Nir’s Note: This guest post is by Max Ogles, a writer and entrepreneur based in Utah. Connect with him on Twitter at @maxogles.
In the beginning of 2010, when daily deals site Groupon was really hitting its stride and copycat businesses were popping up left and right, a small startup called Yipit was just getting off the ground. Yipit was involved in daily deals, too, but rather than creating the deals itself, Yipit simply aggregated the deals offered by the other companies to offer a nice tidy list in a daily email.
Like any startup, the Yipit team planned PR and marketing around their launch and hoped that the buzz would yield a nice base of users, who in turn would share with friends and create steady word-of-mouth growth. They managed to secure the spotlight from a major tech publication and then rode the wave. “After months of toiling away in obscurity, you feel like you’ve finally made it,” wrote Vinicius Vacanti, Yipit’s CEO, on his blog. “People know what you’re working on now. People all over the world are now using your product.”
But all of that attention was, in reality, for naught. The end result was an unimpressive 200 active users, much lower than Vacanti expected given the size of the audience that read about the launch. For one exciting day, it seemed like the whole world knew about Yipit–until the following morning, when Vacanti and his team discovered the unfortunate truth about the spotlight: That is, it’s always brighter when you’re in it.
Nir’s Note: An edited version of this essay appeared in The Atlantic. Below is my original.
It’s not often an app has the power to keep someone out of a strip club. But according to Bobby Gruenewald, CEO of YouVersion, that’s exactly what his technology did. Gruenewald says a user of his app walked into a business of ill repute when suddenly, out of the heavens, he received a notification on his phone. “God’s trying to tell me something!,” Gruenewald recalled the user saying, “I just walked into a strip club — and man — the Bible just texted me!”
YouVersion recently announced its app hit a monumental milestone — placing it among a rare strata of technology companies. The app, simply called “Bible,” is now on more than 100 million devices and growing. Gruenewald says a new install occurs every 1.3 seconds.
On average, some 66,000 people have the app open during any given second, but that number climbs much higher at times. Every Sunday, Gruenewald says, preachers around the world tell devotees, “to take out your Bibles or YouVersion app. And, we see a huge spike.”
The app was funded and built by LifeChurch.tv of Edmond, Oklahoma. Though Silicon Valley digerati rarely heed lessons from churches in red states, in this case, Gruenewald and his team have something to preach about.
Imagine walking into a busy mall when someone approaches you with an open hand. “Would you have some coins to take the bus, please?” he asks. But in this case, the person is not a panhandler. The beggar is a PhD.
As part of a French study, researchers wanted to know if they could influence how much money people handed to a total stranger using just a few specially encoded words. They discovered a technique so simple and effective it doubled the amount people gave.
The turn of phrase has been shown to not only increase how much bus fare people give, but was also effective in boosting charitable donations and participation in voluntary surveys. In fact, a recent meta-analysis of 42 studies involving over 22,000 participants concluded that these few words, placed at the end of a request, are a highly-effective way to gain compliance, doubling the likelihood of people saying “yes.”
What were the magic words the researchers discovered? The phrase, “but you are free to accept or refuse.”
The “but you are free” technique demonstrates how we are more likely to be persuaded when our ability to choose is reaffirmed. The effect was observed not only during face-to-face interactions, but also over email. Though the research did not directly look at how products and services might use the technique, the study provides several practical insights for how companies can influence customer behavior.
Interested in boosting customer desire? A classic study reveals an interesting quirk of human behavior that may hold a clue.
In 1975, researchers Worchel, Lee, and Adewole wanted to know how people would value cookies in two identical glass jars. One jar held ten cookies while the other contained just two stragglers. Which cookies would people value more?
Though the cookies and jars were identical, participants valued the ones in the near-empty jar more highly. Scarcity had somehow affected their perception of value.
There are many theories as to why this was the case. For one, scarcity may signal something about the product. If there are less of an item, the thinking goes, it might be because other people know something you don’t. Namely, the cookies in the almost empty jar are the num-numier choice.
It’s About Context
Classical economic theory starts with two key assumptions: First, consumers are armed with “perfect information.” Second, people behave rationally. However, in the real world, these two conditions are more the exception than the rule. In fact, marketers do their best to trigger cognitive quirks, like the scarcity heuristic, to influence behavior.
Even though it may make no objective difference regarding what is actually being sold, marketers know context matters just as much as the product itself. The near-empty jar with just two cookies left in it conveys valuable (albeit irrelevant) information.