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What is conversion bias, how it affects your business, and steps you can take to overcome it

Are you noticing a low conversion rate, high cart abandonment rate, and low time on site? Are you unable to close the mobile revenue gap? This can all be caused by conversion bias, also known as Conversion Bias Disorder, a form of decision-making bias that can have a significant impact on your business's bottom line. 

Rachel Melegrito takes a look at what conversion bias is, how it affects your business, and the steps you can take to overcome it. From email capture pop-ups to incentive discounting and excessive A/B testing, there are a number of strategies you can employ to prevent conversion bias symptoms from taking hold.

Last updated

29 May 2023

Reading time

8 min

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What is conversion bias?

Have you ever had a gut feeling that leads you to make a purchase or take some other action that you know is not in your best interest? That's called conversion bias, and it's something that businesses struggle with all the time. 

According to Michael Nemeroff, CEO & Co-Founder of Rush Order Tees, “Conversion bias is the tendency for people to behave in ways that favor their existing beliefs or attitudes over facts or logic. In business, this can lead to decisions being made based on assumptions rather than actual results.”

Conversion bias can affect any aspect of your business, from marketing campaigns to product design. However, as the name suggests, it particularly affects conversions—the process of converting website visitors into customers. This is because conversion bias often leads people to make decisions based on irrational thoughts or feelings instead of objective data.

Fortunately, there are ways to overcome conversion bias and increase your chances of success with your business goals. By understanding what conversion bias is and how it affects your business, you can begin designing more effective campaigns and products and take steps to reduce psychological factors that contribute to conversion bias.

Then, by tracking and analyzing results, you can optimize your efforts to maximize conversions. Here are some tips for managing and overcoming conversion bias in your business:

1. Understand what conversion bias is and how it affects your business 

Conversion bias occurs when people make decisions based on their existing beliefs or attitudes instead of objective data. By understanding this phenomenon firsthand, you can start making better decisions about how best to serve your customers. 

For example, if you're selling products online, understand what factors influence buyers' decision-making processes (e.g. perceived risk vs reward). This will help you design campaigns that are more likely to convert visitors into customers.

2. Use psychological factors in conversion bias

There are many psychological factors at play when it comes to conversion bias: 

  • Cognitive biases (eagerness discounting)

  • Emotional biases (loss aversion)

  • Social norms (eccentricities such as herd behavior)

  • Self-fulfilling prophecies (beliefs become a reality due to confirmation)

3. Test and optimize strategies for reducing conversion bias

Once you've identified which psychological factors play a role in converting website visitors into customers, it's important to test different strategies designed to reduce those forces (such as user testing).

🔍 Look for these signs of conversion bias

  • Fewer conversions: qualified leads aren't converting

  • Irregular cart abandonment rate: customers aren't completing purchases

  • High bounce rates: would-be customers are leaving your site without taking action

  • Low mobile revenue: mobile users appear to not be engaged

How conversion bias affects your business

Have you ever been in a situation where you've made a purchase only to have second thoughts later on? Maybe you bought something that you didn't really need, or maybe you decided not to buy something because of the way it was advertised. 

These are all examples of conversion bias. Conversion bias is when consumers make decisions based on how a product or service sounds rather than what it actually is.

As a business owner, this can have serious consequences for your bottom line. For example, if you're selling products that are based on appearances rather than reality, people are more likely to end up disappointed and frustrated with their purchase. 

Conversion bias can have negative impacts on businesses in other ways: for example, if you are an online retailer and you offer free shipping on all orders above $50, customers are more likely to buy items that cost above $50 since they don't have to pay for shipping. 

However, if you are an online retailer and you offer free shipping on all orders below $50, customers are less likely to buy items since they will end up paying for shipping regardless of the price of the item. This is because conversion bias causes businesses to favor their own products or services over those of their competitors.

How conversion bias affects consumers

Conversion bias can have a major impact on how consumers make decisions. For example, if you're a consumer goods company and you create a new product that is better than your current product, customers are more likely to choose your new product over your current one. 

However, if you're a consumer goods company and you create a new product that is worse than or basically the same as your current product, customers are more likely to stick to the product they already know. This is because customers are biased toward choosing options that are familiar to them.

What strategies businesses can use to minimize the effects of conversion bias 

There are many strategies that businesses can use in order to minimize the effects of conversion bias. A few examples include:

  • Conducting A/B testing experiments: testing different versions of marketing campaigns allows businesses to see which campaigns work best for their target customers

  • Using personalization options in marketing campaigns: this allows companies to target ads and content specific to individual customers  

  • Measuring the customer journey across devices and channels: this helps companies understand how users interact with their websites or apps across different devices (e.g. smartphones vs laptops) 

  • Analyzing user engagement trends: this allows companies to see which channels (e.g. email vs social media) are working best for attracting and retaining customers

  • Implementing optimization strategies: optimizing your website and marketing campaigns helps businesses identify areas where they can improve their conversion rates

How to monitor for symptoms of conversion bias in your employees

There's no question that making sales is important for any business. However, if your sales efforts are based on something other than merit—such as pressure from management or customer bias—then you're likely experiencing conversion bias. 

This bias is the result of our natural tendency to favor beliefs and behaviors that we've experienced before. In other words, we tend to do better when we're in situations where we're familiar with what's happening.

Conversion bias can have serious consequences for your business. Not only do you risk losing customers who are truly interested in your product or service, but you also jeopardize the quality of your sales team. If you don't take steps to prevent it, conversion bias can lead to biased decision-making, lower morale among employees, and even discord within the team.

Fortunately, there are steps that you can take to monitor for signs of conversion bias and reduce its risk in your employees. By working with an experienced conversion expert, you can ensure that all of your employees are equipped with the skills necessary to avoid bias in their interactions with customers. 

In addition, building a culture of self-awareness and prevention within your organization will help keep conversion bias at bay. Finally, by implementing best practices into your company's culture and communication policies, you can foster a more inclusive environment where everyone feels comfortable exploring new ideas and expressing their opinions freely.

Tips for evaluating the impact of changes on your conversions

The success of your business relies heavily on converting visitors into paying customers. However, many businesses make the mistake of relying on a single method of conversion—such as advertising—without evaluating the impact of changes on their conversions. This can lead to an unhealthy reliance on one type of marketing and can ultimately result in poor conversion rates.

Conversion bias is a term that refers to the tendency for people to view events or experiences in a biased way.

According to Shawn Plummer, CEO of The Annuity Expert, “This can have a negative impact on conversions, as customers tend to make decisions based on their own biases rather than objective data.” 

Changes in business can also have a big impact on conversion rates if you're currently selling online but are considering expanding into brick-and-mortar stores. 

For example, conversion bias could lead you to believe that your conversions will drop when in fact they may actually increase due to different customer acquisition methods (such as banner ads in physical locations). The impact of consumer psychology—or how your customer perceives your brand—can also have a big influence on their decision to purchase.

To avoid conversion bias and improve your business's overall conversion rate, it's important to track and analyze all types of data related to customer behavior. This includes things like click-through rates (CTRs) and refund/cancellation rates over time. 

You should also test different marketing tactics and then measure the effects for improved decision-making down the road. Finally, always remember that it is important to provide a stellar customer experience if you want them to convert.

Understanding conversion bias and how to mitigate its impact

When it comes to conversions, businesses can be forgiven for having conversion bias. This is the tendency for businesses to focus on the wrong metrics and ignore other important factors when measuring their success. This can lead to erroneous assumptions being made about how well a business is performing and what needs to be done to improve it.

“There are several easy steps that you can take in order to mitigate the impact of conversion bias and help increase customer engagement,” says Catherine Schwartz, Finance Editor at Crediful. “By identifying potential biases early on, you can begin to correct them before they have an impact on your conversions.”

Additionally, data analysis techniques can be used to detect whether or not there is any evidence of conversion bias in your data set. If there is evidence of conversion bias present, then effective strategies need to be put into place to prevent it from having any further negative impacts on your business. 

Finally, best practices for avoiding and mitigating conversion bias in the future should also be implemented so you don't experience any setbacks down the road.

Conclusion

Conversion bias is a phenomenon that affects how consumers make decisions, which can have a negative impact on businesses if it leads to customers making irrational choices or favoring their own products over those of their competitors. Fortunately, there are ways to reduce the effects of conversion bias.

Use Hotjar on your site to see what's really happening, identify problems, and increase conversions.