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 (more…)
Interested in boosting customer desire? A classic study that demonstrates the psychology of scarcity 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.
Nir’s Note: This post is a little different from my normal writing. For one, its much shorter. You’ll notice I provide fewer citations and the ideas are less developed than my previous essays. This is intentional and I need your help. I’m considering writing a chapter on this topic in a forthcoming book but wanted to test the ideas with my most loyal readers first. Give it a quick read and tell me what you think. —
Habits are good for business. In fact, many industries could not survive without them. The incentive systems and business models of the companies that make habit-forming products require someone gets hooked. Without consumer habits, these habit-forming businesses would go bust.
While most of us think of cigarettes or gambling as habit-forming products, the fact is, (more…)
Not more than 10 days after it launched, the MessageMe chat app company happily announced it had grown to 1 million users. The revelation captured the attention of envious app makers throughout Silicon Valley, all of whom are searching for the secrets of customer acquisition like it’s the fountain of youth. “Growth hacking” has become the latest buzzword, as investors like Paul Graham profess it’s functionally that matters.
Clearly, everyone wants growth. To someone creating a new technology, nothing feels better than (more…)
Note: I’m pleased to have co-authored this post with Sangeet Paul Choudary, who analyzes business models for network businesses at Platformed.info. Follow Sangeet on Twitter at @sanguit.
If there is one altar at which Silicon Valley worships, it is the shrine of the holy network effect. Its mystical powers (more…)
