Signalling theory
Costly commitments signal quality that shoppers cannot observe directly.
Three of the eight page areas.
It also applies sitewide, on every page. See everything at work on Product pages
Four ways to put it to work.
- Offer warranties and money-back guarantees that would be costly to honour if the product were poor.
- Invest visibly in site quality, content and photography.
- Show a physical address and phone number.
- Put most effort into signals for unfamiliar brands and hard-to-judge products, where they matter most.
A model from economics, not one measured effect. Website quality raised purchase intentions in experiments.
A signal is believable when it would be costly for a poor-quality seller to send.
A model from economics, reviewed for marketing by Kirmani and Rao: a signal is believable when it would be costly for a poor-quality seller to send. Three experiments found website quality raised perceived product quality and purchase intentions. On Taobao, items whose sellers paid buyers to leave feedback sold nearly 30% more, and such rewards came from better sellers, as the theory predicts.
Four sources, each checked.
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