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What payment options do you give customers? Credit card? Debit card? Maybe you’re on the cutting edge and allow Bitcoin?
Regardless of the final payment methods for a product, you are asking your customers to pay in other ways as well, a way that is all too easily overlooked by brands to the detriment of their conversion rates — mental costs.
“I have to do this much”
A mental cost is essentially your customer thinking, “I have to do this much.” It could be to purchase a product. But it could be for another conversion goal, like simply reading your content marketing.
This is above and beyond the material cost — the actual price, maintenance charges or other monetary expenses.
If you don’t understand them well, mental costs can be detrimental to conversion because they add to the cost of the decision beyond just the price of a product. And when the cost side is too heavy in the exchange sum (i.e., how the customer weighs whether an action is worth taking), you will lose customers. The image above is from the book The Marketer as Philosopher, and it illustrates the customer’s choice process. (Click here to see a larger image)
“Mental costs represent the ‘soft’ elements, especially friction and anxiety. The marketer must remember cost is not just a mathematical calculation; it is especially a psychological calculation. A low material cost does not necessarily mean a low mental cost.”
— Flint McGlaughlin, CEO and Managing Director, MECLABS Institute
Friction — psychological resistance
These mental costs exist for paid products, but they also exist for conversion actions that don’t require any payment.
For example, I was doing my taxes recently, and usually I get the income statement forms in the mail. Well, for one account I have, I didn’t get the form in the mail. I simply got an email telling me I had to log-in to the online account to download the form.
This process involved far more friction than simply opening my mailbox. It made me re-consider further investing money with this company. I literally thought, “I have to do this much just to get my tax forms?”
And note, this didn’t involve any elements of the actual material cost or value like fees on the account or the return I’m getting for my investment.
Other examples of friction include:
- Making a customer log into an account before purchasing
- Text that is too small or reversed out of a dark background
- Popups that are difficult to exit out of (if you have a pop-over, allow visitors to easily exit with a clear “x” close button in the upper right or by simply clicking on the background)
Reduce friction. Ask yourself, what elements of the conversion process are a pain in the butt for customers? What hoops do you make them jump through? And how can you ease the process for them?
Anxiety – psychological concern
While friction is the level of effort required on the customer’s part, anxiety is the level of concern.
To use the previous example, not only was their friction from finding the proper form, there was anxiety as well. The first account I went into didn’t have the tax form. The email I received only said the form was ready, but I had multiple accounts with the financial institution and didn’t realize it was in another account.
This caused anxiety — first, because I couldn’t find the form. But then after I successfully found and printed the tax form, what if there were other forms I was missing? Again, this causes more anxiety than simply receiving the tax form in the postal mail.
This is true for many online-only processes and communication mechanisms – from email to online billing to online accounts of all sorts. There will naturally be more friction and anxiety so it’s necessary to ensure intuitive usability as well as trusting-building measures like easy and convenient customer service through chat, phone, email, social media, however your customers prefer to communicate.
If not, the cost of doing business with your institution – the mental cost that is – may cause you to lose customers.
Other examples of anxiety include:
- Not clearly communicating shipping costs
- Being unclear about when a customer will receive a product
- An email or landing page with typos, poor grammar, or one that clearly isn’t written by a native speaker of that language
- Asking for sensitive information (Social Security number, income, etc.) without communicating why you need it and how it will be used
You can find the right balance between mental and material costs
A product with a strong value force can command high mental and material costs from customers. Tesla attained 518,000 preorders for the Model 3 electric car before it was even built. Not only were customers willing to pay a high material cost (no haggling or discounts on these cars) they paid a high mental cost — the friction of waiting to receive the car and the anxiety of buying a car sight unseen.
On the flip side, have you ever received a free ticket to a concert or event that you chose not to attend? In that case, the material cost was zero. However, the perceived value was so low you were unwilling to pay the mental cost of attending.
Most products or other conversion goals are between the two extremes of this spectrum. And while you want to increase the perceived value above the perceived cost to increase your conversion rate, keep in mind that you can also try to find the right balance between mental and material costs on the cost side.
For example, you might discover that some customers are willing to pay the mental cost of tracking down a coupon or promo code in order to save on material costs. Some customers are willing to pay the mental costs of picking up a product in-store to save the material costs of shipping. However, other customers prefer paying a higher material cost in order to minimize mental costs.
By testing offers and getting to know your customer personas better, you can find the right mix of mental and material costs for your customer segments.
Learn more about mental cost in MECLABS Value Proposition Development online certification course.
Recuerda que en VisualMarketing, agencia de diseño y marketing digital, tenemos estos consejos, y otros más, en cuenta para brindarte el mejor diseño y estrategia de marketing con base en tu necesidad. Estamos mercado desde 2011 y desde antes en el mundo del diseño y contamos con la vasta experiencia de nuestros profesionales que harán que tu logo transmita los valores de tu marca. ¡Contáctanos!