software

Posted on Sunday, February 24th, 2008 at 12:33 pm within Market Research. You can leave a response, or trackback from your own site.