How Effort Investment Makes People Addicted to Products
How many times did you invest in a product ton of time to learn the ins and outs, only to find out about a better one but could not make the switch? Or you bought an iPhone and found yourself buying a MacBook and Apple Watch afterwards?
We would like to think that we are free to choose, but our past actions are a reliable indicator of our future actions. This powerful social influence is called commitment and consistency. We have a desire to be or appear to be, consistent with what we have already done.
Committing or investing in a product is where the customers are asked to do a bit of work. Once people give something of value (personal information, time, effort) to a product, it increases the chances that it will be used again in the future.
For example, research shows that if someone asks us to watch their belongings, we’re more likely to try to catch the thief who tries to steal them than if nobody asked us.
Consistency is a powerful motivator for action. It’s generally valued as a character trait, and is the basis of logic, rationality, stability, and honesty. An inconsistent person is often seen as confused, complicated, erratic or undisciplined.
A product can keep users committed until it becomes a habit
Commitment is the essential element which reinforces the behaviour of consistency. Once you take a stand, there is a natural tendency to behave in ways that are consistent with the position.
For example, when I bought a Sony TV, I found myself buying Sony speakers and a Sony PlayStation to be consistent with the brand and my previous buying decisions. Even though Sony’s competitors had better speakers, I went for the brand ones. Also, that’s why people who own an iPhone are more likely to own a MacBook or Apple Watch. We want to stay consistent in our actions.
The buying habits is a part of consistency. We would want the same products from the same brand if the experience was great. But there also comes the element of investment of effort into something.
The IKEA effect
It is a cognitive bias in which consumers place a high value on products they created. The IKEA effect was identified and named by Michael I. Norton of Harvard Business School, Daniel Mochon, and Dan Ariely who published the results of three studies in 2011.
They described the IKEA effect as “labor alone can be enough to induce greater liking for the fruits of one’s labor: even constructing a standardised bureau, an arduous, solitary task, can lead people to overvalue their creations.”
The Swedish furniture manufacturer has an innovative way for its packaging process. It allows the company to decrease the labour costs and increase efficiency in their stores. In comparison with their competitors, IKEA lets people assemble their furniture. Later they found out that it has hidden benefits. People who built something with their own hands are more likely to value it than buying something already assembled. So businesses can leverage that. The work customers put into their products increases the value of the product.
For example, I have a lot of friends who can’t switch from IKEA even though they can afford more luxurious brands. Reason? They are already invested. They value the process of building something with their own hands more than buying something already assembled. So making a switch will be hard for them on a subconscious level.
Can you give some other examples from different companies?
The app itself is free, and there are no entry costs. Download, register and use it. The investment stage starts when they ask you to follow someone. This action itself gives nothing, but they know you will come back to see what those people posted. And this creates a cycle of investment.
Another example for Instagram is their collections. With every photo you save in your collection, harder for you it will be to leave the app or make a switch. Or more collections you have is the same thing.
This feature works great for Pinterest too and it is called the gatherer syndrome. You hunt for new stuff, you save them in a collection, and it’s a reward in itself. That’s why it is so hard for other companies similar Instagram to break into the market. Even though, some of them are better. People already invested in one app why should they switch to yours? We don’t love losing our efforts in vain.
Every time we add experiences to a collection or invest personal information or effort, over time, the product becomes more valuable, and the service becomes harder to leave.
Again, the app is free. But every time you save a song into a playlist, like Instagram, you commit to the brand. It strengthens your ties with the service. The songs on a playlist are an example of how content increases the value of the service. Even though Spotify does not produce any of those songs.
Let me give you an example. Before switching to iPhone I had an Android phone, and Spotify was the most appealing app at that time for Android. After two years, I decided to make a switch to an iPhone, but Spotify remained. I tried to use Apple Music, but it was hard to adapt to a new interface, recreate my playlists and listening habits. Take into account that I had over 300 songs, which already was hard for me to decide on, leave it or not.
Spotify Discover Weekly
Another great example of how Spotify increases commitment is their Discover Weekly habit. You can read more about it here. When they first introduced “Discover Weekly”, a personalised playlist based on your listening history, it was already sealed for me that I am not going to leave the app for another one. And apparently it is not only for me but hundred of thousands of other people too. Take a look at the graph and see how it works.
Here a different form of investment comes, and it is the reputation. On an e-commerce platform like eBay, reputation is critical for people to buy from you something. Sometimes it is a crucial differentiator between you and the competitors. So merchants invest a lot into their reputation and trying to give the best customer service as possible. This way they earn badges, as a trustworthy seller, good ratings and reviews.
Reputation makes users, more likely to stick to the service. Once people invest effort in creating and maintaining their status, or a high-quality score, it becomes hard to leave the platform. They give it too much meaning. So if you want them to transition to your new platform, you have to give them the score and audience that was so hard to earn. Plus add some extra benefits.
The more people invest in a product and store value into through the form of following and collecting stuff increases the likelihood they will use it again in the future and comes in a variety of ways.
How can you apply this to your product?
Investment and consistency is something that can be used for your product too. Giving your customers the ability to collect experiences, build stuff or invest personal information will increase the likelihood of them using your service in the future. The more they invest, harder it will be for them to leave your product.
Look at how you can add in an aspect of customer-owned creation into your existing product or service.
Ensure that you market these changes as a value-added experience decision, and not a labour-cost-saving exercise. To some extent, the perception of this may depend on your brand.
Provide personalisation options early on in your user flow to engender a sense of ownership and significantly reduce conversion drop-off later in the order process.
I would also highly recommend reading Hooked by Nir Eyal and Influence by Robert Cialdini to understand better how human psychology works when using certain apps or products and what other principles you can apply to your product or service.