25 Bite-Sized Business Tips Backed with Academic Research

By , April 14th, 2013 in Online Marketing | 21 comments
25 Bite-Sized Small-Business Tips


As you may have guessed from my previous post on academic copywriting research, I love making scientific studies play nice with small-business advice.

There is a lot we can learn from this rigorous research, but it can be hard to know where to start.

To help you get your feet wet, below we are going to look at 25 bite-sized overviews of some of my favorite research that combines small-business tactics and academic research.

Ready to learn something new?

Let’s dive in!

Creating Awesome Content

Content marketing is one of the best strategies for customer acquisition available to bootstrapped startups operating online. When you can’t go toe-to-toe with the ‘big guys’ by throwing money into ad buys, creating amazing content is the strategy to stand out online and provide value to current and prospective customers.

1.) Evoke strong emotions. According to Wharton research on What Makes Online Content Viral?, the secret to viral content is in triggering strong emotions and creating things of practical value. The emotions cited in the study included Awe, Anger, Anxiety/Fear, Joy, and Lust.

2.) Create a controversy. Research from Jonah Berger (author of Contagious) has shown that when it comes to creating controversial content, the key is to create divide on an issue of “low-controversy,” or one that people love to argue about within your industry, but that isn’t controversial to the public at large (like politics and tragedies).

3.) Leverage the 3B’s. According to some interesting research on social identify, people are passionate about anything that stirs up feelings about their “3B’s”, or their:

  1. Behavior
  2. Belonging
  3. Beliefs

If you create content that either confirms (and supports) or challenges an important ‘B’ in a popular group, your on your way to creating a successful piece of content that gets shared.

4.) Create magnetic headlines. According to an Eyetrack study, people often evaluate a post by only looking at the headline. If you check out this list of 101 Popular Headlines, you’ll notice that the most successful headlines either promise a complete solution (‘X’ Results in ‘X’ Days), create suspense or mystery, get incredibly specific, or are thought inducing (“What if ____ could happen to YOU?”).

Building a Community

There is no point in trying to acquire more customers if you aren’t building a community that they can embrace. While massive, faceless conglomerates might be able to get away terrible service and a customer base that doesn’t “love” what they do, small-businesses of today need to create a tribe of customers that fully support what they do. Here are some ways you can create a loyal following around your company culture.

5.) Stand for something. According to a study by the Corporate Executive Board, 64 percent of consumers who said that they had a strong relationship with a particular brand cited shared values as the primary reason. Businesses like Tom’s Shoes have risen above their competitors because they care about more than just their bottom line… what does your business stand for?

6.) Invite community participation. In one of the most interesting uses of social proof that I’ve ever come across, a study published in the Wall Street Journal analyzed the effectiveness of different signs in convincing people to conserve energy by running a fan in the summer. The results reveal some incredible insights about human nature. Of the four signs tested, the sign that utilized the positive social proof was the most effective: “All your neighbors are doing it.”

7.) Label your readers/customers. This seems like bad advice on the surface, but prepare to be surprised. Stanford researchers found people were more likely to vote when they were told they were politically active. Their turnout at the polls was 15 percent higher than the control group, despite the fact that they were chosen at random. The researchers concluded that people tend to emulate the actions of the positive label they’ve been assigned. So are you labeling your tribe?

8.) Pick a fight. …well, not literally! According to Henri Tajfel’s classic research on social categorization, if you want to build a loyal brand like Apple, it’s easiest to do with an enemy. He found that participants were far more loyal to a particular group when there was an opposing group at play. This promotes creating a friendly (but real) rivalry with a competitor.

Using Compelling Visuals

Human beings are visual creatures. Whether it’s your website, your advertising campaign, or just the overall look and feel of your brand, customers look towards visuals when they are evaluating you for the first time. Below are my favorite tidbits of research on using visual elements to create a more persuasive and engaging experience for new customers.

9.) Babies and pretty ladies. Sorry, average Joes—study after study shows that pictures of women (especially attractive women) and babies are the best for selling and conversions. The most important aspect for sales, however, was picture quality, so invest in good photos (and not stock images).

10.) The best color for conversions. According to research on patterns and isolation, the Von Restorff effect (aptly named after the researcher) found that things that stand out (or sharply break the perceived pattern) are more likely to be noticed. To test this effect, try using a few action colors on your website that don’t match your site’s overall color scheme.

11.) Make it easy to read. Many businesses who operate online often put “style” over substance when it comes to making their website easy to read. They should pay attention right about now: this study on typography shows that hard-to-read text resulted in a 20% drop in reading comprehension. Big fonts, plenty of paragraphs, and contrasting colors are a must.

12.) Use directional cues. In a study appropriately titled Eye Gaze Cannot Be Ignored (But Neither Can Arrows), researchers found that the gaze of faces and arrows are extremely effective at getting people to look at specific points on a web page.

Consider the results from the study below…

(Without a directional cue)

(With a directional cue)

Inspiring Customer Happiness

If you plan on staying in business for more than a year, customer happiness matters a whole lot – research has shown that 91% of customers say they will stop doing business with a brand as a result of poor service or an unsatisfactory experience.

13.) Get personal. In a study published in the Journal of Applied Social Psychology, researchers showcased waiters’ methods for increasing tips by 23 percent without changing service quality. The secret? Returning to the customers at their tables with a second set of mints. The researchers concluded that it wasn’t the mints that had the effect, but the perceived personalization that they implied.

14.) Make loyalty programs easy. The secret to creating customer loyalty programs that stick is to give people a head start. Consumer researchers Dreze & Nunes have conclusively shown through their research that loyalty programs are more likely to be completed if they appear already started.  Instead of giving customers a blank rewards card, start them off just by signing up.

15.) Make it competitive. Do people really care about “the scoreboard” that much? According to this research, they truly do. The researchers found that utilizing points (even meaningless points) encouraged users to stick with loyalty programs far longer (think about points on sites like Yahoo! Answers or Reddit).

16.) Reward the “gold” class. Speaking to a well-known (but slightly scary) aspect of human nature, new research has shown that customers become more loyal to a brand when they are labeled as “VIP” members… but only when they know there is another group below them.

17.) Embrace slow service. Contrary to popular belief, a recent Gallup Group study was able to show that customers don’t place speed as their #1 priority when interacting with companies. It turns out that competent and friendly service is far more valued. Take note: This is most often achieved by not rushing customers out the door.

18.) Appeal to the inner-ego. Smart businesses know that they must appeal to their target customer, but just how important is this process? According to studies on implicit egotism, people are far more likely to pay attention to others who resemble them in some way. Create a brand message that appeals to the very specific concerns of this ideal customer group (great examples: the AARP uses older celebrities in branding whereas trendy brands use hip, young models).

Implement Persuasive Pricing

When it comes to pricing, many entrepreneurs just “wing it,” and that’s a huge mistake to make. Price is closely related to context and other cues, so there are ways to persuasively price your products that can help you increase your bottom line.

19.) Using the old classic. Does the number 9 really rule the day? According to multiple pieces of research, it really does seem to be the case: even vs. sale prices, dropping the price to 9 outperforms everything. So in the following two forms of pricing:

  1. “Normally costs $70, now on sale for $55!”
  2. “Normally costs $70, now on sales for $59!”

…the second version actually performed the best of all, even though it was being sold at a higher price!

20.) Sell “time” over money. According to research from Stanford University, in many instances it is much better to sell time over money. Take for instance, the Miller Lite slogan ‘It’s Miller Time!‘, why would a bargain beer company focus on the time spent? According to the research, it’s because recalling ‘time spent’ is more valuable for a cheap, social item like beer:

“Because a person’s experience with a product tends to foster feelings of personal connection with it, referring to time typically leads to more favorable attitudes — and to more purchases.”

21.) Focus on comparative value. It’s okay to compare yourself to competitors, but sometimes direct comparisons on price won’t work out as intended. Some research suggests that calling for explicit comparisons on price can hurt sales because “[asking] customers to make a comparison caused them to fear that they were being tricked in some way.” Instead, applying the new S.A.V.E method from the older 4Ps of marketing, you should make explicit comparisons on value vs. your competitor’s offerings.

22.) Utilize the power of context. Is there ever a time when one Budweiser is worth more than another? Logic says that the answer should be never, but this research study in New York Times Magazine proves that this just isn’t the case. Consumers were willing to pay more for the same drink when they were told it was coming from an upscale hotel (vs. a downtown shack). It’s the same reason ‘consultants’ can command hire rates than ‘freelancers’, even though they may be providing the same kind of work.

23.) Offer enough price points. In his book Priceless, William Poundstone describes an experiment that shows multiple price points can greatly increase overall revenue. Here’s an overview of the 3 tests that were conducted, illustrations by Nathan Barry:

Test #1:

Test #2:

Test #3:

As you can see, when the ‘super premium’ beer was introduced in Test #3, the price of the $2.50 beer seemed less by comparison, and more people actually bought it than in the first test!

The overall revenue from Test #3 was the greatest as well, showing that higher price points for a premium package can actually help increase sales of other price points as well.

24.) Keep prices simple. According to an interesting study on varied price points, researchers found that prices with more syllables deterred people from buying. As an example, look at the following prices:

  • $1,499.00
  • $1,499
  • $1499

While they are technically all the same, the bottom price out-performed the rest consistently!

25.) Reduce friction. Some of your customers are going to be “tightwads.” According to the research, that means in order to successfully appeal to everyone, you need to reduce buying friction. Other research recommends the following tactics:

  1. Reframe the product’s value: Customers would rather pay $84/month than $1000/year (even though it’s the same in the long run!)
  2. Bundle products to reduce recurring pain points: The reason cars sell ‘Luxury’ packages is that it’s hard to convince yourself to individually buy heated seats, built-in navigation, OnStar, etc…
  3. Pay attention to the details: The study above showed how changing the wording from a DVD trial program from “a $5 fee” to “a small $5 fee” increased conversions by over 20%! Make sure you are being persuasive at every turn.

Your Turn!

Now I want to hear from you…

Thanks for reading, I’ll see you in the comments!

– Gregory Ciotti


About The Author

Photo of Gregory Ciotti

Gregory Ciotti is the content strategist at Help Scout, the invisible help desk software that turns email support into a fast, personal, and pleasant experience for your customers. Get more research backed content on our blog.
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Comments

  1. […] 25 Bite-Sized Business Tips Backed with Academic Research […]

  2. Thanks for this excellent post Gregory.
    There is so much useful information I don’t know where to start!
    I have shared it online and will be re-reading for weeks to come, as I implement all of them.
    Thanks again, you’ve gained another fan!

  3. Aengus says:

    Really cool points there. I especially like the one about the VIP treatment. I get mails from my airline all the time with exclusive offers for premium clients and it certainly works in making you feel a bit special.

    Clever man !

  4. Frank says:

    You’ve outlined some very important focal points and the support is very helpful to enable a clear understanding as well as implementation.

  5. Felipe Jose says:

    I really believe in the power of creating world class content. The other points listed here are also important… I know how images can grab the visitors’ attention and so on, but for me creating great content is up high the on list.
    I like your article. It’s really informative!
    Thanks for sharing!!

  6. aakash says:

    Great! that is something a writer would always seek prior to pen off.

  7. HunterGatherer says:

    What be da monthly?

  8. Hi Gregory

    This has to be one of the most interesting articles I’ve read in a long time. So much useful info here.

    Now I just need to find a web design company to pick that fight with ;)

  9. Absolutely one of the best and most useful set of sales/marketing tips I’ve read in a long time. Research rocks! I’ll be taking this info and advice to heart. Thank you!

  10. The academic research changes the business … may more researches like this can change academic patterns.

  11. I’m a research sponge and these nuggets are golden. Thank you!

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  13. This is a great summary and I’ve shared it in my various social channels. To me it’s always more valuable to have research behind a recommendation than just personal opinion. Now here’s a question for you that I didn’t see addressed … I have heard (but don’t have the research) that too many choices means people won’t choose. For example, more than 7 choices for taste tests of different varieties of a product and people get overwhelmed and won’t try. But 3 to 5 choices and they will try, and sales go up. Do you have any studies on how many choices are too many?

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  15. Jonah says:

    When you get ready to start a business, it’s important to check out some business tips. Advice from someone who has been in your shoes in the past is extremely valuable because it can help you avoid major problems and ensure that you’re building your business on the right foundation and growing it in the right direction.

    Here are a few small business tips to help you get started on your dream of running your own business.

    – See more at: http://bit.ly/11PBGjh

  16. Excellent piece Gregory… I tend to find “Top Tip” articles very dull, repetitive and ego based… yours is refreshingly balanced, informative and based on research… Loved the nipper gazing & the power they induce… Will Cory of The Marketing Blog always uses feminine images to grab attention… brilliant… keep up the great work.

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