3 consumer behavior experiments to inspire your startup's growth

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Startups are synonymous with innovation. In this very competitive market, they must constantly come up with innovative ideas. However, not all ideas are good enough, so it becomes essential to test ideas beforehand in order to validate them. A well-known method for doing this is called A/B testing or, more accurately, experimentation.

, however, too often fail due to inaccurate experience design. We have all witnessed it. This leads to a bias against the process of experimentation altogether. We strongly advise against this prejudice. Experimentation can be the key to growing a startup.

However, many problems can arise when designing a test. The one we will particularly shed light on in this article is how understanding intelligence can lead to successful experience design. This is something not commonly talked about, and I see many in the industry not paying attention to it.

Related: The 5 Key Elements of a Successful Experience

Consumer behavior intelligence, or , is the area scientists study in terms of money and value. Behavioral economics reveals that human decisions, especially in the context of money, can turn out to be quite irrational. Therefore, we can leverage behavioral economics in designing our experiments.

If you are looking to improve your revenue, utilization, trial rates, or retention, then experimenting in alignment with behavioral economics may be a growth hack for you. This can be a very powerful concept in designing your experiments. Given the vastness of behavioral economics, let's break down three concepts and discuss how they can be used in experimentation.

1. The lure of free

It seems logical that charging an insignificant fee for a service would make no difference to customer growth. It is not.

Let's study this concept with a famous: 's Kisses vs. Lindt, gourmet chocolate. An experiment was conducted where Hershey's was priced at 1 cent and Lindt's was priced at 15 cents. Consumers were asked to choose between them.

Significantly more people chose Lindt at a much higher price than Hershey's, which was almost free. Consumers justified their choice by saying that Lindt was luxury chocolate.

Later, the experiment was repeated with the same group of people. However, this time the choice was a bit different. There was a 1 cent reduction in the price for both cases. That means Lindt went down to 14 cents and Hershey went free. To the surprise of the researchers, the results reversed completely and significantly more people chose Hershey's, even though Hershey's was plain chocolate.

This experiment proves conclusively that there is a deep appeal to "free" in the human mind, and we make a big distinction between "free" and "nearly free". So here's a tip: If you're in an app business, know that in a user's mind, "free" and "almost free" make a big difference. These are two distant options. Also keep this in mind when designing your test.

Related: The Basics of Experimentation and Why It's Key to Growing Your Startup

2. Priming

Another experiment was conducted at an airport. People at the airport were asked to get yogurt or fruit from a counter. Initially, almost half of them chose yogurts and the other half fruits.

For the next part, someone on the way to the counter talked to the people in the queue. What they found was that when this person told them about yogurt, people chose more yogurt. And when that person told them about the fruit, they picked more fruit. This is a great example of bootstrapping.

What we're learning here is: the key is to get the consumer's attention to a product/service you want to sell. Their decision will probably be influenced automatically. The way to get attention doesn't even have to be direct.