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Human psychology and e-commerce.

Posted by Nam Nguyen | Filed under

So, you are looking at your computer screen, scanning for new ideas for a brand new e-commerce store that hopefully will bring in the big bucks. You probably have realized by now that the more research you did, the huger the world seemed to appear! The intelligent entreprenuer will explore the different approaches that (s)he can take towards developing the business. A sound e-business plan requires the same things (and even more) that a traditional business plan needs: Funding, Marketing, Administration, Resources, Values and Philosophy etc. Hmmm missing something?

I won't bore you with the textbook topics on how to run an e-business, you probably already had been exposed to many ideas and concepts in the academic or even practical world. One thing that has usually been overlooked by my classmates back in college days and my collegues nowadays is the human factor. We usually come up with business plans that revolve around numbers, charts and structures, but we usually over look the human emotions that are involved in both our operation as well as the perspective buyers. Let me challange you with some provocative questions:

1. Why are web sites usually organized with a common layout? The basic banner on top, navigation bar going across, column bar going vertically on the left side... that is pretty standard and I bet you it will be that way for a long time. Who set these standards and why?

2. How well do you really know about your potential customers, their personalities, buying habits? In my years of experience in sales, rarely had I seen any of my clients asking me questions about what they can do to capitalize on human's behaviors and motives.

3. As an "e-commercer", how much do you want to be involved in the many levels of developing your website for your business? How "hands-on" do you want to be in technical aspects such as design and coding? How much is counter-productive? What kind of relationship do you want to build with developers like us? 

Obviously we all have different answers to these things in life, as we are so unique with our different experiences, abilities and worldviews. But here are some hints.

We live in a world of structures, of organization (most of us anyway) -- and over time, the majority of us develop standards for many things. The way a typical website is designed also reflects the habits of ours. You will be surprised to find out how much our eyes work to scan for relavant information! You would think that we just have swift glancing motions to filter out the stuff we need. This episode of Scientific American Frontiers will show you the application of technology to understanding how our eyes work to search for information -- and it is Krrrazy! I never knew that my eyes could do such complex zig-zag movements without being tired (well, for a short period of time anyway).

Well... How does this apply to you? Well, maybe this change in perspective will encourage you to do some extra work to place your products, ads, information and other elements on your website in a scientific and efficient way. A smart entreprenuer would probably try to do trials-and-errors, survey or personal experiments that can help them understand a little bit more about how their customers will see their site and how they filter out information that is relevant to them. Remember that most people will only spend mere seconds on an e-commerce site that they just land on, and that the first impression is the most important one. So don't lose valuable customers because of bad design.

The second question opens an enormous discussion about human psychology and buying habits. Obviously you cannot get all the information you need from this blog, but I hope that it will encourage you to do more research in this field, and find out different ways you can apply your knowledge into your business. Remember those days you spent in class and the good old sweat-shirt wearing, table loving (I mean the graphical tables drawn on the board) marketing professor would just go on and on about human emotions and how companies can exploit them to earn the shiniest pennies? Well what can you do if you do not have hundreds of people on your staff to do research for you on your customers' preferences and habits? 

Well... DIY! Actually DIY with our help! It is probably a good start to ask yourself questions such as: How does the customers' demographics relate to my inventory and the way I organize them? How do men and women respond differently to different methods of sales or promotion? Does age have anything to do with how technologically savvy my customers are? 

Once you are familiar with those basic marketing questions, think about more complicated things such as how do your customers respond differently to different auction framework? From broad questions like this one, you can come up with more specific things like "How much time should I allow a customer to react to an overbid situation?" These are absolutely important questions that are rarely asked - but I belive that they hold the key to your success.

And luckily, we can provide answers to most of your questions. Better yet, we can apply those to your project with our technological know-hows.

That brings us to the third question. What kind of relationship should we start in order to be mutually beneficial? Well, it obviously depends on many things such as your funding, scope, your ability and experiences, and well, our personalities. I firmly believe, though, that collaboration and information exchange are very important in order to have a successful project! Although we have the experience in marketing and technology, you are the one that would understand more about your customers, products and the state of the market. These things have to work together like gears in order to push the machine, so to speak. The importance of understanding about human psychology and how different parties (owner, developers, designers) should work together is highlighted in this article of -- it is definitely a very interesting read; you will also find answers to some of my questions in that piece as well.

It is very hard, at times, to gain trust from some of our customers -- I am sure that applies to all businesses. While they have reasons to withhold things from a contractor like us, think about the opportunity cost! The world of ecommerce is so vast that limited information exchange will result in very costly consequences. I encourage you to search on, ask more questions, rethink about things in different ways, take alternative approaches. I hope that this article starts a little fire of curiousity in your mind and it will burn on to new frontiers. Don't limit yourself... and don't hesitate to ask questions!

Talking about free exchange of information, tell me what you think about PIPA and SOPA? Comment or email!


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