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.

However, be careful how you do this.

For instance, an airline stating that there's 

“Only 3 seats left” just be using accurate data and not simply using faux-scarcity to artificially suggest that there is less supply of seats than there actually is.

Simiarly, hotel websites telling you that “30 other people are looking at this item” engineer stress to compel people into action without changing quantity, but only highlighting demand in a manipulative way.Use quantity scarcity to focus on the craft and quality of what you're selling.

Make your scarcity valuable, not stressful.

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.

However, 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 scarcity is positive and encourages brand exploration.

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.

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32 dog-phobic children were split into 3 groups and shown 8 videos of either one child playing with a dog,  many children with different dogs or no dogs, and then asked to interact with a dog themselves.

Those who watched another child play with a dog performed far better. Those who watched many children also kept this up a month later.

Provide mental shortcuts through the judgements of others; the more people, the more persuasive.  First-time consumers of your product will benefit the most from this approach. 

Persuade with similarity. We're most influenced by those who we deem similar to ourselves. Communicate characteristics relevant to that segment, such as proximity, gender / age, profession or social class to successfully direct behavior. 

Use role-models. Understand the emotional drivers of your audience and seek out positive, aspirational individuals to direct specific consumer decisions and reinforce behaviors.

Prospect theory is explained with a graph. Negative losses and positive gains recorded on the horizontal are set against a vertical intensity of feeling for those losses or gains.

As we gain more, we feel less for each gain. In contrast, even a small pain (shown in red) feels a lot more negative than an equal-sized gain feels good.

Package pain. Consumers will feel less overall pain from any costs incurred when you package and deliver them all together rather than when they're felt as separate, smaller pains.

Spread out rewards. Instead of offering larger, chunkier benefits to consumers, break these down into smaller pieces, spreading them out across time. $10 given 4 times feels more valuable overall than $40 given once.

Offer mixed product bundles. We feel less good with each thing we consume. Therefore, the first can of soda tastes better than the fourth. This means we'd get more complimentary value from a bag of chips instead. Look for ways to offer relevant, mixed product bundles to offset diminishing consumer sensitivity.

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).

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 a fear of missing out. 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). 

150 teachers  in Chicago were either offered a cash incentive up front or after their students’ math test, with better results leading to more money. Subject to results, the money-up-front group would suffer deductions for unmet targets to create a feeling of loss aversion.

Teachers receiving  money up front were found to have much better results than those rewarded at the end.

Increase conversion with trial offers. Though some consumers might not be willing to pay the market price for your product, they may pay the market price to avoid it being taken away.

Offer delayed payments to shift consumers’ judgements from paying to get the product to paying to avoid losing it. For instance, a month delay in paying subscription fees. This means that any extra budgetary cost is then re-estimated as a question of how it can be fitted into an existing budget.

Replace faulty products immediately with an identical or superior model (Novemsky & Kahneman, 2005). Doing it quickly will limit the pain of loss aversion, which builds over time (Strahilevitz and Loewenstein, 1998).

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.

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 your highest price first in a list to 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. 

Don’t set your anchor price too high or the natural inclination to anchor other options against this price will diminish. Be realistic and keep it within an appropriate region of your other prices.

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).

2,064 male students from 9 schools in Chicago were enrolled in a two-year-long program that encouraged system-two slow thinking on how to manage situations of conflict.

Participation in the program reduced total arrests by 35% and violent crime arrests by 50%.

Add a little friction. ‍

We constantly weigh up effort vs rewards, so seeing one long sign-up form can lead us to make a fast system-one decision not to do so.

A process that’s Chunked, features reflective Goal Primes and clearly shows the product benefits will work better. 

Provide warnings for damaging decisions.

Instagram have launched "comment warning", live-analysing a comment and notifying of potential offense, without removing the Autonomy to post. This allows for reflection and avoids Reactance.

Build in reflective periods for big decisions.

Knee-jerk, short-term decisions can harm our longer-term goals. E.g., financial firms can help us make smarter decisions about withdrawing all our savings by building in a reflective delay, especially when such decisions conflict with our prior Commitments and goals.

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23,946 cafe hot drink sales were studied over 14 weeks. For the last 4 weeks, customers were shown a sign stating that “guests are changing their behavior and more and more are switching from the to-go cup to a sustainable alternative. Take part in this: choose a sustainable cup and help to protect the environment.”

Results showed that customers used 17.3% more reusable mugs over to-go cups after dynamic nudging.

Drive change by showing relative growth.

‍New behaviors tend to start small, so stating absolute percentages isn’t persuasive. Instead, reframe the change as a dynamic movement increasing over time to create a means to 'pre-conform' with this inevitable future (Sparkman & Walton, 2017).

Bolster with the 25% Rule...

...where new behaviors tend to become the norm once at least a quarter of a group adopt them. Boost change success by recruiting a group of change-makers to create, broadcast and maintain this initial effort.

Combine existing financial nudges with dynamic norms.

‍The cafe in the study was already charging €0.10 for a takeaway cup but they were able to improve behavior even further with this cheap, efficient and new nudging method...and so can you.

Over 10 days, millions of people using online ticket marketplace Stubhub were put into two groups, where 15% ticket fees were either made salient up front during ticket browsing, or hidden until checkout.

Results found that for those with delayed salience of the fee, revenue increased by 21%, with a quarter of this due to higher priced tickets being bought.

What is seen is what is done

Surfacing key information in a timely fashion can prompt us to do more of what we aspire to. For instance, Amazon have redesigned their Kindle so that when it's not in use, the screensaver becomes the cover of the book you're currently reading. This acts as a salient reminder to read as one notices the Kindle throughout the day. We can use the same approach to boost healthy eating, having a bowl of fruit on the kitchen table over one filled with salty cashews. What do you want users to do more of? How do you want them to feel? What unique or delightful features can you surface that will help inspire action and make Tiny Habits that much more likely to form?

More knowledge isn't necessarily better

There's a trade-off between what's presented to us now and making good decisions for our future. For instance, cryptocurrency exchange Coinbase choose to omit the % gained or lost from one's investments. Research shows that if they instead showed this, people may incorrectly sell coins that have increased in value, while keeping coins that have dropped in value, known as the Disposition Effect.

Differentiate by removing information

Whereas knowledge can be power, it can also demotivate. For example, weight loss scales Shapa does away with the number telling you how much you weigh, instead providing 5 colour bands denoting averaged performance. Omitting the number shifts us away from short term fluctuations in weight that can lead to feelings of failure causing us to give up. What information or options could you hide that could otherwise lead users to short term or harmful outcomes? What can you remove that could confuse or overwhelm?

Delayed salience can trigger shock

Also consider the ethical implications of hiding key information, as in the study above. In this case, any reactance felt will be relative to the proportion of the extra fees incurred, customer expectations, industry norms and how frequent the transaction is. Hidden fees on more regular transactions like grocery shopping will be subject to higher levels of reactance than one-offs like a car purchase. There is an art to surfacing such painful information at the correct time in order to generate a sale. Try adding an explanation of why the fee exists to reduce drop-off, like Airbnb do.