26 November 2012

Scribd.com Case Study on Decision Design

This is a case study on how psychology insights on decision making can be used to guide choices. I assume that most of you are familiar with “Scribd.com” or if not, just go on the web-page.

When trying to make an account on this web-site, one is faced with three choices of subscriptions. The following screen-shot presents the options that are available. (click to enlarge)

Next, I will present the Decision Design (choice architecture) elements that I believe to be relevant in this case.

First, we see that the text on top of the image says that in essence all types of accounts offer the same benefits. This is somehow counter-intuitive since the idea of having multiple types of accounts is to have different benefits. Scribd.com, however, differentiates its offerings only in terms of price and duration.

Second, we have the “classical” three options available as in the “Linked In case study”  One reason to have three options is that the information is not overwhelming, thus making it rather easy to process. We know that too many choices are not sogood. Another reason for having three options is that most studies on choice architecture (decision design) have been done with three options. I’ll soon refer to these studies.

Third, we have a clear case of Attractioneffect(or This one is clearly better than that one). The first option – the “Day Pass” – is clearly inferior if compared with the second option “Monthly Membership”. The “Day pass” costs 9 USD and gives access for 24 hours, while the “Monthly Membership” costs the same 9 USD and gives access for one month. Even a mentally retarded person knows that “one month” is better than “one day”. 

The attraction effect shifts attention from the comparison of “Monthly Membership” and “Annual Membership”. Now, it is easy to see that “Monthly membership” is better than the “Day Pass” and the user doesn’t have to compare “Monthly Membership” with “Annual Membership”.

Fourth, The “Monthly Membership” is presented as a “middle option” or “compromise option”. As we know from “Nottoo…, but Not too…” the “Compromise effect” makes the middle option very attractive. Scribd.com wants to sell you the “Monthly Membership” and it has made it to be “a compromise option”.

Fifth, The “Monthly Membership” is preselected as a “default option”. As we know from “Just leave it like that” most people don’t bother to change the default option. This way, the “Monthly Membership” is presented as a “recommended” option.

Sixth, The “Monthly Membership” is highlighted and presented larger than the other options. Unlike in the Linked in Case study  when the user selects another option, the “Monthly Membership” is not highlighted anymore, but it remains larger than the other options. The highlighting and the bigger graphical dimension are aimed at focusing the user’s attention to this option.

Seventh, For the “Monthly Membership” there is a mention that it is “Most Popular Option!”. This is aimed at influencing the decision of the user. We know that people like to do what other people do, or in other words follow the social norm. By mentioning that the monthly membership is “Most Popular Option!” it ensures people that if they choose this option they will follow the social norm.

Seventh, the “monthly membership” is billed monthly while the “annual membership” is billed once a year. From a strictly monetary perspective it is better to take the annual membership since it is 5USD per month (60 USD in total), while the “Monthly membership” is 9USD per month (108 USD per year). Scribd.com wants people to buy the more expensive option, and it encourages them to do so by using loss aversion. If one chooses the “monthly membership” she will suffer NOW a loss of 9 USD, but if she chooses the “Annual Membership” she will suffer NOW a loss of 60 USD. Of course it is better to suffer the smaller loss. In addition to this, most people think that they will cancel their subscription soon, so it is wise to take the “Monthly membership”. However, in many instances, especially when the renewal of the subscription is by default, most people don’t cancel.

Eighth, the orange button says “Sign up and download now”. The key is the “now” and it is aimed at influencing the user to focus on the present moment and give less attention to “future outcomes”.

Ninth, Under the orange button there is a mention of “Only 60 seconds to sign up.”. This tells the user that it is easy to sign up and it requires little effort.

Tenth, Under the orange button there is a mention of “Cancel any time online. There's no commitment.” When faced with decisions, sometimes people anticipate regret and have a need to manage it. The user might unconsciously think that he will later regret subscribing. This is not actual regret, but rather anticipated regret. One of the most popular methods of dealing with anticipated regret is to ensure the reversibility of the decision. By telling people that they can cancel at any time and that there is not commitment, Scribd.com ensures people that they can manage their (potential) future regret. In brief, Scribd.com says that “The choice is reversible”. A little more on regret you can find in this post.

I believe that the above presented case study on Scribd.com is a very good example of Decision Design (or Choice architecture) that makes use of many “tools” and at the same time it allows for freedom of choice.

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drelk said...

Choice architecture is a new concept part of a new science called behavioral economics applied recently to social engineering. Nicolae, let me suggest that you change the format of public presentation of this important research to include as many people as possible who are interested in architectural decision making. I, for one, is interested in hospitals. Thank you.

Nicolae Naumof said...

Thanks Drelk for the comment. Behavioral economics is not so new (it has about 40 years now).

This post is just a case study and you are right that behavioral insights can be used in various fields including hospitals.

I'll try to come up with some applications for hospitals, though thankfully I haven't visited one in a few years.