150  students completed a simple task and were split into two groups and given either positive or negative feedback on their performance. They were then shown either a one-off print or a mass-produced one and asked how much they’d pay for it.

Those given negative feedback were willing to pay almost 4x more on average for the unique print than those with positive feedback, showing how we use consumption to heal our sense of status.

There are multiple ways to elevate brand status:

‍Form strategic alliances with successful others with whom you share compatible goals (Thorndike, 1920), e.g. Go-Pro and Red Bull.

Develop your core purpose to raise your products’ perceived value (Chernev & Blair, 2015), e.g. Patagonia who “use business to inspire and implement solutions to the environmental crisis.” 

Create and control new ways of promoting industry excellence. Dribbble, a platform for design teams to show off their work provides paid-for "Pro Business" status badges to distinguish the best from the rest.

Invest in a tiered loyalty scheme to elevate consumers’ status & brand attachment (Nunes & Dréze, 2006), e.g. British Airways Executive Club.

There’s a reason this Nugget is #1 in our library.

The concept of Scarcity lies at the core of economics, and greatly influences perceptions of value, status and our competitive desire to attain certain items over others.

Unfortunately, it's also one of the more poorly-applied concepts out there, along with Defaults and Loss Aversion.

‍

Mastering quantity scarcity‍

An airline stating that there's 
“Only 3 seats left” may well be using accurate data and not simply using faux-scarcity to artificially suggest that there's less supply of seats than there actually is.

However, from the user's perspective, the buildup of mistrust around the use of scarcity means cynicism is higher, so one must be careful with information presented.

Similarly, hotel websites telling you that “30 other people are looking at this item” engineer stress to compel people into action without changing supply yet highlighting demand in a manipulative way.

Instead, use quantity scarcity to focus on the craft and high quality of what you're selling.

Make your scarcity feel valuable, not stressful.

‍

Mastering time scarcity

Ensure that any time restriction is highlighted primarily for the purpose of maintaining the quality of your product or service, and not merely to cause stress that could be avoided.

As an example, use time scarcity to launch unique or experimental products that are only available within a particular window (say a week, month or season).

This use of time scarcity is positive and encourages brand exploration, used creatively to highlight your unique value.

There’s a reason this Nugget is #1 in our library.

The concept of Scarcity lies at the core of economics, and greatly influences perceptions of value, status and our competitive desire to attain certain items over others.

Unfortunately, it's also one of the more poorly-applied concepts out there, along with Defaults and Loss Aversion.

‍

Mastering quantity scarcity‍

An airline stating that there's 
“Only 3 seats left” may well be using accurate data and not simply using faux-scarcity to artificially suggest that there's less supply of seats than there actually is.

However, from the user's perspective, the buildup of mistrust around the use of scarcity means cynicism is higher, so one must be careful with information presented.

Similarly, hotel websites telling you that “30 other people are looking at this item” engineer stress to compel people into action without changing supply yet highlighting demand in a manipulative way.

Instead, use quantity scarcity to focus on the craft and high quality of what you're selling.

Make your scarcity feel valuable, not stressful.

‍

Mastering time scarcity

Ensure that any time restriction is highlighted primarily for the purpose of maintaining the quality of your product or service, and not merely to cause stress that could be avoided.

As an example, use time scarcity to launch unique or experimental products that are only available within a particular window (say a week, month or season).

This use of time scarcity is positive and encourages brand exploration, used creatively to highlight your unique value.

146 people were asked to rate identical cookies that were either presented in a jar as scarce or in abundance. They were then asked how likely they would be to want to eat a further cookie.

When scarce, the cookies were rated as more desirable and having a higher value. They were also seen as more valuable when going from an abundant state to scarce than when always scarce.

Scarcity comes in 4 flavors:
Quantity, Time, Access & Rarity.

Control quantity.
‍To increase perceived value of your product, release it in smaller and diminishing quantities, emphasizing its finite nature.

Restrict time.
When the clock is ticking and we’re overwhelmed, we take mental shortcuts that speed up decision-making.

Motivate customers by emphasizing the limited time remaining in which to act.

Limit access.
Restricting access to your products or services will increase desire and perceived value. Do this selectively for certain features and / or customer segments.

For instance, you might want to design valuable, unique rewards that are only unlocked for very special efforts on the part of the customer.

‍

We call Reciprocity the glue that binds us as a society.

No surprise then that it’s a powerful tool to help people make decisions that are both pro-social and a win-win.

When the Behavioural Insights Team were asked by the UK Government to increase the rates of job-seekers turning up to interviews, they applied the principle of Reciprocity to boost rates.

They changed the text message being sent out from:



“You’ve been booked an interview at Tesco on Friday at 10am”

to:

“Dave,
‍

I’ve booked you an interview at Tesco on Friday at 10am. 


Good luck. 


Roxy”

This shift from a passive tone of voice to an active tone, where Roxy had done something kind for you (and you then wanted to reciprocate by turning up), increased attendance from 10% up to a whopping 27%.

We call Reciprocity the glue that binds us as a society.

No surprise then that it’s a powerful tool to help people make decisions that are both pro-social and a win-win.

When the Behavioural Insights Team were asked by the UK Government to increase the rates of job-seekers turning up to interviews, they applied the principle of Reciprocity to boost rates.

They changed the text message being sent out from:



“You’ve been booked an interview at Tesco on Friday at 10am”

to:

“Dave,
‍

I’ve booked you an interview at Tesco on Friday at 10am. 


Good luck. 


Roxy”

This shift from a passive tone of voice to an active tone, where Roxy had done something kind for you (and you then wanted to reciprocate by turning up), increased attendance from 10% up to a whopping 27%.

407 pedestrians in Brittany, France were approached by a young woman and asked to complete a survey. Before the request, half were offered candy and the other half were not.

The results found that people - especially women - were far more likely to reciprocate and answer the survey after receiving a gift than when not.

Act first.‍

Find ways to initiate reciprocity with consumers.  Merely asking those satisfied to go tell their friends will work (Söderlund et al., 2015).

Make it a ‘common habit’.

When we’re told that a behavior is a social norm shared by others, we’re more likely to reciprocate. Households in USA and India consume significantly less electricity when told that their neighbors are consuming less (Sudarshan, 2014). In the long-term, any consistent, successful behaviors will be adopted as the default for others.

Do it in person.

Reciprocation appears to be more powerful when requests from strangers are made face to face rather than online. This is due to the persuasive impact of immediacy that physicality affords, the higher levels of digital suspicion and the sheer number of emails people receive (Meier, 2016).

Information has a wonderful way of looking very different, depending on how it’s communicated.

From turning glasses half empty into those half-full, as Designers, we have a great role to play in using framing to help people see things differently and hopefully, for the better too.

Framing is one of your most powerful behavioral tools. Everything can be reframed, depending on what you want.

For example, online second-hand clothing marketplace Vinted has devised a clever strategy to reframe the commonly-used “Service Fee” as a “Buyer protection fee”.

‍
By reframing it as buyer protection and clearly communicating how this amount is calculated, this assurance goes beyond merely paying for the item.

Now, customers will also feel confident that they’re taking extra steps towards safeguarding their purchase.

Information has a wonderful way of looking very different, depending on how it’s communicated.

From turning glasses half empty into those half-full, as Designers, we have a great role to play in using framing to help people see things differently and hopefully, for the better too.

Framing is one of your most powerful behavioral tools. Everything can be reframed, depending on what you want.

For example, online second-hand clothing marketplace Vinted has devised a clever strategy to reframe the commonly-used “Service Fee” as a “Buyer protection fee”.

‍
By reframing it as buyer protection and clearly communicating how this amount is calculated, this assurance goes beyond merely paying for the item.

Now, customers will also feel confident that they’re taking extra steps towards safeguarding their purchase.

96 people were told they’d be given some ground beef to taste, with half told it’d be  “25% fat” (negative frame) and half told it’d be “75% lean” (positive frame). They were then asked to rate the quality of the beef out of 7.

‍Those presented with a positive frame rated the beef as higher quality than those presented with a negative one.

Create a frame using context, words or imagery to help others  to see things according to your needs. 

Wildly different perceptions are made possible by reframing the same evidence.

Reframe statistics as factually-accurate positives against competitors. 

Facts are dramatically reinterpreted when set amongst different data. 

• Create an opportunity to act.

We’re more likely to take up a special offer when the marketing message is framed as a potential loss than a gain (Gamliel and Herstein, 2012). 

205 people were shown a description of a digital camera printed in a font that was either easy to read (high fluency) or hard (low fluency).

Results found that when easy to read, only 56% delayed choosing the camera, next to 71% when hard. Why? Fluency breeds familiarity, which we value greatly, because it’s unlikely to be harmful (Zajonc, 1968).

Keep it short. Whether for marketing, nudges or political persuading, low syllable, easy-to-conceptualize slogans will feel dramatically more intuitive for consumers. Next to a competing message, they’ll believe the one that’s easier to understand (Schooler & Hertwig, 2005).

Repeat. Repeat. Repeat. The mere act of repeating your message will increase its familiarity, which itself increases the extent to which it’s seen as true (Reber & Schwarz, 1999). Keep it consistent across your team and put it everywhere.

Keep product benefits concise. Consumers actually like a product less the more positive traits they bring to mind (Menon & Raghubir, 2003).  This is because they start to associate your product with greater complexity and lower fluency. 

34 people were split into 3 groups and each told to unscramble a list of either rude, polite or neutral words. After, they were told to see the researcher, who was engaged in a fake discussion with a peer. They were then timed with how long it took before they interrupted.

63% of those primed with rude words interrupted within 10 minutes, compared to only 18% of the polite group.

Prime with words that highlight the positive emotional effect of using your goods or services. For example, Spotify could prime users of its Discover Weekly playlist by using words that highlight its uniqueness or repeat gift-giving benefits.

Combine with images Coca Cola created an advert in Italy called ‘Open the happy can’ that primed potential buyers with a simple smile that was revealed upon opening. This was done in order to create an associative link between happiness and drink consumption, as well as providing a means of positive feedback for the consumer. 

 Keep it subtle. Prime too aggressively and the effect will weaken, or even lead to an unwanted Contrast Effect, where we’ll subconsciously reject and seek out opposites to the prime.

During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments.

Once an anchor is set, other judgements are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor.

For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable, even if they're still higher than what the car is really worth.

Studies have shown that anchoring is very difficult to avoid.

For example, in one study students were given anchors that were obviously wrong. They were asked whether Mahatma Gandhi died before or after age 9, or before or after age 140.

Clearly neither of these anchors are correct, but the two groups still guessed significantly differently (choosing an average age of 50 vs. an average age of 67).

During decision making, anchoring occurs when individuals use an initial piece of information to make subsequent judgments.

Once an anchor is set, other judgements are made by adjusting away from that anchor, and there is a bias toward interpreting other information around the anchor.

For example, the initial price offered for a used car sets the standard for the rest of the negotiations, so that prices lower than the initial price seem more reasonable, even if they're still higher than what the car is really worth.

Studies have shown that anchoring is very difficult to avoid.

For example, in one study students were given anchors that were obviously wrong. They were asked whether Mahatma Gandhi died before or after age 9, or before or after age 140.

Clearly neither of these anchors are correct, but the two groups still guessed significantly differently (choosing an average age of 50 vs. an average age of 67).

Participants were asked to quickly estimate - within 5 seconds -  the answer to one of two same calculations, anchored either low or high.

Those with the low anchor guessed 512 on average, whereas the high guessed a much higher 2,250. The correct answer was 40,320.

Put the highest price first

This will make subsequent prices appear cheaper in comparison and increase sales.

For instance, on the wine list shown, instead of putting the expensive items at the foot of the list, rearrange them in descending price.

Alternatively, if higher, show your competitors' prices first before revealing your comparative value.

Don’t set your anchor price too high

If you do, the natural inclination to anchor other options against this price will diminish.

Be realistic. Keep it within an appropriate region of your other prices in order for your anchors to be effective.

Audience matters.

Anchoring effects  weaken for those with higher cognitive ability (Bergman et al., 2010) and those with prior product-buying experience (Alevy et al., 2011).

77 people were asked to choose between an entirely certain win of $30 and an uncertain 80% chance of winning $45.

78% of people opted for the significantly smaller, certain reward, despite the risk-adjusted payout being higher for the uncertain reward (0.8 * $45 = $36).

Certainty is valued highly.‍

What ways can your business create reassurance or guarantees that make consumers feel safe?  How can you use exclusive certainty to reward and foster a sense of status with your brand?

Stick to your promises!

Letting consumers down, even once, will trigger uncertainty in the quality perceptions of your brand. If making claims about being the best at something, don’t ever give consumers reason to question that and turn a selling point into an unsustainable headache.

Reframe uncertain offers to appear certain.‍

The uncertain frame here requires consumers to calculate proportional savings, but the certain frame removes this by showing certainty of a zero-priced third lemon.

142 people were split into 3 groups and were shown either 72 nouns, abstract words or pictures on a projector for a split-second each, with 5-second pauses in between. They were then asked to recall as many items as possible.

Results showed that those in the picture group recalled far more than either word groups.

Boost your message.

‍Visual ads are remembered better in the long term than verbal ads, especially when we are under greater cognitive load (Childers and Houston, 1984).

What emotional message can you convey more powerfully with a striking, visual metaphor over mere words?

Boost learning by adding in visual references, and not relying solely on text-based language.

This can help broaden understanding across cultures and age ranges.

Where are you trying to change behavior?

What image do you want to stick in peoples’ heads to simplify understanding?

Make product choices distinct.

Images are internalized twice, both visually and verbally (see Dual Code Theory), so they stick in the brain better than just words.

This holds as long as the images aren't abstract or similar to one another (Reder et al, 2006).

So if you sell a large product range that looks similar, consider modifying their design or how they're presented to heighten relative differences and create a more distinct range of choices.

153 New York pedestrians were approached by someone dressed as either a civilian, a milkman or a police officer and were asked to help out a stranger by covering the cost of his / her parked car ticket.

The more authoritarian the uniform, the higher the chance they’d give the money. The civilian succeeded only 33% of the time, whereas the police officer managed 89%.

Determine an authority figure with relative expertise in relation to the group and behavior you’re looking to influence.

Ensure that the individual is credible and trustworthy.

Communicate their authority clearly.

For instance, using authority indicators like “Doctor,” “Judge,” “Award-winning” etc. Complementing this with a suitably-dressed photo of said individual will make any request much more effective.

Add a quotation too to bolster the effect, along with any extra reputational labels they might have (e.g. academic background, specialisms, career duration etc).

Compliance varies depending on demographics.

Older people are more compliant than younger people, for instance. For the young, use culturally-relevant aspirational models to mask authority whilst also nudging desired behavior. 

Faced with a set of options, when we’re not sure what’s the “right” choice, Defaults offer a helpful guide.

They help people avoid expending vast amounts of cognitive energy to decide between what could be a large number of options.

This is especially the case for those who don’t know much about the products or services, where Default options can take away the fear of getting that first decision wrong.

They're also a powerful remedy to any potential Analysis Paralysis, and are particularly helpful when making multiple choices one after the other.

Consider that you’re buying a computer, with a range of possible customisations to various parts.

If there were no default choices set, we’d quickly become overwhelmed with what was the right choice in each step.

If you have complicated product ranges or customisations, are you setting helpful Defaults? If you are, think hard about whether these need improving to reduce effort further.

But also, a word of warning.

Defaults can be terribly misused to force people into decisions that they don’t want.

Take people down the wrong path and you’ll quickly trigger Reactance; an angry feeling where people will want to reclaim their independence, often doing the opposite of what you Default them to.

Ensure that your Defaults have peoples’ own intentions in mind and don’t deviate too far from what people would do of their own choosing.  

What Defaults are you setting? How can these be improved to help smooth out decision-making and guide people to better  outcomes, either for themselves (e.g. helping them save more money) or for the wider group (e.g. defaulting meeting times to 15 minutes instead of 30).

Defaults are set everywhere. They’re powerful and have a big influence on behavior with little effort.

Faced with a set of options, when we’re not sure what’s the “right” choice, Defaults offer a helpful guide.

They help people avoid expending vast amounts of cognitive energy to decide between what could be a large number of options.

This is especially the case for those who don’t know much about the products or services, where Default options can take away the fear of getting that first decision wrong.

They're also a powerful remedy to any potential Analysis Paralysis, and are particularly helpful when making multiple choices one after the other.

Consider that you’re buying a computer, with a range of possible customisations to various parts.

If there were no default choices set, we’d quickly become overwhelmed with what was the right choice in each step.

If you have complicated product ranges or customisations, are you setting helpful Defaults? If you are, think hard about whether these need improving to reduce effort further.

But also, a word of warning.

Defaults can be terribly misused to force people into decisions that they don’t want.

Take people down the wrong path and you’ll quickly trigger Reactance; an angry feeling where people will want to reclaim their independence, often doing the opposite of what you Default them to.

Ensure that your Defaults have peoples’ own intentions in mind and don’t deviate too far from what people would do of their own choosing.  

What Defaults are you setting? How can these be improved to help smooth out decision-making and guide people to better  outcomes, either for themselves (e.g. helping them save more money) or for the wider group (e.g. defaulting meeting times to 15 minutes instead of 30).

Defaults are set everywhere. They’re powerful and have a big influence on behavior with little effort.

161 people were told that they’d just moved to a new US state and that here, the default was (or wasn’t) to be an organ donor. They were then asked to accept or change this donation status.

Results showed that only 42% donated when the default was to opt out, but 82% when defaulted to opt in.

Defaults are powerful. They’re chosen because consumers take mental shortcuts (especially when tired) and because there’s implied trust that they’re the ‘right’ choice. Defaults also act as a reference point against better or worse options. (Dinner et al., 2011). 

Defaults can be set around anything: from the standard package you offer to new subscribers, to the pre-set top-up amount for your mobile wallet, to whether each order of pizza should come with salad. Each default can dramatically affect conversion levels and behavior.

Get the balance. Ensure your defaults feel natural and in line with consumer aspirations. The more extreme the default you set (i.e. defaulting to the most expensive option), the more effort consumers will expend weighing up the cognitive / emotional costs of not choosing the default, impacting their experience and reducing overall trust.

249 supermarket customers were invited to one of two tables, displaying either 24 jams or 6 jams. They were then asked how attractive the jams were and observed as to whether they bought one.

The results found that though customers considered the 24 jams more attractive, they were far more likely to buy when there were only 6 jams to choose from.

Reduce choice difficulty. If customers are time-poor, reduce the number of dimensions along which your products are compared. Present choices in an organised, non-random order, especially with visual layouts. 

Tidy up choice relationships. Highlight one dominant option, align the attributes along which products are compared, and eliminate products from your range that overly complement each other to decrease deferral and increase purchase likelihood.

Adapt to product expertise. Who is your audience? To what extent can they weigh up the benefits of each possible choice? Experts prefer more choice and the lesser-informed crave less.

Build around intent & focus. Intent: are they buying or merely browsing? If browsing, they’re not making a decision, and are less likely to feel overloaded. Focus: a single purchase or a bundle? Bundlers want more options, but Singles want fewer.

129 people were split into 2 groups, with half asked to either write about a time when they felt nostalgic or a neutral event. After writing, everyone was given $5 to distribute between themselves and a random other.

The results showed that on average, neutrals only gave away $1.43, whereas nostalgics gave $2.

Understand what nostalgia means for your target audience. Brands, products and campaign messaging can all gain from referring to the past to loosen our wallets. Nintendo are now rereleasing their 1985 NES console, for example.

Use to promote social behaviour. Since nostalgia causes a reduction in one’s desire for money,  it can instead be used to increase charitable donations or promote participation in a charitable event. 

Digital nostalgia is growing, as our online history of archived experiences deepens. The opportunity to capitalize upon this powerful effect will only increase. e.g. Facebook is now reminding us of our past experiences, using nostalgia to keep us emotionally bound to their network.

40 students were taught a topic and either given the respective homework once instantly or 3 times over the next 3 weeks. They then had an exam a month later.

Those who had the homework spaced out over time performed much better in the exam than those who were asked to do it immediately  after learning.

Spread out the learning.

‍Research shows that spaced repetition is the most robust means of learning but is rarely used by companies. Most knowledge is delivered once and forgotten, wasting money and time. Develop shorter learnings spread over time, using different tools, both digital and physical.

Use it or lose it.

‍Knowledge only sticks when we use it. After reading a book chapter, summarize learnings into bullet points, a list of actions, or even better, become the teacher. Blinkist could send some simple interactive questions after readers have finished a book. Use Slack app QuickQuiz to follow up Lunch & Learns with a Tiny Habit of bite-size questions. 

Make progress trackable.

‍Learnings apps like Duolingo and Memrise create powerful Feedback Loops through points systems, daily goals and leaderboards to create positive reinforcement. Tracking progress gives us a sense of growth and improvement.

11k people were offered a new job that had a 50% chance of doubling income for life, but it wasn't without risk, with an equal chance of it falling by either 20, 33 or 50%. Questioning started with the 33% gamble; if people took it, they were asked if they’d take the bigger 50% gamble too. But if they didn’t, they were asked about the smaller 20% one.

Results put people into four risk categories showing the majority were not willing to take any risk at all.

Focus on an improvement metric. 

We prefer the certainty of what we’re used to, so the benefits of switching to a new product need to feel substantial.

Outline a goal (relative performance, efficiency etc.) to anchor your product strategy around.

Doing so will reduce uncertainty and boost comparisons against better-known, lower risk alternatives.

Offer a trial or free sample...

...to create familiarity and reduce the risk around a new product.

This sets the cost of new product usage at zero, during which the consumer will adjust their future preferences.

Utilize your brand umbrella.

For any new sub-brands, reduce risk by clearly indicating the relationship to existing, familiar brands you own (Erdem, 1998).  

Product brands take note. Risk aversion is higher for material purchases than for experiential ones such as restaurant meals or holidays (Roche et al., 2015).

165 people were told of a printer maker and split into four 'halo' groups (environment, community, customers or employees) and a control. Each group were then told of its extra efforts in these areas and then quizzed about its Corporate Social Responsibility in general.

People assumed the halo groups to be more socially-responsible in unrelated areas, despite no evidence!

Invest in reputation. 

‍Since we take shortcuts when judging brand character, first impressions matter. Where in society, the environment, with customers or with employees can you foster initiatives that will trigger the Halo Effect?

Spend wisely

‍i.e. investing in employee and community relations has been found to more persuasively impact the judgements of corruption prosecutors than promoting diversity or being environmentally friendly (Hong & Liskovich, 2015).

Consider co-branding.

‍Evaluations of new products are heightened by the presence of at least one high-equity brand (Besharat, 2010). Instead of launching a sub-brand, consider partnering with other brands that complement your values or already make CSR efforts that you aspire to.

‍