Good marketing is often about using skills associated with the right side of the brain: storytelling, imagination, intuition, etc. But great marketing includes the other hemisphere as well.
We’re talking science, of course. A closer look at human behavior and why it is we do the things we do reveals a number of concepts that can be applied to marketing messaging and content. The results not only manifest a strong sense of creativity, but also trigger inherent behaviors in consumers that can work to a business’s benefit.
Luckily, you don’t need to be a psychologist to understand these behaviors. In this guide, we’ll review a number of behavioral principles and show you how one of a leading e-commerce store has successfully applied them to their marketing efforts for greater conversion rates.
We’ll walk you through the buying process step-by-step in a real-life case study. By using concrete examples of strategies and insights, you will learn both how and why they work.
You’ll walk away with knowledge of how to use marketing psychology to boost your e-commerce sales and ensure your customers keep coming back. These learnings are based on how human psychology works and you can replicate them in any e-shop.
Along the way, we’ll also give you specific tips on how Exponea can help you get started.
Table of Contents
Would you rather read this guide in an e-book format? Don’t worry – we’ve got you covered.
What is marketing psychology (& why you should care)
Before we dive into the analysis, you should understand how and why marketers use psychology to influence consumers.
Let’s start with the basics.
What is marketing psychology?
To give you a proper definition, marketing psychology is a branch of applied psychology which studies the factors that influence consumers’ attitude toward products or services.
Simply put, it looks at how presenting a product affects the consumer’s behavior.
Marketers use it to predict how consumers will act and to find ways to influence their decisions. Making a product seem desirable or attractive is one example.
Marketing psychology closely relates to consumer behavior: the study of how and why we purchase goods or services.
Heuristics & cognitive biases – what they are and why we need them
Marketing psychology borrows a lot from behavioral sciences, such as neuroscience, cognitive sciences, and other fields that study how the brain works.
Although people like to believe that they make rational, well-thought-out decisions, the opposite is often true. The amount of information that your brain absorbs in a day is just too much to analyze.
To help us make faster decisions, our brains developed shortcuts that help them process information selectively. These shortcuts are called heuristics.
You can think of them as rules of thumb. For example, let’s say a freshman in college is shopping on his own for the first time. He heads down the detergent aisle and passes 10 different detergents he knows nothing about in order to get to the Tide section, which is a brand he trusts simply because it’s what his parents use at home. If he knew more about the 10 different brands he ignored, there’s a good chance he’d choose to try one of them over his old standby, but this mental shortcut prevents that.
Unfortunately, heuristics often cause errors in our judgments and result in cognitive biases.
Cognitive biases describe irrational tendencies in decision making. They can affect how consumers buy your products and perceive your brand.
By understanding cognitive biases, you will be able to read your customers’ minds better and design your product or your marketing strategy accordingly.
What is the value of marketing psychology for marketers
There is a huge value for marketers in using these approaches for their marketing strategies.
But it’s not as simple as copying out-of-context strategies and throwing around popular buzzwords. The key is knowing how these strategies can work together.
Understanding what goes on in your customers’ minds and how they make decisions enables you to create a strong, targeted marketing strategy that brings conversions. You can use it to improve your marketing campaigns and reach your customers faster.
The application of psychology to marketing is by no means a new enterprise. Business organizations and professionals from all over the globe have endeavored to use behavioral patterns to their advantage over the years. The difference now, of course, is that there’s technology sophisticated enough to support these initiatives in a much more effective way.
Introduction to case study: In-depth behavioral analysis of one of central europe’s largest e-shops
Now that you have a basic understanding of marketing psychology, let’s dive into the actual application of it.
In the following chapter, we’ll walk you through a typical online buying process:
- the first website visit
- browsing products
- the purchase.
Our case study focuses on one of the largest online computer and electronics stores in Central Europe. It sets the direction for its competitors in the region. In 2019, this fast-growing store more than tripled their annual income from the previous year.
Their secret weapon: exemplary marketing strategies rooted in consumer psychology.
These principles are based on human behavior and they apply across the board, whether you are in the US or elsewhere. When used well, they can boost your sales and make buyers never want to shop anywhere else.
Despite the differences between the US and European markets in terms of buyers’ expectations and online shopping behavior, you’ll still find many practical tips by studying what this e-shop does.
To show our findings as clearly as possible, we’ll share a simplified, anonymized version of their site with you.
Are you ready? Let’s dive right in.
Practical application of marketing psychology in e-commerce
In this chapter, we’ll take you through the purchasing process in our chosen e-shop, pointing out insights along the way. These insights will show you how to influence consumer behavior and your customers’ choices while making them feel empowered.
Here’s our scenario.
Imagine you set out to buy a new mobile phone. Your buying process will consist of five steps:
- The first visit = Attention Phase
- Browsing products = Interest Phase
- Considering the options = Consideration Phase
- Making the final decision = Decision Phase
- Making the big purchase = Action Phase
We’ll take a look at each of these steps in detail. Throughout the process, we will analyze the strategies our e-shop uses to nudge you toward purchase, and explain how and why they work according to marketing psychology.
Let’s get shopping.
Applying marketing psychology to the homepage
» The first visit: building credibility with social proof «
Welcome. You just landed on the e-shop’s homepage. Most likely, your search engine has taken you to the e-shop’s page for your home country.
Though Fresh Electronics is a global company, the first thing you see is a landing page tailored to your country, including reviews from customers in the local language. Even if it’s your first time on Fresh Electronics’s site, you won’t find it hard to trust their offerings if you see positive reviews from like-minded consumers.
Marketing psychology refers to this principle as social proof. It says that to decide what is correct, people look to others to see what they think is right. The more you see others do something, the more you perceive it as correct behavior, because your brain judges that they might know more about the situation.
In Fresh Electronics’s case, the more positive reviews you read, the likelier you are to trust the e-shop with your purchase.
Exponea customers have used Exponea Experiments to modify their site so that it displays customer reviews to first time customers, establishing trust. Experiments enables marketing teams to make changes like this without needing to rely on IT or development resources.
Applying marketing psychology to the category page (part 1)
» Browsing products and categories «
You’ve decided Fresh Electronics is trustworthy, so now it’s time to look through their offers. As you’re browsing through their products and categories, you might not realize it but these too have been deliberately organized to influence your decision-making process.
Let’s look at each section in detail.
Night pickup availability (Hyperbolic discounting)
Starting with the left-hand banner ad, there’s a message that reads: “Night pick-up is available in your region.” Here, Fresh Electronics is employing a cognitive bias called hyperbolic discounting. This bias explains our tendency to value the immediacy of time over the higher value of money.
For instance, if someone offered you $100 today or $200 one year from now, which would you take? $200 is obviously a greater amount, but would you wait that long for it? Statistically speaking, probably not. Similarly, if you’re eager for a new cell phone and there’s a model available for pick-up in your area that very same evening, there’s a good chance you’ll pay a little extra for it rather than pay less to wait, say, a week for delivery.
What this means for your business is that you should always offer fast delivery options, even if the cost is higher. To give you another example, a limited-time offer of next-day delivery if the customer purchases your product immediately will have a similar effect.
Exponea Web Layers lets you add hyperbolic discounting messages directly on your site, shown to the audience of your choice. This lets you show messages like “Night Pickup in Your Region” only to customers living in a specific area.
Blockbusters of the week (The Scarcity effect)
Next on the Fresh Electronics site, you notice their “Blockbusters of the week” section. These are temporarily discounted products. The deals could last a few hours, a day, a week, etc. After that, their price goes back to normal.
This strategy, which aims to encourage you to purchase immediately, is rooted in the scarcity heuristic. The scarcity heuristic says that humans place a higher value on an object that’s scarce, and a lower value on those that are in abundance. For example, gold is more valuable than copper because gold is not as abundant.
These short-term deals can also drive people back to your site by playing on the fear of missing out (FOMO). The fear of missing out can lead to concerns that one might miss an opportunity for social interaction, a novel experience, or a profitable investment. In this case, you wouldn’t want to miss out on a great deal, so you might check back regularly to see what’s on sale, or if something you wanted is still on sale.
Educating your customers (Reciprocity)
At this point, Fresh Electronics seems like a trustworthy shop for the purchase you have in mind, and there are good deals to boot. But there’s still room for more convincing. When you get to the bottom of the page, you notice a menu of links with different education-based pages for you to explore:
- Why Fresh Electronics
- How to choose a phone
- How to recover data
The first page lists the benefits of shopping at this particular site, the second offers tips on choosing the type of device you’re in the market for, and the third gives advice on how to switch from your existing device to the one you’re about to purchase. All in all, it’s everything you need to know to make a well-informed purchase and the transition to your new device much easier.
The principle being utilized here is called reciprocity. The rule of reciprocity says that people will feel a sense of indebtedness if you give them something, even when faced with an uninvited favor (5). In this case, Fresh Electronics is using the reciprocity principle to trigger purchases in exchange for clear and valuable instructions. Doing something extra for your prospects in this way, such as guiding them through the purchase process, can help you turn them into loyal customers.
Bonus! Educational articles like these can also work double time by boosting your SEO, or as repurposed content in your marketing campaigns.
Applying marketing psychology to the category page (part 2)
» Considering which phone you should choose «
After you’ve browsed for a bit, you’re finally getting down to choosing which phone is right for you.
The tactics that our e-shop uses here can be explained by four behavioral principles that “nudge” you, the customer, in a certain direction.
- The naming and framing of categories
- Driving the customer towards the middle choice
- Empowering customers to make a decision
- Putting the products into context
The naming and framing of categories (The framing effect)
You’ve narrowed down your decision to a couple of different options and now it’s time to decide how much money you’re willing to spend on this phone. At this stage of the process, Fresh Electronics offers an assist by categorizing their devices into three different pricing groups:
- People’s Choice
The framing effect is a cognitive bias in which people decide on options based on whether they’re presented with positive or negative connotations; e.g. as a loss or gain (6). In our example above, the least expensive option on the far left is named “Traditional” rather than “Cheapest” in order to soften the potentially negative connotation that being cheap might evoke.
Its opposite, the most expensive category, is called “Deluxe” in order to appeal to the high-end buyer who’s willing to spend a premium. By not outright saying the devices in the third category are extremely expensive, instead, the category appeals to the desire for a luxurious experience.
Driving the customer towards the middle choice (The center-stage effect)
Having three categories is not accidental, either.
- People’s Choice = Middle Option
Let’s say that when it comes to your mobile purchase, you don’t want to spend too much but you also want something of good quality. You’d be in the same boat as the majority of consumers who, when presented with a number of offers, have a tendency to choose the middle option.
This principle is called the center-stage effect, which says that consumers believe options placed in the center of a simultaneously presented array are the best bet. This belief translates into their choosing options placed in the center more often than those at either end of the display.
You’ll notice how many companies will give their middle-road pricing package special treatment when it comes to design, like a “Most popular choice!” banner, or something to that effect. Following suit in your own pricing package design can help you to increase the sales of certain products or services.
The bottom line: If you want to drive the sales of a particular product, place it in the middle.
Empowering customers to make a decision
You might be wondering why there are two products with similar parameters and price offered in the middle category.
One way to explain this is the notion of customer empowerment. People tend to connect their buying experience with the amount of control they have in the process.
So, when you give your customers a choice between two very similar options and let them make their decision, you will create a better buying experience and, ultimately, it can help you turn the prospect into a loyal returning customer.
Putting the products into context (Anchoring)
One problem which e-commerce businesses often face is the high number of products being offered.
Imagine that while you’re browsing Fresh Electronics, you’re also checking out another shop in the next tab. They too have a lot of offerings in the mobile device category, but they’re not presented in an organized way. You can’t sort products by their value or their condition, so there’s no telling which is high-end, which is middle-of-the-road, which is used or new, and so on. Without categories, the number of choices ultimately feels too great so, overwhelmed, you close out of the window and head back to Fresh Electronics.
The reason the Fresh Electronics site is so much easier to visually and mentally process is because it employs a principle called anchoring.
Anchoring tells us our brains don’t consider the value of an option based on its intrinsic value. Instead, we compare different offers against one another and ultimately make decisions based on those comparative values. In other words, we ‘anchor’ our decision-making process to the surrounding situation, rather than thinking rationally to make the best decision overall.
Fresh Electronics anchors you by showing only four products to start, categorized into three groups. This creates a baseline to which you can compare all other mobile offerings. In the end, it’s likely this anchor that will influence your perception of value and final purchase decision.
Applying marketing psychology to the product page
» Making the final decision «
In times where shopping online is the new normal, there is one thing that can help you stand out from your competition: helping people make better choices and creating an experience that sweeps your customers off their feet.
This is where choice architecture and nudge theory comes into play.
It’s not just the anchoring that makes you feel secure with your shop of choice. There’s a whole microcosm of activity happening on the site; small things you might not be able to place or articulate, but somehow they add up to a strong preference for Fresh Electronics. This is known as nudge theory.
A nudge makes it more likely that an individual will make a particular choice, or behave in a particular way, by altering the environment so that automatic cognitive processes are triggered to favor the desired outcome. Most important to remember: it’s a gentle suggestion, not a mandate.
There are a number of behavioral strategies and principles in place here to nudge the customer in a certain direction. Let’s look at them in more detail.
Here is what our e-shop shows about the product.
When your brain feels uncertain about something, it will often simply avoid decision making. This is called doubt avoidance.
Using icons on your product or service banners such as “Over 98% reliability” is a great way to instill trust in your customers’ minds. It creates a positive notion or feeling about the product, removing doubts and encouraging decision making. Other icons that highlight product benefits can include: waterproof, eco-friendly, and so on.
Affect heuristic (Zero price effect)
By highlighting free benefits, you can create a positive response in the customers’ minds while they’re browsing your products. This is explained by the affect heuristic. Free options trigger a more positive response from the brain than those that come with a cost. The outcome is the zero price effect, which suggests that people do not simply subtract costs from benefits but instead they perceive the benefits associated with free products as higher (9).
Not only that, but free add-ons are fast becoming a consumer expectation. According to a recent report from NRF, 75% of consumers surveyed expect delivery to be free even on orders under $50, up from 68% a year ago. What’s more, “unexpected costs” is the top reason why people abandon shopping carts.
If you’re offering freebies as a purchasing incentive, try showing a slash mark through the original price of the item. A better understanding of exactly how much they’re getting for free will persuade consumers to follow through with their purchase.
Scarcity heuristic and loss aversion
We’ve already mentioned the scarcity heuristic. It says that when a product is less readily available, be it because of limited time or quantity, we tend to perceive it as more valuable. E-commerce businesses use this strategy to drive people to purchase. Including such an icon on your product detail page can help you prompt your customers to buy.
The concept of loss aversion can also help us out here. It means that people perceive the psychological pain of losing something as being twice as powerful as the pleasure of gaining.
What does it mean for us? The mere possibility of losing the chance to buy what you want can be a strong driver for people to buy. Imagine you see that an item you’re looking at has been sold 5 times this week. You don’t know if there are 7 items in stock or 700. Would you take the chance of waiting to purchase later, now that you’ve found what you were looking for?
The contrast effect
When you compare two things against each other, you might get a distorted perception if one or more differences are enhanced. This is caused by a cognitive bias called the contrast effect.
The comparison can be explicit or implicit and it can apply to any qualities or features, including price. In practice, when you compare an expensive product to a more costly one, it will make the product appear cheaper than it actually is.
In our case, presenting the prices before and after makes the product appear cheaper than it actually is.
The salience bias
We borrowed this principle from neuroscience. Salience bias, also referred to as perceptual salience, says that people will focus on the more prominent information and ignore the less prominent. It creates an inclination towards the more striking, noticeable messages, usually due to a high contrast between them.
Our e-shop uses this tactic to bring your attention to a special deal marked with a yellow highlight. These are the time-limited offers that the e-shop wants to highlight among all their other products.
The principle of least effort
Finally, Fresh Electronics demonstrates an awareness of the principle of least resistance. This theory postulates that animals, people, and even well-designed machines will naturally choose the path of least resistance or “effort” when setting out to accomplish a task.
In the case of our e-shop customers have the ability to choose the “Buy Quickly” option. This lets customers who have previously saved their details on the e-shop’s site to skip a few steps ahead in the purchasing process. Reducing the process to only a few clicks removes unnecessary friction and creates a better customer experience.
Applying marketing psychology to the shopping cart & checkout
» The big purchase «
You’ve made it to the most important part of the process: the big purchase. Let’s take a look at how our e-shop helps its customers to address their needs and concerns at this most important stage.
Offering extra services before the purchase
To help you learn more about a given product, the e-shop allows you to open the product detail page by clicking on its image from the category page. Do so and here’s what you’ll see.
Note that many of the techniques we’ve discussed earlier are also used on this page, but with even more emphasis: more reviews, more photos, and more content in general. As we get closer to purchase, the intensity of the tactics used increases.
You take it all in and you’re convinced. This is “The Phone” and you’re going to buy it. You click on “Add to cart”.
But wait, clicking on “Add to cart” doesn’t take you directly to the cart. The e-shop has added an extra step, where you can choose from add-ons and services to customize your new phone.
These add-on services include extending the warranty, insurance, even adding a screen protector before they send you the phone.
To make your experience even smoother, the e-shop also offers the installation of antivirus software and an initial set up to save you time. No hassle for you whatsoever. If you were worried about setting up your new gadget, this sounds like a no-brainer, right?
But there’s more to it.
As you know, every extra step that your customers have to take before getting what they want increases friction and leads to lower customer satisfaction. However, this doesn’t apply if you add a step that will benefit them.
In our e-shop’s case, these extra services hit the nail on the head. The add-ons address what really concerns customers and demonstrates a deep understanding of their needs. Every product displays the add-ons that are tailored to its buyers’ biggest uncertainties.
This appeals to a tendency of the human brain to remove any concerns by making a decision quickly and impulsively. It’s called doubt-avoidance tendency.
At this point, the customers will likely say ‘yes’ to an extra service if it helps them to remove their doubts about purchasing. It’s a great way to push the customers toward buying and to upsell them, while also improving their experience.
The shopping cart
There are two things worth mentioning in the design of the shopping cart page.
Subliminal messaging to drive you towards online payment
During our analysis, the e-shop was running a marketing campaign around free delivery. According to their rules, you can get free delivery if your order is over $160 and you enter the code “ONLINEPAYMENT”.
They’re using a tactic called subliminal messaging. The code “ONLINEPAYMENT” is a message designed to bypass your conscious mind. It appeals to the unconscious and nudges you towards a clear action: online payment, even though it’s not a condition of the offer.
Displaying similar products
When you look at the items in your cart, you’ll notice another section just underneath them: recommended products.
The e-shop uses collaborative filtering, a method for generating recommendations for a particular customer based on the preferences of other customers with similar characteristics.
The result is a set of personalized recommendations. If they’re relevant, they can increase the time customers spend on your website and prompt them to make more purchases.
Streamlining the checkout process
The golden rule that applies to the checkout process: remove all friction and make it simple and easy.
To do that, you can split the checkout process into a few smaller steps. This will help you manage your customers’ perceived effort. Make sure that customers feel that the actions they need to take are simple and easy.
Our e-shop does this by breaking down the checkout process into three simple steps: the cart, shipping & payment options, and delivery details.
For each step, you can only access one section at a time. Each one has to be completed before moving to the next one.
Breaking the checkout into these three steps makes the process seem simple and reassures customers about how much more they need to do. This decreases the stress they might feel when they see one long form that needs completing.
Registration before placing your order
In the last step, in the “delivery details” section, the e-shop asks you for your email in order to confirm your order. This happens even before you add your delivery address.
Doing so will create an account and register you on the e-shop’s website.
At this point, when you are so close to making the purchase, even if you really don’t want to register, people are likely to continue in their purchase.
Marketing psychology refers to this principle as sunk cost fallacy.
This happens when people continue their behavior or action as a result of the time, money or effort they invested into it previously, even though an additional investment might not be warranted.
Here’s an example. You spent $30 on a ticket to a show. It took three hours of waiting in line just to get your hands on it. On the day of the show, you find out the venue’s been changed to a new place, and it’s a five hour drive from you.
Oh, and there’s a blizzard outside, too. But you don’t want to give up (the ticket was $30 and three hours of waiting!) so you decide to make the effort of driving up there.
Because of all the effort you already invested in getting the ticket. You really want to get the reward (the show), even if it’s not worth the initial cost (five hours of driving through the snow).
In situations where costs are higher than benefits, your brain evaluates the extra costs differently than your initial investment.
Similarly, our e-shop uses the “sunk cost” of making it all the way to the checkout stage to encourage their new customers to register. They’ve made it this far, they might as well finish the registration so they can complete their order. And once they register, it increases their likelihood of coming back and shopping there again, thereby increasing the store’s retention rate.
To complete the registration, the customer needs to complete a simple form:
The e-shop designers wanted to make this process as easy as possible for the customer while maintaining high data quality for the shop. People make mistakes all the time, but you can prepare for this by designing a system that expects error.
‘Expect error’ is a type of nudging principle that helps you to influence the decision of your customer. It’s simple: predict where the customer can make a mistake, and prepare a “nudge” – display a tooltip or a message that will guide them in the right direction.
Here is an example of how nudging works in practice:
Guided by helpful nudges, you complete the order form and you’re done! You’ve successfully bought your new phone.
The final step is actually getting the phone into your hands.
Our e-shop offers three options of making that happen: home delivery, self pick-up from a local branch, or pick-up from a lockbox of your choosing. This is a final example of how our e-shop provides options (but not too many!) to help create a tailored experience to best suit their customers’ needs.
Exponea Experiments makes it easy to change every step of your checkout process to find what works for your customers. Different customers have different needs, which is why Exponea lets you AB test different checkout paths to see which works best for your business. The best part? It can all be done with a visual editor. No need for lengthy hardcoding processes. See Experiments in action.
Marketing psychology & the future of US e-shops
Pretty much every company knows the importance of marketing. But most e-commerce businesses aren’t using marketing psychology to get a competitive edge.
Remember the phrase, “innovate or die”?
To succeed, you need to continuously improve your service. If you don’t, you can bet your competition will. The future of US e-shops will be all about automation, impressive customer experiences, and smarter choice architecture.
But before you can truly innovate in those areas, you need to understand what drives consumer behavior and how to make the most of your knowledge.
This is where Exponea can help. We combine a feature-packed customer data platform with deep knowledge from various behavioral fields to help our customers succeed.
Following the strategies and tactics in this article will help you boost your sales, increase customer retention, and drive your prospects to make faster purchasing decisions.
Looking for additional information and more marketing psychology knowledge?
Would you like to get answers to the following questions and even more?
- Are carousels on the homepage a good idea?
- What’s the difference between direct and indirect social proof?
- How can you write compelling copy?
- What’s gamification and how can you use it?
- What other cognitive biases can you use on your site and in your communications?
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The ultimate tool for applying marketing psychology strategies
Exponea makes it easy to incorporate marketing psychology-based strategies into your sight and marketing materials, all from one platform.
Once you have knowledge of marketing psychology, using it requires you to be able to do three things:
- Collect data about your customers and visitors.
- Analyze your data in meaningful ways.
- Act on your analysis.
Exponea is purpose-built to help you accomplish each of these steps.
Exponea can ingest your customer data from all sources. Web data is easily captured using a short piece of tracking code. Other data, like in-store, call center, CRM, or anything else you collect, can also be sent to Exponea using either a flexible data import option or native integrations.
Since Exponea can collect data from any imaginable source, it lets you build the most complete picture of your customers possible. Demographic, behavioral, transactional, event data, campaign-level data and more give you a 360 degree customer view.
Exponea offers more than just data collection and retention. It also provides a full-fledged analytics suite to help you uncover insights hidden in your customer data.
The fundamental building block of Exponea’s analytics is the customer (unlike other analytic solutions that start with the “session”). This customer-centric architecture gives you deeper insights into how your customers behave, and how to best reach them.
This data can help you discover both how your marketing psychology-inspired tactics are working, and where you can potentially try out new tactics for the biggest impact.
Acting on your data
Exponea gives you all the tools you need to turn your customer data and insights into high-performing campaigns, sites, content, and more.
With Exponea, you can easily transform your content so that it adapts to the customer that’s seeing it. Is someone a first-time visitor to your site? Exponea can detect that, and then show them user reviews on your home page to create social proof.
Creating such a campaign can be done easily with Exponea’s drag-and-drop campaign editor. You can even enhance these campaigns with AI-driven recommendations and predictions.
Imagine being able to predict a customer’s likelihood to purchase during their browsing session, then automatically changing site content based on that prediction. You could, say, show a countdown banner to customers with more than a 50% chance of purchasing to nudge them towards taking an action.
Exponea’s total flexibility lets you act on your data in almost any way you can imagine. Comprehensive customer knowledge combined with a complete execution solution makes Exponea the ultimate marketing psychology tool.
If you want to start using psychology-based tactics for your brand, schedule a call with Exponea.
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