Psychological Design

New blog, new style

Mark Szulyovszky — Fri, 28 Dec 2012 16:04:53 +0000

I’m gonna resurrect myself in another form, in another style, here:

I’m gonna be honest: it takes me a lot of time to write articles, and I want to really enjoy doing it, and that’s only possible if I can write in a more informal manner. Also, about more personal stuff. I want to share the things I’m working on, and I can’t do it on this blog, since that requires another kind of… structure.

Still, my interests haven’t changed, but more like enriched with the experience I’ve gathered through the last 9 months. It was exciting time, that’s for sure!

See you at ItchingPixels!

Less is more … attractive!

Mark Szulyovszky — Tue, 13 Mar 2012 22:22:31 +0000

Which one tastes better: drinking coke from a large bottle (2,5 L) or from a small one?
Would you care more of your online representation if you got only one like per day from Facebook to spend?
And what if you got only a small portion of food in a restaurant?

How do these limitations effect your experience?

I don’t know whether it’s true for everyone or it is just me, but I love drinking from those small soft drink bottles. And at the same time, I find it quite difficult to value the things that I have a stockpile of…

Let’s call this weird effect the scarcity principle.

This effect comes from the assumption that something is rare because it is popular and everybody wants to get hold of it. And we know that if something is popular, that’s a good indication of its quality.
That’s the same case why you prefer a Porsche more than a Volkswagen, even if they both have the same specifications: mostly because those sport cars are rare. If everybody drove a sport car, I bet nobody would really appreciate them.
I think it is the main reason why so many expensive restaurants only serve a small portion of food. This way they can really make you appreciate the dish you ordered.

So our hypothesis is that if you state or imply that something is rare, it will appear as a more attractive option.
Does it mean the same in real life as it is in social psychology experiments?
In fact, it does. If a buyer in a supermarket was told that the supplier couldn’t produce enough beef, they would give orders for twice as much as others. If they have been told that this information is not yet accessible for others, then they bought five times more of the beef (Knishinsky, 1982).

Marking low inventory items is a common e-commerce practice

By the way, you don’t even have to limit your inventory to exploit the scarcity principle. If you show a fewer number of the same product (for example, on a supermarket shelf), that can increase not only its sales potential, but the price that buyers would pay for it (Worchel, 1975).

What about the one like per day idea?
Do you see any reason why it can be effective? Limiting functionality, quantity or any limitable feature don’t seem to be necessarily a bad idea. Take Twitter for example: 140 characters, and that’s it. That’s what you’ve got to express yourself.
There’s no technical reason to limit the length of the message, this is purely a psychological consideration (and of course it is also necessary to keep the service flowing).
Think about it: how much more time would you spend on Facebook account if you were limited to like only one page per day? In this case, it can become easily a serious decision, a self expression tool people really care about, exactly because in this case “likes” are limited resources.
This is what LinkedIn should do with the skills & expertise feature: limit the number of items one can have at any given time. This would not just clear up the glitter but actually it will make people think about themselves and get more engaged in the process.

Let’s see how this principle works in another context: in the airline ticket ecosystem. What are these companies doing by pricing the demand and the remaining time in to the tickets? They want to ensure that you will be more inclined to buy a ticket as soon as possible because the price you see now is limited by time and it is increasing at an unknown rate. There’s no way to calculate the costs caused by your hesitation.

How does it feel? Are you getting nervous? Do you feel that blood is rushing to your head?

Honestly, I always do.

Eventbrite has a similar technique...

Despite the fact that marketers create a lot of “fake” scarcity to improve sales, this principle also has its upsides: I’m talking about the fact that the scarcity effect also applies to information. For example, it is the reason why censorship is mostly ineffective: people go a long way just to get the banned, scarce information, thus promoting freedom of speech unintentionally.

Next time if you want to ban your child from somebody, keep it in your mind that there is a fat chance you’ll only arouse him or her curiosity more in that person…

Contagious Opinions

Mark Szulyovszky — Tue, 06 Mar 2012 00:16:22 +0000

Can you imagine a scenario where you were asked a question and you chose the obviously wrong answer, just because the others did the same?

Actually, it can happen to you, as well. 75% of the people who participated in Solomon Asch’s 1951 conformity experiment chose the obviously wrong answer at least once during the test.
By hiring actors, he was able to apply peer pressure to the subjects and increase the number of wrong answers from 3% (control group) to 32%, which is quite impressive.

This is what people call the effect of social proof.

Imagine the influence of it under another condition, where the right choice isn’t that obvious… For example, if you’re not sure whether the joke you’ve heard in a sitcom is funny or not.
And then you hear the invisible guys laughing on it in the background. And you automatically start to appreciate the joke that was – originally – mediocre at most.

And this is exactly the same reason why testimonials and reviews also have influence on you: because you are constantly observing what others do. Actually, that’s what you and I have been doing from the moment we were born.
By imitating each other, we learn basic and more advanced skills required in order to survive.

Are we doing it on a conscious level? Sometimes, yes, but as you can see by reading this blog, most of the factors that have influence on your decisions are subconscious. These are shortcuts that we learnt and/or inherited in order to make fast decisions, or decisions at all.
Social proof included.

It is also true for animals. Basically, if you give a rat a marked food to eat, and let another one observe this ritual, then it will prefer the marked food versus a non-marked food. This is completely rational: if the other didn’t die by eating the marked food, why would you want to risk your life taking the other, untested one? (This behavior is called “Socially transmitted preference for food” and if you give it a thought, you will recognize its similarity with advertising.)

The effect of social proof is so extraordinary, that there is even a National Social Norms Institute, where people create public campaigns using only this tool. If you browse through their case studies, you can easily realize how effective their efforts are: they can easily reduce alcohol and tobacco consumption by 30% by stating simply that “Most of us (81%) don’t use tobacco”.

Ridiculously effective and ugly posters

This method should be used if you want to reduce tax evasion, and the only tool you have is a letter you can attach to the tax form. In this case, you should underline the fact that the majority of the taxpayers do not cheat on their tax return.
Also, it can be used in therapies. For example, if your child is afraid of dog, you can help him or her to overcome the fear by watching movies with him, where kids are frequently playing with animals… And that’s coming from an actual study that was conducted by the researcher Robert O’Connor (1972).

On the web, review sites are leveraging our need to gain information about what others think and do. And these sites really have an effect. For example, a one-star rating increase on Yelp (a popular online review site for local services) leads to 5-9% growth in revenue.
However, the same is not necessarily true for IMDB, but for a different reason.

The funny thing is that you can increase the appeal of anything even by making a non-direct suggestion for its popularity. For example, if you write something like “Although we’re flooded with emails, we are trying our best to answer each and every message on time.” on your website, you will notice that more people will write to you.

Okay, I want to show you something. Please have a look at the two pictures below:
Which one do you find more appealing?

So I think you noticed that if your friends “liked” a particular site, you are more persuaded to click on the same button. It’s not a secret: social proof works best if it’s personalized. If you see your friends drinking a new brand of beer, that definitely has more influence on you than watching hundreds of unknowns doing the same (Park, 2001; Stangor et al, 2001).
And we reached the second most important factor that influences the effectiveness of social proof: the quantity. This is true even in a completely artificial environment. It sounds hilarious, but even if you hear five product reviews read by five different synthesised (!) voices instead of one, that would influence you more! (Lee, 2004)
This is the so-called multiple source effect.

Displaying social proof elements on your website is beneficial both for you and your visitors. Actually, there is a cause and effect relationship between the two: It is good for you, because it is beneficial for the popular users on your site, therefore they will spend more time there and attract more people. And the circle keeps repeating itself, which can lead to viral growth in no time.

Nowadays a new way of “acquiring” social proof emerged. I’m talking about the “pay with a tweet” phenomenon. Honestly, I don’t think it is a good idea.
Forcing your users to share your ad or content can lead to rapid growth, something what Zynga experienced a few years ago.
If you are not in the casual-gaming business, but trying to acquire more high-profile users, this method can also be counter-productive. Opinion leaders are well known by their choosiness and they will only promote your brand if your product or service is really good.
And in this case, there’s no need to force them. They will recommend you to others happily, that’s what opinion leaders are known for!

There’s the other side of the coin… Let’s look at my blog.
If you can’t believe your intuition which says that this is a good article, you will look at the number of likes and tweets it has. And if the counter shows a small number of shares, you will be less likely to value it, unfortunately.
But remember, you’re one of the first ones who has read this post, so if that’s really the case, please ignore them and/or click on one of those buttons, if you feel like it!

Ps.: Did you notice that by listing the name of the researchers in brackets, I am using a special kind of social proof to convince you about my point?

Who follows who?

Mark Szulyovszky — Thu, 01 Mar 2012 10:28:54 +0000

Today, I would like to do three short experiments with you:

Please have a look at the picture above.
Can you tell me which line (from the right side) matches the length of the line on the other side?
It seems fairly easy, doesn’t it?
Now, imagine that you’re participating in a group experiment where five people were asked the same question before you, and they all answered the same: the third one.

What’s happening here?
It seems so obvious that only the second one has the same height as the line on the right, but they chose the other one… Strange.
So, your answer is … ?

While you’re thinking about it, here comes the second experiment:
Have you ever noticed how artificial the laugh sounds in sitcoms sometimes?
Can you imagine what the world would sound like without laugh tracks?

Awkward silences, jokes that won’t even make you smile, not laugh!
So, the question is: What makes laugh tracks so irresistibly funny?

The third experiment goes like this:
You are working for the government to reduce tax evasion. You are certain about convincing people not cheat on their tax returns by sending them a letter asking for it.
The team came up with two texts, your job is to choose the one to be sent:

The first one describes all the good things tax paying dollars are spent on, like education, health care, and so on. It ends up with the following sentence: “So when taxpayers do not pay what they owe, the entire community suffers”.
The second one is a short message that emphasises the fact that large majority of the taxpayers file their returns honestly and on time, and only a small percentage of people cheat deliberately.

Which do you think of these letters has the most influence on taxpayers?

Can you find anything in common in these experiments?

Stay tuned for the answers!

Can You Spot a Decoy?

Mark Szulyovszky — Thu, 23 Feb 2012 22:31:48 +0000

What do you think is the least noticeable method to change one’s preference?
The surprising answer is: to include another, seemingly irrelevant choice, that is especially similar to the one before.

Imagine, that to read this article further, you would have to do me a favor. You have two choices:

Pay with a tweet, and read 2 articles.
Invite 5 friends and read 5 articles.

If you want to decide rationally, you have to answer all the following questions:

How much is transforming my twitter feed into a billboard worth?
How much is my friends’ trust worth?

And, most importantly, how much is this article worth at all?
(Probably you don’t even have a clue, because nobody has asked you anything like this before. So you have to rely on the choices I gave you.)

But what if I showed you these options instead?

Pay with a tweet, and read 2 articles.
Invite 3 friends and read 1 article.
Invite 5 friends and read 5 articles.

Now you have two options you can clearly compare with each other.
In consequence, you have one choice that is definitely more attractive than the other – “Invite 5 friends and read 5 articles”. What are the chances that you’ll choose this one?

As you can see, the decoy effect is partially about the ease of comparing choices.
You can easily decide between two options that are similar to each other. But if you have to evaluate choices don’t have much in common, it will take you more time and your decision will be less accurate in general, as there is more room to make calculating errors.
You may ask yourself: “Why don’t you skip the whole painful evaluation process?”.

Therein lies the secret:

If there is a decoy, you don’t have to spend time on evaluating choices that are hard to compare, it is obvious at first sight which option is worth its price.

Even if you know exactly what you want to buy, it could be tempting to choose the (objectively) best offer instead of the one that fits your need more. I was in a similar situation before and so were you, I bet.

The the decoy effect is still dominant if you’re choosing between familiar products. At least this is what various researchers who conducted experiments on this topic found (Ariely & Wallsten, 1995; Josiam, 1995; Colman et al., 2006; Dolye et al, 1999, and so on…). By the way, the existence of this effect is so accepted, that I haven’t found any contradicting research papers. And that’s rare, believe me.

The fast food decoy

Have you ever wondered why fast food chains tend to open restaurants in cluster? They are competing against each other after all, right?
Yes, but using this strategy, they can increase their market share against traditional restaurants. Which one do you dislike the most: McDonalds or KFC?
Nevertheless, it doesn’t really matter, if they are next to each other. You have an easy choice by comparing those two ones in your head and come to the conclusion fast. But what about the traditional restaurant 20 meters away from the fast food duo? You have no idea how much it costs and what quality to expect.
In this case, probably you’ll only visit the real restaurant if you particularly dislike fast food (which is a wise thing in my opinion).

Nevertheless, this is not an artificial phenomenon. For example, you can easily spot the “decoy” option the next time you anticipate in a presidential election. If you want to read more on the political aspects, here you go!

To sum it up, the decoy effect can be implemented in every situation wherever decision making is involved.

So what if you were a web designer?
Do you want your visitors to go and check your best content? Try to link to the same page twice, under two different titles, with one that is more attractive than the other. Do some A/B testing. And don’t forget to be surprised by the results.

Thanks for Gabor Hannák for the input.

Why Too Many Choices Are Good For You

Mark Szulyovszky — Fri, 17 Feb 2012 22:13:53 +0000

This is part two of a two-part article. The title of the first one is “Why Too Many Choices Are Bad For You”. You can read it here!

..Do you really want to research the Internet for a week to be able to make up your mind which HTC smarthpone is right for you from the 12 slightly-different ones?
And although this question is quite manipulative, the answer can be easily “YES!”, if you ask the right person…

And that’s exactly my point. Wide variety of products can appeal to a particular kind of customer: a well-informed one. One who knows what he or she wants exactly.

In his book called “The Long Tail”, Wired editor Christopher Anderson argues that products that have a low sales volume can collectively make up a market share that rivals the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough.
Actually, it’s not an argument, it’s a fact, just have a look at the figures. Probably that’s why we have shops that specializing exclusively in leather gloves, import tea or pesticides – although I, myself don’t understand the need for them.

But it should be taken into account that the appeal of enormous amount of products depends on the context. For example, if you want to order a good bottle of wine at a reasonable price, you won’t get much help by visiting this website:

Mission Fine Wines.com - Just a list of products.

but you’re offered clear recommendations on the other:

WineLibrary.com - It looks a lot better!

Before deciding on the range of products you want to offer, you should consider answering the following question:

Is your typical customer just casual buyer or a savvy shopper, who isn’t ready for any kind of compromise?

I know, “Long tail” is the new “short tail”. But not-so-experienced customers still need guidance.

Let’s try this: If you have 1000 products, choose the ten most popular ones and try to market them. If you have 10, choose one. If you promote just that one more intensively, you’ll avoid a lot of confusion on your customers’ side, but you still give a chance for the experts to find exactly the product they need. Because that’s an important market segment as well.

In case you are not confused enough, I summarized my recommendations here:

Showing too many products without any guidance can be paralyzing for your customer. That’s not a good idea. Even if you run a shop where you sell only 27-inch monitors, you’ll still come across customers who don’t have the faintest idea about it.
Giving clear recommendations, product descriptions and distinctive looks to your product range is mandatory these days.
Increase the complexity that consumers face gradually. If you have a chance, create only a few base products and let them customize it by adding or upgrading different parts. And don’t forget to set up smart defaults for your average customer.
Are you launching an unusual, new product line where everybody is expected to be unfamiliar with? Limit their choices, don’t get them confused and don’t let them spend time on trying to select from a lot of unknown products.

Why Too Many Choices Are Bad for You

Mark Szulyovszky — Wed, 15 Feb 2012 21:22:59 +0000

This is part one of a two-part article. The title of the second one is “Why too many choices are good for you”.

One of the most famous psychology experiment happened almost ten years ago in a British supermarket.
Sheena Iyengar and her colleagues set up a small tasting booth, where they either offered 6 or 24 different kinds of jam. What they first found is that only 40% of the people stepped to the booth when there were only 6 jars of jam on the table, compared to the 60% result in the other case.
Now, here comes the surprising fact: only 3% of the customers who “dropped by” to taste the 24 different kinds of jam actually bought something, compared to the astonishing 30% who were offered the less amount of choices.

That’s a ten time increase produced only by limiting the options presented to the customer.

Imagine the scenario where you want to buy a 27- inch monitor, because you had enough of the old, giant-size CRT display that you have now.
You visit your favorite electronic store (virtually, of course) and finally count up exactly 1117 monitors that you can choose from.

This is what a search for a 27 inch monitor on Amazon looks like

It’s not an easy job to choose the “one”, probably, it will take you a long night at least.

How do you feel about that? Are you engaged? Do you think you can really, objectively select the best one for your budget without spending enormous amount of time on it?

Will you be satisfied with your choice, or right after unpacking your new display, you’ll immediately start to think “ohh, that LG monitor looked so much better, why exactly did I choose this one?”.

Keeping the choices down to minimal can be part of a branding strategy.
Let’s compare Apple to HTC. HTC rolls out a new phone every other month, there’s nothing to wait for, basically you’re flooded with information.
And what does Apple do? They release a new version of the same phone every year.

Do you really want to research the internet for a week to be able to make up your mind which HTC smarthpone is right for you from the 12 slightly-different ones?
And although this question is quite manipulative, the answer can be easily “YES!”, if you ask the right person.

The work of Sheena Iyengar and her collegaues was criticized a lot in the recent years, although these articles didn’t attract the kind of publicity that the original research gained.

Okay, now you’ll start thinking that I’m gonna contradict myself at the end of the article - but you are wrong.
I will do it in my next blog post!

Dripping Their Way to a Huge Bill

Mark Szulyovszky — Sun, 12 Feb 2012 18:42:37 +0000

Ever wonder how can you end up paying four times as much for a low-cost airplane ticket as it was advertised?

Let me introduce you to the dark secrets of drip pricing, which is basically nothing more than adding surcharges at the cashier that wasn’t mentioned before…

Is it really effective? It must be, as the Office of Fair Trading (UK) labels it as the most dangerous pricing strategy around. In their report, participants say that they still bought the product or service after they found out of the additional charges, even though it seemed unfair and manipulative.
What do you do if you encounter this “dirty trick”? Do you still continue with the checkout process or do you abandon your purchase?
But you have already decided to buy the product, it feels like it’s yours already!

“This is the last additional $10 I have to pay to accomplish my dream and travel to Barcelona!”

The other side of the coin.
Many scientific experiments reported that customers feel higher perceived value and purchase intentions (Burman & Biswas, 2007), higher price satisfaction (Xia & Monroe, 2004) and lower recalled price (Morwitz et al, 1998; Lee & Han, 2002). However, the OFT report seems to disagree with the previous statements. For a reason.

Drip pricing in action!

Drip pricing can also have positive effects. Nevertheless, they are dominant only if companies use it for some extent, not like low-cost airlines do. Showing a 20 Euro price tag for a flight ticket from Budapest to London is neither acceptable nor fair if the customer has to pay 10 Euros just for processing the transaction with a credit card.
This is of course still a bargain compared to what normal airlines charge and that is the reason why they can get away with it.

It depends on…
In general, as long as it is perceived as fair and reasonable, additional charges can be more attractive in the eyes of the customers. Showing a small surcharge (max. 6%) and the reduced price instead of the full price can lead to higher purchase intentions and perceived value (Xia & Monroe, 2004).
Even if the original price + VAT is shown instead of the actual price in a supermarket, it can generate increased revenue (Ray Chetty et al, 2009). And surprisingly, if you’re one of the customers in that shop (or in general, if you encounter drip pricing), you’ll be likely to recall the bill approximately 8% less than the amount you have actually spent there (Lee & Han, 2002).

Charging additional costs for a service provided by a third party seems quite legit and ethical, so it could be a good tip for those who can’t live without drip pricing strategies. That’s why low-cost airlines add airport fees and taxes to the unrealistically cheap flight tickets separately.

The answer to the question: “Is there any way using drip pricing ethically?” depends on what extend you are using it.
Charging $5 “administration fee” for buying a $2 postcard could be the worst idea in pricing history. On the contrary, adding an opt-out extra service for $5 to the cart that most of your customers need is fair and won’t hurt your reputation.

Drip pricing on amazon.com

Conditional drip pricing is also a widely used technique, Amazon does it the right way.
Want to be eligible to the free shipping offer? Buy another book, get your order above the $25 threshold and enjoy our free service! And we don’t leave you alone with the choice, but provide many recommendations what kind of books you would like to read.

That’s what smart e-commerce looks like.

What is Psychological Design?

Mark Szulyovszky — Thu, 09 Feb 2012 21:11:31 +0000

Some people call it user experience design, while others persuasion, but I think these terms do not cover the field that I’m deeply interested in.

As we have already learnt from Douglas Adams; the holistic approach is the most efficient way to solve a crime. In my case, I want to be the detective who investigates the kept secrets of “psychological design”. It may seem a scaringly interdisciplinary thing that unites marketing, interaction design, user experience design, graphic design and behavioral economics to solve THE riddle:

How to make products and services more pleasurable for the customer and more profitable for the company at the same time.

To sum it up, we can say that psychological design is the ergonomic approach towards communication and everything related.

Have a good read!