How to Increase Business Using Goals

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By Steve Martin, CMCT

Imagine one day that you and a friend meet for coffee. After ordering and paying 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. The Barista further explains that once you have collected ten stamps, you can claim a free cup of coffee. You take the card noticing that they have already stamped your card twice indicating the progress you have made towards gaining that free cup of coffee. That progress could be framed in two ways. You are 20% of the way towards achieving that free cup of coffee. Or it could mean that you have 80% left to go.

But which is more likely to motivate you to complete the task? It turns out the answer could provide valuable insights, not just in making coffee shop loyalty programs more successful, but for anyone looking to influence either themselves, or others, to complete a task.

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In a paper recently published in the Journal of Consumer Research Professor Ayelet Fishbach from the Booth School of Business in Chicago and Minjung Koo from Sungkyunkwan University, South Korea proposed that an individual’s motivation to complete a task could be enhanced if their attention was focused on the smaller amount of progress they had made rather than the larger amount of effort that remained.

One potential reason why directing attention to a small area of progress might increase motivation is because the marginal impact of each action can appear larger. For example, an action that takes someone from 20% completion of a task to 40% is a doubling of progress. In contrast, moving from 60% completion to 80% represents just 33% progress.

To test these ideas a series of studies were conducted including one in a popular sushi restaurant.

Over a period of four months over 900 customers were enrolled in a loyalty programme where they would receive a free meal after purchasing ten lunches. Half of those enrolled were given a card and received a sushi-shaped stamp on it each time they purchased a lunch. As a result their attention was directed towards the progress they were making towards the free lunch. Let’s call those the ‘progress accumulated’ group.

The other half of the sushi eaters were given a card already printed with 10 sushi-shaped stamps. Each time these folks bought a lunch one of the stamps would be removed (with a paper punch). As a result their attention was focused on how much progress remained before they got the free lunch. We’ll call them the ‘progress remaining’ group.

The results indicated that those in the ‘progress accumulating’ group were almost twice as likely to return to the restaurant to collect subsequent stamps compared to those in the progress remaining group. Not only were they significantly more likely to return, they did so in a faster time too, typically returning four days quicker.

So whether your goal is to increase the success of a customer loyalty program or to encourage others (or even yourself) to complete a task this set of studies is telling us that at the beginning of a task we can increase the chances of success by focusing on the smaller amount of progress made so far rather than the larger amount that remains.  A phenomenon the study authors refer to as the Small-Area Hypothesis.

But what about when the progress remaining on a given task is actually smaller than the progress made to date? For example if someone has already achieved 80% of a task would they be more motivated to complete if their attention was focused on the larger amount of progress they had already made or would it be more effective to focus their attention on the smaller 20% that remains?

Well it turns out that the researchers considered these questions in their studies too and found that their Small-Area Hypothesis held true. Put another way, at the beginning of a task people were more motivated to continue working towards that task when their attention was focused on the smaller number progress made so far, “You are already 20% of the way towards your goal” compared to “You have 80% of the way to go.” But when progress passed the half-way mark people were more motivated to complete the task when their focus shifted from the now larger progress they had made to the smaller progress that remained, “You have 20% left to achieve your goal” compared to “You are 80% of the way to achieving your goal”.  

So when seeking to persuade people to keep committed and consistent with a task or goal that they are working towards it appears that the science is telling us that we can increase our effectiveness by focusing their attention on the ‘small area’ whether that represents progress  already made or progress that is remaining.   

Only 20% left to read.

So what are the practical implications for you? Well any business that has a customer reward program will likely also have a feedback mechanism built in so that customers know how much progress they are making towards that free flight, extra hotel night or, in the case of coffee houses, their next free double chocolate mocha! This Small-Area Hypothesis suggests that regardless of where a particular customer is on that reward journey, focusing on the small area will help frame subsequent actions as being more impactful in achieving that goal, potentially leading to more participation, adoption of new products, and increased spending over time.

Managers too might find focusing on the small area a useful way to keep staff motivated towards reaching sales and performance targets. In the early stages, providing feedback along the lines of “one week in and you have already achieved 15% of your quarterly target” and as target attainment gets closer “only 10% of your target to go now”.    

And when it comes to motivating ourselves, recording the small area as evidence of our progress towards a symbolic and specific goal should also prove useful. For example, a personal weight-loss or fitness program should be recording progress by emphasizing whichever is smaller: the weight we have already lost or how much we still need to lose to reach our desired goal.

 

Source

Koo, M. and Fishbach, A. (2012) “The Small-Area Hypothesis: Effects of Progress Monitoring on Goal Adherence.” Journal of Consumer Research. Vol.39, No.3, pp. 493-509.

 

Discussion Questions:

Which areas of your business do you think would  benefit most by applying the insights from the small area hypothesis study?

 

What other approaches have you employed that have proven to be effective levers for persuading others to complete a task or achieve a goal?

  • Brian Ahearn

    Steve,
    Excellent post. As I read it I thought about my mindset when I run. As I make my 6 mile morning trek when I hit 1.5 miles I always think, “25% down,” and when I hit 2 miles it’s, “33% done.” After the 4 mile mark it’s reframed as, “One more lap around the neighborhood.” I’ve also found this mental game helps with the boredom on treadmills.
    Brian

    • http://www.influenceatwork.co.uk/ Steve_Martin

      Hey Brian, hope all is well. Thanks so much for your comment. Steve

  • Lori Rubinger

    A subtle but very impactful approach. I am going to look for ways to adopt it in our programs. thank you.

    • http://www.influenceatwork.co.uk/ Steve_Martin

      Hi Lori, thanks you so much for posting a comment. Best wishes, Steve

  • Shannon Peebles

    This was a really interesting read, thank you! I find myself playing the mental games with myself when I am on long car trips: we’ve gone 30 miles, we’ve gone 60 miles, oh, it’s only 30 miles to the border, we’ve gone 150 miles, etc etc until it is around 150 miles to our destination. I get really excited when it drops down to double digits to our destination.

    • http://www.influenceatwork.co.uk/ Steve_Martin

      Shannon, I wonder if it will keep the kids quieter? Steve

  • http://JamesTPereira.com/ James T Pereira

    I am consulting for a community pharmacy which has a loyalty programme which only gives a discounted price each time they come in and buy. I’m going to discuss with management to implement some sort of reward scheme that depends on purchase frequency.

    • http://www.influenceatwork.co.uk/ Steve_Martin

      Hi James,
      As you are working for community pharmacists I wonder whether you might have a view on the how using this small area hypothesis to change the labelling on medicine packs might promote greater compliance? For example highlighting progress a patient has made / has left while on a on course of medicines.
      Steve

      • http://JamesTPereira.com/ James T Pereira

        Can Small Area Hypothesis be used in cases where the patient has to take medication for the rest of their life? These would be high blood pressure, heart disease, etc.
        When you have to take medication day in and month out, can we say they have achieved 20% or completed 80%, because there is no real end.
        I can see it being used for short term medicines, like antibiotics and even vaccinations that have a certain number of doses to achieve complete protection. However, in these short term therapy situations, certain medical practices have implemented a system where their CRM alerts them to remind the patient to come in for a booster short. Here the Hypothesis will hold water.

  • http://www.facebook.com/ytbong Luke Bong Yew Tzuu

    Steve,

    Thank you for this excellent article! Small-Area Hypothesis makes so
    much sense. For the majority of the people in the world, starting is
    already half the battle. Having the right motivation to complete the
    task/mission/journey makes up the other half. Most
    people give up prematurely because they are so focused on the
    Large-Area such as 80% left and as a result, they feel the burden of the
    unfinished work. Just imagine, running a marathon (more like almost
    dying) and being informed you still have 20KM to go.
    The mind immediately shouts “Oh, no!”

    One idea that I find really effective in business is to celebrate small
    wins. I’ve been practicing this in my business but it’s only now that I
    know there is a name for it “Small-Area Hypothesis”. Businesses
    shouldn’t wait for big achievements to celebrate.
    That will just put too much strain on the team. Instead, look for every
    opportunity there is to announce how much progress has already been
    made and celebrate it. It’s like having a personal cheerleader cheering
    you on each step of the marathon. It makes taking
    the next step that much more compelling.

    I really appreciate this article. Hope to read more from you.

    • http://www.influenceatwork.co.uk/ Steve_Martin

      Hello Luke. I appreciate you taking the time to post your comment on Inside Influence. This whole area of the influence that progress framing effects can have on goal attainment are so interesting and ripe for lots more research that we’ll hope to be able to write about in future issues.
      Steve

  • Rupert Peacock

    Could the most effective place to put the “free” stamp be at the half way mark? You are then helping the transition from progress achieved to progress remaining. This would require people to disengage at the mid-way mark because although they have come a way, there is still a way to go.

  • http://www.facebook.com/christopher.catt.56 Christopher Catt

    This is interesting. My initial thoughts centre on the 20% progress already made. It is important to make goals meaningful and realistic. This type of promotion would not get me interested unless I regularly used that Coffee Shop. A regular user would also probably not be motivated as they would use it anyway probably through convenience. If you had to go out of your way I doubt a coffee on its own is enough. This loyalty system works well with people like Utility Warehouse. Trading discounts from shopping against your utility bills does not need any further analysis. You get a payback twice without altering your behaviour. However, if you realy want this goal, the idea of breaking in to motivational steps may encourage you to buy those extra cups of coffee. But the ROI is very poor. 1 cup having paid for 10 is a very high cost on your sales generated (the cup of coffee) against the income used to get it.

  • Pingback: Chunking tasks so they are more manageable – go for the small bit

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