Psychological Principles - Amazon S3 · All material © THE WEB PSYCHOLOGIST LTD. 2015. No unauthorised reproduction or distribution. THE WEB PSYCHOLOGIST LTD. @NATHALIENAHAI NATHALIE

All material © THE WEB PSYCHOLOGIST LTD. 2015. No unauthorised reproduction or distribution.

@NATHALIENAHAI THE WEB PSYCHOLOGIST LTD.

Psychological Principles

5 OF





NATHALIE NAHAI

@NathalieNahai

TheWebPsychologist.com



ENDOWED PROGRESS

1



THE RESEARCH

Nunes, J. C., & Drèze, X. (2006). The endowed progress effect: How artificial advancement increases effort. Journal of Consumer Research, 32(4), 504-512.

Randomly distributed 300 loyalty cards to customers at a car wash

1



HALF GOT THIS


1

Collect 8 stamps, get 1 FREE car wash



THE OTHER HALF GOT THIS


1




1

Which had the highest redemption rate?



8 STAMPS?


1




10 STAMPS?


1




RESULTS

19%

34%

8 stamps 10 stamps

Redemptio

n ra

te

1



RESULTS

19%

34%

8 stamps 10 stamps

Redemptio

n ra

te

1



WHAT HAPPENED?


Task requiring 8 steps

1



WHAT HAPPENED?




(2 completed)

1



WHAT HAPPENED?

Reframed the task so one was perceived as undertaken & incomplete

(rather than not yet begun)


1



http://www.londonreal.tv/

1



How does it work?



ENDOWED PROGRESS

1



1

People provided with artificial advancement toward a goal exhibit greater persistence

toward reaching that goal “ ” Nunes, J. C., & Drèze, X. (2006). The endowed progress effect: How artificial advancement increases effort. Journal of Consumer Research, 32(4), 504-512.



CONSISTENCY

We’re naturally motivated to complete tasks we’ve started & want to remain consistent with previous intentions

Fox, S. & Hoffman, M. (2002). Escalation Behavior as a Specific Case of Goal-Directed Activity: A Persistence Paradigm. Basic and Applied Social Psychology, 24 (4), 273-285.

1



PROXIMITY

The closer we are to completing a goal the more likely we are to increase our efforts

to close the last little gap

Hull, C. L. (1932). The goal-gradient hypothesis and maze learning. Psychological Review, 39(1), 25.

1



TRIGGERS

Giving people a couple of free holes on a punch card is enough to trigger both of these effects

1



WHY IT’S USEFUL

•  Increases the likelihood of task completion


1



WHY IT’S USEFUL


•  Decreases completion time


1



WHY IT’S USEFUL


•  Decreases completion time

•  Effect depends on perception of task completion rather than a desire to avoid wasting the endowed progress


1



&



IN REALITY

Kahneman, D., & Tversky, A. (1984). Choices, values, and frames. American Psychologist, 39(4), 341.

1

“ ” Losses loom larger than gains



THIS MEANS

Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. The Journal Of Economic Perspectives, 193-206.

We feel a greater loss over something we own than something we haven’t yet bought

1



1



This also works in gaming



Sunk-cost fallacy

2



GAMING

Players are more likely to return to look after items they have been endowed (paid for / earned)

than goods they have simply been given

Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. The Journal Of Economic Perspectives, 193-206.

2



SUNK-COST FALLACY

Rational player:

Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior And Human Decision Processes, 35(1), 124-140. Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica: Journal of the Econometric Society, 263-291.

2



SUNK-COST FALLACY

Rational player: would ignore sunk-costs


2



SUNK-COST FALLACY


Real player:


2



SUNK-COST FALLACY


Real player: reluctant to discontinue an activity once they’ve already put effort in


2



Which is why this works



https://www.facebook.com/FarmVille

2



SUNK-COST FALLACY


The sunk-cost of planting the tomatoes increases your desire to continue the game

2



This gives rise to yet another dynamic…



Appointment dynamic

3



APPOINTMENT DYNAMIC

http://badgeville.com/wiki/Game_Mechanics/Appointments

At a predetermined time / place user must login or participate in the game for positive effect

3



APPOINTMENT DYNAMIC

This keeps the customer coming back for more, creating a habitual pattern of use

3



How these work together



Endowed progress Customer is helped to begin




Consistency Initial intention fuels desire to

complete





complete

Sunk-cost fallacy Encourages further investment




Appointment dynamic Habitual use is reinforced


complete

Sunk-cost fallacy Encourages further investment



HOW TO USE IT

•  Research what motivates your users



HOW TO USE IT


•  Give relevant initial progress for free (e.g. points, upgrade, virtual currency / product)



HOW TO USE IT


•  Give relevant initial progress for free (e.g. points, upgrade, virtual currency / product)

•  Use these principles to create a user journey that encourages completion



Opportunity cost

4



4

Imagine I give you $100 to spend as you like



4

Which of the following would you choose?



1  You buy some clothes

4




2  You take your friends out for drinks

4





3  You save it for a rainy day

4






4






4



HOW DID YOU DECIDE? 4

Resources are limited



HOW DID YOU DECIDE?

You probably weighed up the value of each alternative and made a decision

4



So, the principle…



Opportunity cost

4



4

Benefits forgone by particular use of resources “ ”

Palmer, S., & Raftery, J. (1999). Economics notes: Opportunity cost. BMJ: British Medical Journal, 318(7197), 1551.



4

What you’re giving up by making that particular choice



How does it work?



THREE MAIN COSTS

1  Attention

4



THREE MAIN COSTS

1  Attention

2  Time

4



THREE MAIN COSTS

1  Attention

2  Time

3  Money

4



1 – COST OF ATTENTION



ATTENTION 4.1

Attention is limited, increasingly

fragmented & highly valued



So how do you grab & hold attention?



4.1

ATTENTION

Trigger an emotional / arousal response



4.1



4.1

ATTENTION

Serve a fundamental human need



4.1

ATTENTION



ATTENTION 4.1

Create a compelling cycle of variable rewards



4.1



2 – COST OF TIME



When do you typically use the following products?

4.2



4.2

And why?



4.2



4.2



You have to minimize TIME costs



MINIMIZE TIME COSTS

Do this by understanding:

4.2



MINIMIZE TIME COSTS

Do this by understanding: •  Your customers’ incentives for using it

4.2



INTERNET (APP) USE

Nielsen (2014). Tech-or-treat: Consumers are sweet on mobile apps, Q3 2014 Report. http://acnielsen.Co.Uk/us/en/insights/news/2014/tech-or-treat-consumers-are-sweet-on-mobile-apps.Html

4.2



MINIMIZE TIME COSTS


•  Their usage patterns

4.2



4.2



4.2



MINIMIZE TIME COSTS


•  Their usage patterns

•  How to target specific ‘time packets’

4.2



4.2



4.2



4.2



3 – COST OF MONEY



How do these products reduce the perceived cost of paying?

4.3



4.3



4.3



4.3



4.3



FREEMIUM

BetaBlog (2011). Roger Dickey's Tactics for Game Monetization: http://www.gamasutra.com/blogs/BetableBlog/20111129/90708/Roger_Dickeys_Tactics_for_Game_Monetization.php

They create ‘fun pain’ by making us wait in real time (e.g. for our city / fortress to be built)

4.3



FREEMIUM

In Sim City, to solve this pain we need to buy ‘bliss’… But how do we value ‘bliss’?

4.3



4 4.3



FREEMIUM

We can’t

Instead we have to buy gems (intermediate

currency) in exchange for ‘bliss’

4 4.3



FREEMIUM

Adding just one intermediate currency between consumers and real money reduces our ability

to assess the value of the transaction

Gabaix, X., & Laibson, D. (2004). Shrouded attributes and information suppression in competitive markets. National Bureau of Economic Research.

4 4.3



FREEMIUM

Allowing people to earn currency (albeit very slowly) and offering bulk discounts

cloaks the true cost of playing

4 4.3



So, to reduce perceived cost of MONEY…



HOW TO DO IT

•  There has to be ‘fun pain’ (e.g. waiting)

4 4.3



HOW TO DO IT


•  Use an intermediate currency

4.3



HOW TO DO IT


•  Use an intermediate currency

•  Allow people to earn currency (albeit very slowly) and offer bulk discounts

4.3



Hedonic adaptation

5



THE RESEARCH

Nelson, L. D., & Meyvis, T. (2008). Interrupted consumption: Disrupting adaptation to hedonic experiences. Journal of Marketing Research, 45(6), 654-664.

Group A

180 second massage (total: 3 mins)

5



THE RESEARCH


Group B

80 second massage 20 second break 80 seconds (total: 2 mins 40 secs)

5



Which group do you think would report higher satisfaction, and

be willing to pay more for it?

5



THE RESEARCH


Group A

180 second massage (total: 3 mins)

5



THE RESEARCH


Group B

80 second massage 20 second break 80 seconds (total: 2 mins 40 secs)

5



Group B

(the ones who had a shorter massage & took a break)

5



5

Why?



Short break stymied their adaptation to the pleasurable event and ‘reset’

their appreciation for it

5



THE RESEARCH

Same effect for unpleasant experiences


5



THE RESEARCH

Same effect for unpleasant experiences If you take a break, it sucks more


5



This is why bad smells fade the longer you’re exposed to them

5



It’s the same thing with products



5



5



5



HEDONIC ADAPTATION 5



HEDONIC ADAPTATION 5



How does it work?



Hedonic adaptation

5



5

“ ” Lyubomirsky, S. (2011). Hedonic adaptation to positive and negative experiences. Oxford handbook of stress, health, and coping, 200-224.

People become accustomed

to a positive or negative stimulus… emotional effects of that stimulus

are attenuated over time



5

Over time, we become de-sensitized or bored of the same thing (features,

concepts, rewards)



So how do we use it?



HOW TO USE IT

•  Update your product frequently

5



HOW TO USE IT


•  Change the layout / structure

5



HOW TO USE IT



•  Alter the user experience

5



HOW TO USE IT



•  Alter the user experience

•  Make the rewards unpredictable

5



KEY TAKEAWAYS



KEY TAKEAWAYS

You have to understand the

psychological triggers, biases & motivations that drive your customers



KEY TAKEAWAYS

1  Endowed progress



KEY TAKEAWAYS


2  Sunk-cost fallacy



KEY TAKEAWAYS



3  Appointment dynamic



KEY TAKEAWAYS




4  Opportunity Cost



KEY TAKEAWAYS




4  Opportunity Cost

5  Hedonic adaptation



There’s one crucial point we often forget…

BUT



WE ARE ALL THE USER



PERSUASION CONTINUUM




Facilitation




Facilitation

Coercion




Facilitation Persuasion

Coercion Manipulation



INTENTION

The difference between persuasion and manipulation is intent

Robin Dreeke, Head of the Behavioural Analysis Unit, FBI

“ ”



Facilitation Persuasion

Coercion Manipulation

Intent

WHERE DO YOU SIT?



THE SILVER RULE

Do not do unto others what you would not have them do unto you

Hillel the Elder in Talmud: Shabbat 31a

“ ”



As designers…



You are both the

ARCHITECTS & THE USERS of our future tech



WHAT KIND OF WORLD do you want to build?



WEBS OF INFLUENCE THE PSYCHOLOGY OF ONLINE PERSUASION

bit.ly/websofinfluence



DOWNLOAD THE SLIDES

bit.ly/mtp_persuasion



Get in touch.

ANY QUESTIONS?

@NathalieNahai

TheWebPsychologist.com



REFERENCES & FURTHER READING

1  Meyer, R. (2014). Everything We Know About Facebook's Secret Mood Manipulation Experiment. The Atlantic, June 28th: http://www.theatlantic.com/technology/archive/2014/06/everything-we-know-about-facebooks-secret-mood-manipulation-experiment/373648/

2  Horn, L. Study Finds Chemical Reason Behind Facebook 'Addiction'. PC Mag (2012). Available from http://www.pcmag.com/article2/0,2817,2400011,00.asp (retrieved 17th February 2015)

3  Przybylski, A. K., Murayama, K., DeHaan, C. R., & Gladwell, V. (2013). Motivational, emotional, and behavioral correlates of fear of missing out. Computers in Human Behavior, 29(4), 1841-1848.

4  Muise, A., Christofides, E., & Desmarais, S. (2009). More information than you ever wanted: Does Facebook bring out the green-eyed monster of jealousy? CyberPsychology & Behavior, 12(4), 441-444.

5  Przybylski, A. K., & Weinstein, N. (2013). Can you connect with me now? How the presence of mobile communication technology influences face-to-face conversation quality. Journal of Social and Personal Relationships, 30(3), 237-246.

6  Bavelier, D., Green, C. S., & Dye, M. W. (2010). Children, wired: for better and for worse. Neuron, 67(5), 692-701

7  Harris Interactive (2013). Mobile Consumer Habits Study. Available from: http://pages.jumio.com/rs/jumio/images/Jumio%20-%20Mobile%20Consumer%20Habits%20Study-2.pdf (retrieved 13th March 2015)



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Psychological Principles - Amazon S3 · All material © THE WEB PSYCHOLOGIST LTD. 2015. No unauthorised reproduction or distribution. THE WEB PSYCHOLOGIST LTD. @NATHALIENAHAI NATHALIE