8 Ways Recency Bias can Help or Harm your Business

I love behavioural science and learning more about the psychology behind purchasing decisions. 

If you want more people to speak highly of your business and return to buy again, you must ensure they hold a good opinion of your business and its products.

And whether or not someone perceives your business and/or products as good or bad relies heavily on their last interaction with your business.

There are cognitive biases (e.g. recency bias, peak-end bias) that lead us to make judgements about a business based largely on our last interaction with it.

For example, we might have a lacklustre experience with a business, but recall it as good because the last customer service representative we dealt with was so friendly and helpful.

On the other hand, a great experience with a business can easily be soured if our last interaction is bad. 

Of course, people remember more than just the last interaction with your business, but as recency bias suggests, the last one does tend to hold more weight.

This article explains the common points of a customer experience that can leave a good or bad lasting impression.

 

Where recency bias applies to your small business

Simply put, recency bias suggests that your buyers’ brains store recent details in their memory first.

So think about the last step consumers take in the different pathways of your business. 

This will be different for each business and dependent on the marketing and sales channels you use. 

For example, it might be:

• The last page on your website that Instagram users see when they click a link from your profile. 
• The last page of your checkout process on your website or in your Etsy shop.
• The point of sale section craft show shoppers see before they leave your booth.

Walk through the different ways people interact with your business and the last step in each of those interactions. This will help you find your unique areas to address.

Below are 8 of the most common places a business has an opportunity to use recency bias to their advantage.

 

8 Ways to use recency bias to your advantage

These are the common places your business can leave consumers with a good or bad perception of your business.

 

1 – Checkout process

You want your customers’ checkout process to be as smooth as possible. 

That might mean:

• Having a quick and efficient process – at a craft show, have your shopping bags ready to go so you can quickly wrap a customer’s purchase. Online, if you have your own website, ensure the checkout process is quick and easy; don’t have them fill out unnecessary fields or go through too many steps to complete a transaction.

 

• Offering payment options – the more payment options you offer customers, the happier they’ll be. At a craft show, if your customers have to run to the ATM because you don’t accept credit or debit, it’s an inconvenience for them. 

 

• Clear communication – online, shoppers want to receive a confirmation email and be informed about what happens next. A message on the last page of the checkout process or an automatic email sent explaining how long it takes to process orders, which days orders are shipped, if they’ll receive a shipping confirmation email, etc. will ensure customers are informed. Lack of communication can lead to frustration. At a craft show, you may want to let customers know how to get in touch if they have an issue with their purchase.

 

2 – Packaging

A customer is typically the most excited about their purchase, right after they buy and receive the item. 

Lack of care when it comes to wrapping a purchase can tarnish that excitement. 

Imagine watching a sales person toss a new top into a bag without folding it, versus watching one neatly fold the top, wrap it in tissue paper, and place it into a branded bag. 

As a consumer, the top feels more valuable and your purchase feels more valued when the sales person takes a few extra seconds (and maybe spends a few extra cents) to thoughtfully wrap your purchase. 

Consider this when wrapping your customers’ purchases.

At a craft show, spend a little extra money to have shopping bag materials that will elevate your customers’ last experience. Set your station up so it doesn’t require too much extra time to thoughtfully wrap a purchase.

For online orders, take the time (and spend the money) to wrap packages in a way that ensures items arrive in good condition. 

It leaves a good impression when each customer gets to have a beautiful un-boxing experience. 

 

3 – Extras

If your profit margins allow, consider adding a perk to each order that will delightfully surprise your customers. 

For example, a soap business may include a free sample-sized soap with each order so customers can try a different scent or formula. 

A jewelry business may include a small jewelry bag so customers can prevent their item from tarnishing when being stored.

If a freebie won’t work for your business, you may consider including a coupon with a promo code customers can use to receive a small discount on their next order. 

Even a thank-you note helps to leave a good impression and let customers know how much you appreciate their order. 

Don’t throw a bunch of promotional material in with an order, or send them freebies that are leftovers no one wanted to buy.

 

4 – After-care

I have gone from appreciating a business and singing their praises, to vowing never to buy from them again and warning others to stay away simply because of poor after-purchase customer service.

Treat your customers just as well after they pay as you do when you’re trying to make a sale. 

When a business is slow to answer emails or seems disinterested in helping customers solve their problems, customers remember that experience. 

Poor after-care is a good way to ensure customers never become repeat customers.

 

5 – Point of sale section

Put extra effort and care into the last section of your craft show display.

This section is called your point of sale display and should appeal to the shoppers who are leaving your craft show booth without buying, as well as those who are buying. 

Set up the point of sale section so people who are buying can find items to complete their purchase and so it’s a comfortable space to pay (e.g. a spot to set down their bag and pay, out of the way of people shopping the booth, etc.).

This section can also be used to leave a good impression on those who aren’t buying. They might be able to grab your business card, get a freebie (e.g. a bowl of mints or candy canes during the holidays, enter a draw to win a price, etc.), or simply hear you thank them for stopping by.

>> Learn more about a point of sale display here

 

6 – Shipping prices

No one likes paying for shipping. Even though “free shipping” is never really free…the fee is simply worked into the product’s price, customers would rather feel like they’re paying for something valuable (your product) than something they deem less valuable (shipping).

Consider raising your product prices slightly or reducing your profits (if you have healthy profit margins) to lower your shipping prices or offer free shipping. 

Getting to the checkout page and finding that shipping fees are almost as much as the product itself is likely to sour your customers’ entire experience.

 

7 – Shipping options

Online shoppers want what they want quickly. As a consumer, there have been times when I don’t want to, or can’t, wait a week or more for delivery.

In those times, I appreciate a business offering the option for faster shipping, even if I must pay double or triple the shipping fees. 

Offering your customers shipping options will help ensure a good last impression.

 

8 – Shipping speed

As a business owner, I understand when and how a package is delivered is in the hands of the postal service, not the business. 

But as a consumer, I do hold a business partially responsible for shipping times. 

When an order arrives quickly I’m happy with the business.

When an order takes forever to arrive, I wonder why that business has such a long turnaround time and why they don’t use a different postal service. 

If you constantly receive reviews with customers mentioning they’re happy with the item but shipping took too long, or emails asking where an order is, it may be time to look into different shipping services. 

I realize there are limited options, but some postal services are more reliable than others and some are quicker than others (especially with international shipping).

I have stopped ordering from businesses due to their slow shipping process, and I’m sure many other consumers have too.

 

Has a good or bad last experience with a business changed your overall perception of it?