Eric does research on the behavior of shoppers and browsers.

Defaults matter (he says) because people like to be able to make choices, but they don’t want to have to make choices. E.g., if the form for new employees that lets them opt into a 401K plan starts out with 3%, lots of people will take that “choice.” E.g., XP defaults to having firewalls off. The biggest change they could make would be to pre-check the box on the form where you make the settings.

People are very loyal. The average time people spend on Amazon decreases on repeat visits. That’s because we get better at navigating Amazon. This locks us in. And in travel, most people book at the first place they look.

He shows data that if you use clouds as the background of your web site, people are willing to spend 15% more for furniture. [Damn lizard brain!]

Remember, he says, that we’re very different from our customers. The customer wants appropriate defaults; “defaults are the most important you can make” to shape behavior. The customer wants to minimize search. And the customer wants to pay in ways that minimize psychological cost — that is, paying $20 for product and shipping together is different than paying $15 for the product and then paying an added $5 for shipping.

Q: How do we go from $0 to $0.01, which you’ve said is the biggest hurdle?

A: Have them pay for added services.

Q: How about subscription prices?

A: Give ’em a two-part tariff.

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