Review: Maximize Customer Retention through Building Trust, Habits & Loyalty

We have learned about all the attention-grabbing, retaining principles in the previous articles. But how can we build trust, habit, and customer loyalty? How can we retain our customers and let them realize they must buy from us? How can we increase their loyalty, and build our products as a habit-forming product in customer’s minds?

This week I have learned from these two courses: Building Trust, and Building Habits & Loyalty from CXL Institute, which is a part of the mini degree program Digital Psychology and Persuasion. These two courses helped me to understand how to build trust as a brand among customers, and how to build the habit & loyalty among people.

Building Trust

Why do we need trust in our site? What to do and what to avoid in order to maintain trust between us and our customers? Let’s explore those.

Pyramid of Trust

What we do wrong almost all the time is we ask for our visitor’s personal information before building the trust. Our visitors ask themselves why we should trust this site. Trust is hard-earned, and if we can’t build trust, even if we have multiple visitors at our site, we will lose the majority of them.

The pyramid of trust is based on Maslow’s hierarchy of needs. The first time visitors come to our site, there is no trust established yet. After they scroll and look at our site, they find the answer to the question: is this site credible or dependable? Then, they check if our site is better than others for similar kinds of products/services. After then, they think if they can trust us with their email address or other personal information. At the higher level of trust, they find the answer to the question of whether they should trust us with their financial & sensitive information. And, at the top of the pyramid - the highest level of trust, they try to make it clear that this site is trustable enough for building an ongoing relationship, and for the recurring charges.

The first step that we should do for building trust is slowing down a little bit, we shouldn’t ask their email address immediately when they visit the site. We need to match our ask to the trust level. We need to show the Authority, Social Proof, and similar things to build credibility at first. We can’t say they need to trust us before we trust them. We can allow guest checkout, let them see what information they are going to receive, which kind of product/service they are going to be offered. The most important thing is, high trust comes from experience. If they are familiar with us, they will not need the trust factors the next time they try to buy from us. 

BJ Fogg’s Credibility Factors

10 factors are important for creating credibility of the site among the visitors:

1. Appropriate Design (according to the expectation of visitors)
2. Easy Verification (visitors need to be able to easily verify the claims through links)
3. Show you are Real (we can do it by using the founder's story, street address, behind the scene, etc.)
4. Prove Expertise (showing certifications, degrees, star ratings, staff expertise)
5. Real (Trustworthy) Humans (Background of founders & employees, their hobbies, etc.)
6. Easy to Contact (Providing phone, email, web form, social media, live chat feature, etc.)
7. Easy to Use (we need to make our website easy to use - reducing cognitive load)
8. Update Often (we need to provide fresh information often - SEO bonus)
9. Limit Promotion/Ads (Ads are trust reducers)
10. Avoid All Errors (coding error, spelling mistake, technical errors should be avoided)

Reviews

Reviews are an extremely important factor for trusting a website. Adding reviews more and more lift the conversion rate. But it's a total mistake to clear up bad reviews as people start doubting when there are all good reviews. When we find the bad reviews, we can honestly address the issue and show people that we are responding to. So, we need to include honest & plentiful reviews to increase the trust factor by showing our reviews are not fake.

Domain Trust

Domain names are a significant trust factor. By flipping a more trusted familiar domain name with the less trusted familiar domain name flips result people click on the information that they should trust. People trust domain names that are familiar or branded, simple or short, and domain names with .com extensions. Also, the trust factor of the domain name varies in different regions. In Australia, .com.au is more trusted than simply .com. UK people trust domain names with the extension .com.au more. In Russia, people trust domain names with Cyrillic characters more. The reason behind trusting domain names is that domain is a proxy for authority. 

Videos, Photos, Animations, Phrases

Another way of building trust in the website is by using videos, photos, animations, and phrases. Surely texts are great, and including some photos with it is also fine. But we can show people some videos demonstrating the features, how to use the product. Putting it in action will show more credibility to our products than that of competitors. And, incorporating humans in our video or animations also works great. Roger mentioned an advertising company used only a ten-word phrase in their copy, which increased the perception of fair price, caring, fair treatment, quality, and competency to a significant amount. Those ten words are: “You can trust us to do the job for you”. These words may be simple, but simply stating that we can be trusted is (usually) an effective way to increase trust.

Ultimatum Game

Socializing form increases trust. To increase our sales and negotiation success, we need to socialize first with what we are doing in social media, what we are doing in person. Getting to know each other with customers really helps, and increases the trust factor even if it is for the shortest time of ten minutes.

Improving Our Photographs

Trust can be increased through photos, whether it is social media photos (e.g. Facebook Photo, LinkedIn Photo), website photo, testimonial photo. And, research shows that we can improve our photos.

If we evaluate photos taken from which side, we can see that our left side is usually more attractive than our actual right side. The reason behind this is the Left side is governed by the right side of the brain and it tends to be a little bit emotional resulting in more attractiveness. But for men, the right side of the face is more dominant and powerful. If that’s what we look for, we might go for the right side.

Also, the eyes are really important. One research shows that larger pupils make us more attractive and trustworthy. But during photography, bright lights make our pupils smaller. In that case, we need to minimize the brightness of the light. Another research found a thicker limbal ring around the pupil makes us look more attractive and youthful. So, we can retouch our photos by adding a thicker limbal ring in our photos.

Smile is also a crucial factor. Smiles show high dominance and high affiliation, looking more friendly. Whereas an angry face shows high dominance, but low affiliation. Also, during trust-building more trustworthy expressions are found with very slight smiles & slightly upturned eyebrows. Just a little bit too much eyebrow shows surprise faces. An angry expression with a more frowny mouth and eyebrows went down shows the least trustworthiness. So, ultimately a smaller smile shows intelligence & trustworthiness, whereas a bigger smile is better for dominance & friendliness. Smiles work differently for men & women too. For women the most attractive emotion is happiness, and for men the least attractive emotion is happiness. Another case is that direct gaze is most attractive. So, we need to look at the camera.

A bizarre effect is that one drink of alcohol makes a person look more attractive. There's’ a sort of sweet spot, where it shows one drink of alcohol makes one more attractive, but too many drinks make them less attractive than usual. Just that little bit of alcohol may cause light facial flushing, might cause a little bit more emotional expression, and that seems like a sweet spot. But in the case of alcohol, we need to be aware of the imbibing area effect. It says visible alcohol drops IQ. Generally, people associate alcohol with cognitive impairment. So, if we want to look like a fun-loving person on our Facebook page, we can pose the glass of wine, but if we want to look like a business intelligence on our LinkedIn profile, we need to crop the glass or choose a different photo.

Trust Symbols

Trust symbols are logically another way to build trust. These symbols give people an increased trust that they can browse our site, give us their credit card number, or other information without it being hacked or stolen or other things. It helps people discriminate between different companies. It is better to use more recognized trust symbols if we have available. Trust symbols hit the brain both consciously and nonconsciously and show the authority of the site. If they know the third party and know what they are doing, and see the trust symbol in our site people think if the third party can trust this site, we can trust it too.

A few examples of trust symbols are shown here:

Research: Trust Seals (Part One) – Security Vs. Familiarity

1. Familiar brands like Visa-Mastercard, PayPal, Norton, and Google were also the most trusted when paying online.
2. The ‘Google Trusted Store’ seal was trusted more by millennials compared to older participants. Sitelock did well with middle-age participants compared to millennials, and PayPal was trusted by older (50+) participants relative to millennials.

Trust Seals (Part Two) – Online Security Perceptions & Trust Seals

From the study, CXL institute found these following takeaways:

• When shopping online, a PayPal trust seal added significantly more security than any other brand.
• Females were significantly more likely than males to feel a Norton, BBB, or Shopify trust seal made them feel more secure when shopping online.
• Gen Y (aged under 30) were significantly more likely than Baby Boomers (aged 50+) to feel a Google, Norton, TRUSTe, or Trusted Shops trust seal made them feel more secure when shopping online.
• Females were significantly more likely than males to have security concerns when shopping online.

Security on Checkout (Part 1) – Visual Perception and Recall of Trust Seals

From the study, the following results were found:

• The majority of respondents reported having security concerns when making online purchases.
• All trust badges were pretty noticeable by the viewers.
• Well-known logos and brands are remembered more often than their lesser-known counterparts.

Building Habits and Loyalty

Even if we can grab the attention of our customers & build trust between them and us, if we can’t make them stay at our website, there’s no point in all these efforts at all! Thus, we need to learn the persuasion principles that can help us maximize our user retention. Let’s explore those persuasion tactics.

Goal Gradient & Endowed Progress Effect

Loyalty is the thing that everybody wants for their customers, but not everybody gets it. Forming habits are crucial to building loyal customers. True loyalty comes from experience & emotion rather than having people locked in and wishing to get out. Rewards programs are not equal to loyalty. Rewards programs are best used as a carrot as an incentive to bring people into our environment and then giving them great customer experience. Over time that combination of rewards & great customer experience can build true loyalty, and that’s what we should be striving for.

And also, rewards reinforce the behavior. There are two kinds of rewards:

1. Fixed Rewards
2. Variable Rewards

The key to determine whether a fixed reward works, according to Dr. Xavier Drèze,

“The reward needs to come often enough so that there is reinforcement. At the same time, it can’t be too close. Then it wouldn't be meaningful."

One more thing is that reward redemption increases reward-seeking behavior. Variable rewards on the other hand come in the form of surprise & delight. They can be random & can also be effective. 

Goal Gradient Effect works like the closer we are close to our goal, the faster we work to achieve it. Whereas Endowed Progress Effect shows already pre-filled spaces so that it makes us think we are already making progress. 

Three Ways to Ramp Up Motivation in Rewards Programs

The more visually we can show the progress people are making the better it is. People get motivated by seeing how far they have made up to the point. We can send emails saying how much they are left to attain the goal. 3 Ways to ramp up motivation in our rewards programs are:

1. Exploit Goal Gradient (Establish Goals, Show Progress)
2. Increase Motivation (Start with ‘free’ progress credit)
3. Be fair with rules (Don’t demote, or make people lose their progress due to inactivity)

Rewards & Loyalty Integration can be done after providing rewards, we can ask people to give feedback to us. Out of loyalty, they will surely do so. Goal Gradient for Multi-screen forms can be implemented by including a progress bar at the top. And, we can show the progress bar after feeling out the first screen, cause it will start with partial completion by then. We need to be generous with progress estimates too!

Counterfactual Reflection & Slip-ups

Roger advised building loyalty like George Bailey from the movie It’s a Wonderful Life. This effect is the reflection of what it could have been if he hadn’t been there. We need to make our customers imagine what would happen if they wouldn’t have our products. If we can show people the counterfactual reflection, it will in fact increase loyalty among our customers. We can use this effect by showing what alternatives they would have, what outcomes will occur if we hadn’t been there for them. Also, we can’t impart the negative impact of ours in this case. 

Another effect comes from the slip-up effect, where it shows when loyal customers get angry, we need to accept our mistake and say sorry to them. Bad behavior can even evoke revenge on the customer's part. When we screw up as a business, we need to acknowledge it well. Apologies do really work, and we need to apologize when it’s needed.

Nir Eyal’s Hooked Model: A Quick Overview

At certain points, products can become habits, whether it is websites, apps, or physical products. Roger talked about how products become habits based on the book Hook written by Nir Eyal. The hook model circles around the 4 step process: Trigger, Action, Reward, and Investment. It’s very similar to Roger Dooley’s persuasion slide. Here nudge from the persuasion slide shows as a trigger, and the action is getting the customer at the bottom of the slide and doing what we want them to do. But the only difference is, in the hook model Nir Eyal shows how we can keep doing the same trigger, and action over and over by forming a habit. 

The first step to build a habit is the trigger. At an early stage, this trigger comes from external sources such as email, notification, ad, tweet, etc. And, the trigger tells people what they need to do. Our goal, in the long run, is to internalize the trigger so that rather than inquiring that notification or ping on their inbox, it arises from the emotion. When they feel bored, saddened, hungry, they will know what to do. To get the internal trigger, we need external triggers too. 

After the trigger successfully makes us take the action, we open the app, go to the website, post there, like some posts, send messages, or do other actions. And, for taking the action our customers will get their rewards. People may like their posts, comment on them, or even retweet those. The other type of reward is information rewards. It’s more like a variable reward. After visitors get rewards, they will be invested in our products/services. They will feel the value of the product/service. And this process loads the next trigger, making our customers go through the circle again and again. So, the ideal point is the more we use a product, the more value it has to us. 

Closing Sales & Closing Thoughts

The best time to close a sale will be according to the cognitive resources available. The more limited our cognitive resources are, the more likely we are to make an easy decision rather than a difficult decision. If we want to persuade someone with something significant, bringing a new change like new software, training, or other things, we need to do it when cognitive resources are at the highest level. And, if we are offering to continue the status quo in the current situation, we need cognitive resources at the lowest level. 

David Ogilvy said,

“The most important word in the vocabulary of advertising is Test.”

So, we need to test which method works best for us.

Zig Ziglar said,

“The most important persuasion tool you have in your entire arsenal is integrity.”

Which means if we are getting our customers to a better place for them in an honest way rather than in a deceptive way, and if they won’t regret the decision we are helping to make right after they make or in a day or two, then we are actually doing good work. On the other hand, if we are doing things that are unethical, or deceptive, then it is obviously wrong.

At last Roger Dooley ended by pointing out that change is constant and accelerating. Everything is changing on a time basis, but the one thing that didn’t change in 50,000 years is the human brain. And so, we need to be more persuasive by working with our customer’s brains and how it actually works.

Hooked Lecture – How to Build Habit-Forming Products

What patterns underlie some of the successful products to make a success? It’s the habit-forming pattern. People become habituated with those products, and they end up using those more and more. Habit is basically when behavior is done with little or no conscious thought. The fundamental pattern that works as the backbone of the top companies is called the hook. The hook is an experience designed to connect the user’s problem to our solution with enough frequency to form a habit. And it works as a successive cycle through the 4 steps of the hook: Trigger, Action, Reward, and Investment. 

Trigger lets us think about what we need to do next. It gives us some information for what the action should be. Click here, buy now, Try our new app, all are the form of External Trigger. We marketers give our attention towards the external trigger, but we don’t pay attention to the internal trigger, which is absolutely critical for forming the habits. Internal triggers are things that tell us what to do next, but the information for what to do is not stored in the trigger instead the information comes from a memory or an association inside the user’s brain. The internal trigger comes from the emotion, and the emotion is negative. When we feel bored, lost, fatigue, disgust prompts us to take action in finding solutions to our problems. It found that people who are depressed check email more often. When we feel lonely we use Facebook, when we feel unsure we use Google, when we feel bored we check YouTube. Before we actually realize what we are doing, it seems we are already using these products/services. And so, we need to find our customer’s internal trigger. 

The Action phase is the simplest behavior done in anticipation of a reward. Scroll, Search, Play are all forms of the action taken place. According to BJ Fogg’s formula, for any behavior to occur, we need 3 things: Motivation, Ability, and a Trigger. Motivation is the energy for action, how much we want to do for certain behavior.

According to BJ Fogg, there are 6 factors that can increase motivation:

• Seeking Pleasure
• Avoiding Pain
• Seeking Hope
• Avoiding Fear
• Seeking Acceptance
• Avoiding Rejection

Whereas ability is the capacity to do a certain behavior. There are 6 factors, which can increase or decrease the ability.

• Time
• Money
• Physical Effort
• Brian Cycles
• Social Deviance
• Non-routine

So, basically, the thing is the more we do something, the easier it becomes, the more likely we do it in the future. The level of motivation and ability determines if action will occur with the trigger. 

The Reward phase denotes the itch that scratch when people get what they came for. It all starts with the nucleus accumbens that activates when we crave something. It activates an itch in the brain that stimulates stress/desire. And, our reward system activates with anticipation. That’s the itch we seek to scratch. We can do it by using a variable reward system. Because the unknown is fascinating. Variability causes us to focus and engage. Thus, nucleus accumbens is stimulated by variability.

There are 3 types of variable rewards: Rewards of Tribe, Rewards of Hunt, and Rewards of Self. Habit-forming tech uses one or more of these variable rewards. People search for social tribes by empathetic joy, partnership & competition. We like social rewards. People search for resources (e.g. Food, Material Rewards, Valuable Information, etc.) to find the rewards of hunt. Rewards of self occur by searching for self-achievement. People search for mastery, competency, consistency, control, and want to become the achiever. The important point here to note is variable rewards are not a free pass, our product still must address the itch. If the internal trigger is boredom, the variable reward must have to be something entertaining. We need to build variable rewards that scratch the users itch, but leave them wanting more. It leaves them with the mystery of what we will find next.

The last step is the Investment phase, where users invest something for future benefits. It can be money, emotional commitment, personal data, social capital, time, and effort. Investment increases the likelihood of the next pass through the hook in two ways. 

1. Investments load the next trigger of the hook
2. Investments store value (Content, Data, Followers, Reputation), improving the product with the use

So, the bottom line is it’s not the best product that wins the customer’s mind. It’s the product that can create a monopoly in the mind that captures the market. And, by passing through the 4 steps of the hook helps shape user preferences, and attitudes. Most important thing is, we need to ask five fundamental questions we need to ask ourselves to win the customer’s mind:

1. What internal trigger is product addressing? - Trigger
2. What external trigger gets the user to the product? - Trigger
3. What is the simplest behavior in anticipation of reward? - Action
4. Is the reward fulfilling, yet leaves the user wanting more? - Reward
5. What ‘bit of work’ is done to increase the likelihood of returning? - Investment

The morality of manipulation is that designing habit-forming products is a form of manipulation. And, we need to be careful at this point. What responsibility do we have when changing the user behavior to use the capacity of people for good? The world is full of problems to fix, and it’s our responsibility to help others find meaning, engage them in something important. And so, we need to build healthy habits.

Personal Insight

These two courses: Building Trust and Building Habits & Loyalty helped shape my thinking on how to engage the customers and how to retain them. All of our marketing efforts will go in vain if we can’t get our customers to stay at our website, and make them think we are trusted. So, we need to build trust and make them believe that they can trust us by leaving all the rooms for doubt. And then, we need to make our products/service a habit for them to check every little while, and increase their loyalty.