The Small BIG: Small Changes That Spark Big Influence (20 page)

W
hether you’re persuading customers to buy your products, clients to hire your advisory services, or colleagues to support your new initiatives, if you’re like most people, you’ll agree that the job tends to be a whole lot easier not only when you have a strong case to make, but also when the case you are making shows a clear price advantage, too.

But sometimes, even when we have the best combination of product and price, our attempts still fail. There are several potential reasons why this occurs, but one of the more important ones concerns a common error that people in an advantageous position often make. Fortunately, communicators who are aware of this error not only are in a better position to avoid it, but can also—by making a small change to their message—significantly increase their advantage over rival communicators at the same time.

The common error we are talking about is a tendency for people to fail to consider what economists call the “opportunity cost” of a decision. The opportunity cost of a decision is simply the potential direct benefits people could have received had they made an alternative choice. For example, imagine that you decide to go to the gym on the way to work tomorrow morning. The opportunity cost of that decision is what you will give up—in this case, an extra hour snoozing in bed. When it comes to persuasion, the mistake often made by communicators is to assume that their targets of influence (e.g., the people whom they are trying to persuade) will automatically consider their own opportunity costs when making decisions. For example, imagine that you are selling a product that is not only of a good standard, but also less costly than a similar product sold by a competitor. As the seller, it is easy to assume that your potential customers will instantly recognize the savings they can make and, by appropriately weighing the cost differential, decide that your option is the one they should choose.

But research conducted by consumer behavior researcher Shane Frederick and his colleagues suggests that people don’t weigh this information nearly as much as you would expect them to. And when that happens what you might consider to be your biggest competitive advantage can potentially turn out to be a nonfactor if you fail to take small steps to be more proactive in your approach.

On the face of things, it sounds obvious that decision makers would strongly consider factors like the opportunity costs of choosing Option A over the less expensive Option B. It seems like a no-brainer that when making a decision, people would realize that spending $500 more on Option A means that they won’t have that $500 to spend on other opportunities. Yet Frederick and his colleagues believed that, especially when people are overloaded with too many choices and decisions, they don’t think much about this. Their studies suggest a simple yet often overlooked solution to the potential problem: Give decision makers a little help by making the trade-off in cost a little more explicit with some gentle prodding.

In one of their studies participants were randomly assigned to one of two groups and offered the chance to purchase a DVD for $14.99. One group was presented with the choice to either “Buy the DVD” or “Not buy the DVD.” However the second group was presented with a choice to either “Buy the DVD” or “Keep the $14.99 for other purchases.” Despite the fact that the two descriptions are equivalent—after all, “not buying” implies keeping the money for other purchases—this small change led to a big difference, with purchase rates in the second group dropping from 75 percent to 55 percent.

The authors of the research noted that the furniture manufacturer and retailer IKEA used this strategy brilliantly in an advertising campaign in Singapore. In one advertisement, the left pane featured an unhappy woman standing by a fancy-looking cabinet containing only a single pair of shoes. The caption underneath read, “Customized cabinet $1,670 + 1 pair of shoes $30 = $1,700.” In contrast, the right pane of the ad featured a woman in front of a less ornate IKEA cabinet that was filled to the brim with shoes. The caption underneath showed that the cabinet’s price ($245) plus the price of 48 pairs of shoes ($1,440) was still less than the $1,700 from the left pane.

It is interesting to note that in the IKEA ad example the savings were used to purchase products related to the featured item (i.e., shoes and shoe-storing furniture). However, Frederick and his colleagues found that this doesn’t always have to be the case.

In another experiment, participants were asked to choose between two cell phones, with the higher-quality option costing $20 more. However, a little earlier, half of the participants had been asked to think about items—any items—they could buy for about $20. It turns out these participants were about 50 percent more likely to choose the less expensive cell phone than those who were not asked explicitly to think about what they could buy with $20.

Therefore one small change that every communicator can make that could lead to a big difference in their message’s effectiveness is to be explicit about the advantages their offer will garner in addition to the offer itself. A politician describing how her new policy will save the average household $250 a year might go on to describe the sorts of things that a family might be able to do with the extra cash, such as a family leisure trip, an extra boost to the college fund, or simply a little bit extra for a rainy day. Similarly an IT consultant wishing to persuade a client of the merits of his favorably priced software system could bolster that already strong position by illustrating related examples of what the savings in time and money could be used for.

A sales manager who asks her team to consider how they would spend next quarter’s sales bonus should they achieve their goal might be engaging a
SMALL
BIG that leads to an increased sales performance—especially if those spending plans are then made public on the team’s bulletin board.

Adopting
SMALL
BIGs that make opportunity costs more salient could benefit your retirement plans, too. One of us has a friend who, like many couples with children, faces the continual trade-off between spending today vs. saving for an earlier and potentially more comfortable retirement. Their
SMALL
BIG solution is to create a unit of spending called “retire one week early.” When this couple contemplates expensive decisions, they compare the cost of the decision to the opportunity cost of retiring a few weeks earlier. Not long ago they told us that friends of theirs had recently moved to a more expensive house, prompting them to consider doing the same. However, when it became obvious that if they were to move the cost would be the equivalent of them having to retire four years
later
than their target, it quickly became evident to them that it was something they didn’t want to do.

Of course, it is also important to keep in mind that the opportunities you highlight with your savings should be good ones. The authors point to one anti-war website that described the cost of the war in Iraq (which at the time had reached an estimated $300 billion for the United States) as “the loss of nine Twinkies per American per day for a year.” In this context it seems likely that however well-intentioned the message, the peace advocates may have unwittingly become their own worst enemy.

However ill-advised this attempt was, there is an important underlying message that can serve anyone whose products, propositions, and policies carry a high price. Instead of framing the opportunity costs as attractive and important, frame them as unattractive or unimportant. The diamond mining and trading company De Beers offered a wonderful example in a recent advertisement depicting a photograph of two large diamond earrings. The tagline?

“Redo the kitchen
next
year.”

I
magine that one day you and a friend meet for coffee. After you order and pay for your drinks, the barista hands you a loyalty card and explains that each time you buy a cup of coffee they will stamp your card. Once you have collected ten stamps you can claim a free cup of coffee. You take the card from the barista and notice that she has already stamped your card
twice
to get you on your way toward that free cup of coffee.

The progress you have now made toward your free cup of coffee could be framed in one of two ways. Either you are 20 percent of the way toward achieving that free cup of coffee or you have 80 percent remaining. But which is more likely to motivate you to complete the task?

It turns out the answer isn’t relevant just to a coffee shop owner looking to influence her customers to be more loyal, but to anyone whose challenge requires them to persuade others (and even themselves) to complete tasks. (And by the way, before you continue reading, you should know that you have already completed 10 percent of this particular chapter of
The
SMALL
BIG.
)

Persuasion researchers Minjung Koo and Ayelet Fishbach thought that an individual’s motivation to complete a task could be improved by making a small change in where they focused their attention. They hypothesized that, at the begining of a task, getting individuals to concentrate on the smaller amount of progress they had already made toward a goal would be more motivating than focusing on the larger amount of effort that remained.

In order to test their ideas, Koo and Fishbach conducted a fascinating series of studies, including one in a popular sushi restaurant. Over a period of four months some 900 regular customers were enrolled in a loyalty program where they would receive a free lunch of their choice after purchasing ten lunches. Half the customers in the study were given a blank card and were told that a sushi-shaped stamp would be added to their card each time they bought lunch. By providing a stamp for each purchase, a customer’s attention was directed to the progress they were making toward their end goal. Let’s call these customers the “progress
accumulated
” group.

The other half of the customers were given a card that was already printed with ten sushi-shaped stamps on it. Each time these folks bought a lunch, instead of having a stamp added, a stamp was removed with a hole puncher. As a result, the attention of these customers was focused on how much progress remained before they received their free lunch. We’ll call these customers the “progress
remaining
” group.

At this point we should highlight the fact that because this study was carried out in a working restaurant there were a range of different transactions. For example, a customer who just bought lunch for themselves would get one stamp added or taken away on their loyalty card, meaning that they made only a little bit of progress toward their free lunch. But a customer who bought lunch for themselves and a group of friends or business associates would receive multiple stamps (or have multiple stamps removed from their loyalty card), meaning they made lots of progress toward theirs.

Analyzing the results, the researchers found that those customers who made only a little bit of initial progress by buying lunch just for themselves or a small number of other people were much more likely to return to the restaurant in the “progress accumulated” condition. However the reverse was true for customers who made a lot of initial progress—those customers were more likely to return if their attention was focused on the “progress remaining” to get the free lunch.

Why the difference? Because in both cases customers were more motivated to complete the goal when their focus was directed to the smaller number—whether that small number concerned the progress already made (you’re 30 percent of the way to a free lunch) or the effort that remained (you’ve only 30 percent to go).

Koo and Fishbach coined the phrase “small-area hypothesis” for this concept.

So the implication is clear: Whether your goal is to increase the success of your company’s customer loyalty program or simply to encourage others (or even yourself) to be more motivated to complete a task, this study suggests that you can increase the chances of success by, in the early stages, having your audience (or yourself) focus on the small amount of
progress
that has already been made rather than on the larger amount that remains.

One reason for this is because in the early stages of a task, focusing on the smaller number appeals to the human desire to behave as efficiently as possible. An action that moves someone from 20 percent completion of a task to 40 percent completion has doubled their progress—which seems like a very efficient action indeed. Contrast that with moving from 60 percent completion to 80 percent, which, although the same 20 percent difference, represents progress of just a quarter of the total completed.

As a result, a manager or supervisor, keen to keep her staff motivated to reach a particular sales goal or performance target, might find that their early motivation can be maintained by providing feedback on the progress that her team members have already made by telling her staff, “We’re only one week into the new quarter and you’ve already achieved 15 percent of your quarterly target,” rather than “We’ve made a great start in our first week and now we’ve got 85 percent of the way to go.”

Similarly a person keen to motivate himself to regularly save a little spare cash to buy a new high-definition TV, or a couple looking to pay off a credit card or personal loan, could improve their commitment to their financial plans by focusing on the small but important progress they have already made toward their goals. Banks and financial societies might even help their customers by signaling the progress they have made toward a savings or repayment plan on their statements and online banking pages, in much the same way that LinkedIn signals the progress people have made toward completing their online profile.

But remember the customers in the sushi restaurant who initially bought lots of lunches, meaning they immediately accumulated stamps that pushed them much nearer to the completion of the loyalty card? In their case the progress remaining was actually smaller than the progress accumulated. Remember too that they were much more likely to complete the task when their attention was focused on the smaller effort remaining.

This means that a small shift needs to be made when the halfway mark of any goal is reached. Once the halfway mark is passed, people’s motivation to complete a task will typically be higher when feedback is shifted to the smaller amount of effort
remaining
. So messages like “You only have 20 percent left to achieve your goal” will likely be more effective than “You are 80 percent of the way to achieving your goal.”

So with just 20 percent of this chapter left for you to read, now might be a good time to provide some practical examples of how this small shift in focus could lead to potentially big differences in your influence and persuasion attempts!

From airlines and hotels to coffee shops and cosmetics retailers, many businesses operate customer reward programs that have a feedback mechanism already built in, so that their customers know how much progress they are making toward that flight upgrade, free night, or, in the case of coffeehouses, their next free double chocolate mocha! The small-area hypothesis suggests that regardless of where a particular customer is on that reward journey, feedback should always focus on the small area regardless of whether it is progress made or effort remaining. Frequent flyer statements should highlight the miles earned toward an upgrade up until the halfway point and then shift to highlighting miles remaining to reach the reward. Baristas should verbally signal to customers the small progress made or the small effort remaining when stamping customers’ coffee cards.

Similarly, those involved in coaching and training others should be careful to frame their feedback and recommendations in a way that highlights the smaller area of attainment achieved or remaining. Managers and supervisors looking to influence and persuade staff to improve their skills might include such small-area signals on employees’ personal development plans. One way this could be done would be to add the percentage of progress an employee has made toward achieving a particular objective on their development plan, making sure to switch at the halfway point from progress made to progress remaining. This small change increases the chances that an employee’s attention will be focused on the smaller area, which could lead to big differences in their performance.

And when it comes to motivating yourself to get through that 60-minute Spinning class or next weekend’s 10K run, a focus on the time or distance endured in the early stages before transferring to the time or distance remaining toward the end could help get you through such challenges. Alternatively, to add momentum to your personal weight-loss program (or a month-long smoking abstinence), emphasize the weight you’ve already lost (or days without a cigarette) in the early stages before directing attention to weight still needed to be lost (or smoke-free days left) to reach your desired goal.