Certainty Effect

We crave clarity over chance and make costly sacrifices to get it

Guaranteed inferior gains are valued over superior ones that have some risk. When faced with uncertain times, certainty is a feeling that we place a premium on.

Kahneman & Tversky (1981). The Framing of decisions and the psychology of choice. Science. 211 (4481): 453–458.

The study

Setup

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

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Results

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).

np_read_2490885_000000

In detail

Key Takeaways

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.

Certainty Effect

We crave clarity over chance and make costly sacrifices to get it

Guaranteed inferior gains are valued over superior ones that have some risk. When faced with uncertain times, certainty is a feeling that we place a premium on.

Kahneman & Tversky (1981). The Framing of decisions and the psychology of choice. Science. 211 (4481): 453–458.

The study

Setup

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

Results

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).

Key Takeaways

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.

Certainty Effect

We crave clarity over chance and make costly sacrifices to get it

Guaranteed inferior gains are valued over superior ones that have some risk. When faced with uncertain times, certainty is a feeling that we place a premium on.

The study

Setup

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

Results

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).

np_read_2490885_000000

In detail

Pairings

Experience

Encourage product migration by creating parallel experiences

If you're undergoing a significant version change in the product or system your users work with, run the current and new versions in parallel for a while.

Default to the current, offering low risk, bite-size ways to dip into and explore the new version.

Be clear about the date at which the user will be defaulted to the new version.

Provide ample time for incremental exploration (measured in months, subject to the size of the change). Once the user has been defaulted to the new, maintain provision of access to the old for a time, to increase certainty further.

Finally, provide a clear date by which the old will no longer be accessed.

What significant systematic changes are you anticipating for your users? Where can you reassure them with a smooth migration process that reduces stress and, ideally, reinforces the value of the new?

Loyalty

Offer a mix of constant and changing choices

In our product choices, we humans crave a complex mix of familiarity and newness. We know what we like, but we're also keen to seek out new experiences. Brands should embrace this, offering a small range of product choices that are either immovable, or variable.

UK eatery Honest Burgers do a great job here, providing a small number of always-on-the-menu burger options alongside other burgers that change by month or by store location.

Where can you provide this mix in the product choices you present to users? First, define what products or features should *never* change.

Second, how you can encourage curiosity and exploration with new ideas, driven by cross-brand collaboration, season or a new technology or ingredient, for instance?

Reassure with a small future promise

If you sell products that are sometimes unavailable, the sense of loss and missed experience that results from the potential buyer can leave them feeling disappointed. Consider offering some mitigating future certainty to allow them to overcome their pain. Supermarket chain Tesco do this for out-of-stock items, putting on the label the specific date that the product will be back on the shelf.

In what way can you prevent the Fear Of Missing Out by providing future certainty that people can feel reassured by? Going further, they may be willing to pay more for such certainty, having already lost out once before.

Conversion

Reduce Risk Aversion with Certainty

The future’s inherently uncertain and we’re always looking for clarity.

How can you relieve discomfort by offering a degree of certainty?

Connected to

Running workshops?

Certainty Effect

is included in Box One of our physical workshop tool.
is included in Box Two of our physical workshop tool.
Box One