Latest / Marketing Psychology with Fexingo: Behavioral Triggers, Persuasion, and Consumer Behavior / How Endowed Progress Makes You Finish What You Started
Transcript
- Lucas: So Luna, quick question. You're standing at a coffee counter, and they hand you a loyalty card. One has eight empty slots. The other has ten slots — but two already have stamps in them, like the store pre-filled them. Luna: I mean, I'm grabbing the ten-slot card in a heartbeat. Feels like I'm two steps ahead already. Lucas: Exactly. And that's not just a quirk — it's a well-documented bias called the endowed progress effect. The idea is that people are more motivated to finish a task if they believe they've already made some progress toward it, even if that progress is essentially cosmetic. Luna: So it's not that the ten-slot card is a better deal — it's that those two pre-filled stamps change how I see the whole transaction. Lucas: Right. The classic evidence comes from a 2006 study by Joseph Nunes and Xavier Drèze. They ran a field experiment at a car wash. Customers got a loyalty card that required eight washes for a free one. Half of them got a blank card, the other half got a card that already had two stamps — even though it required ten washes for the reward. Luna: So the eight-wash card and the ten-wash card with two freebies both need eight actual purchases. Same distance to the finish line. Lucas: Exactly. But the results were striking. Only nineteen percent of the blank eight-wash card holders completed it. But the group with two pre-existing stamps? Thirty-four percent finished. Nearly double the completion rate. Luna: Whoa. So just seeing those two stamps already there makes people almost twice as likely to come back seven more times. Lucas: And that's the endowed progress effect in action. It's related to the goal-gradient effect — the closer people feel to a goal, the more effort they're willing to put in. But here's the twist: the progress is entirely artificial. The customers didn't earn those stamps, yet their brains treat them as real headway. Luna: So it's not just about being closer — it's about feeling like you've already invested something, even if that investment is fictional. Lucas: Exactly. The researchers called it 'endowed progress' because the progress is given, not earned. And it works because of a few psychological mechanisms. One is loss aversion — once you've 'claimed' that progress, giving it up feels like a loss. Another is commitment and consistency — you've started, so your brain pushes you to finish. Luna: I feel like every loyalty program in existence uses this, but some do it more blatantly than others. Lucas: Oh, absolutely. Starbucks Rewards is a great example. When you sign up, you often get a few stars deposited right away — like 50 stars just for joining. That's pre-loaded progress. And their tiers are structured so you're always within striking distance of the next reward. Luna: Airlines are probably the masters of this. I remember signing up for a frequent flyer program and seeing a status dashboard with a progress bar to 'Silver' — and it's like maybe thirty percent full already, because they count your first flight as a head start. Lucas: Right. And actually, the car wash study had a second experiment that's even more revealing. They offered a third group a card with eight slots, but they placed a single pre-filled stamp in a 'bonus' position — slightly separated from the others. Like a gift stamp. Luna: Huh. So it's not just pre-loaded progress — it's progress that's framed as a separate bonus. Lucas: And that card outperformed even the ten-slot with two pre-fills. The completion rate was something like forty-six percent. The key seemed to be that the stamp was clearly not part of the required purchases — it felt like a gift, which made the customer feel they were being treated specially. Luna: That's fascinating. So the framing of the progress matters as much as the progress itself. A bonus stamp says 'we're giving you something extra' rather than 'we moved the goalposts.' Lucas: Exactly. And that's a subtle but important distinction. If you just pre-stamp the regular slots, some customers might feel like they're being tricked — like the store is inflating the total. But if you set it apart as a bonus, it feels generous, which builds goodwill. Luna: So when brands use endowed progress, they have to be careful not to make it feel manipulative. There's a fine line between a nudge and a rip-off. Lucas: That's the key. Another study — I think it was by Scott Webb and his colleagues — found that when consumers perceive the pre-filled progress as artificial, the effect can backfire. They resent feeling like they're being played, and they're less likely to engage at all. Luna: So it's not enough to just slap two stamps on a card. The progress has to feel earned, or at least plausible. Lucas: Yeah, the mechanism is that the progress needs to be a signal of the consumer's identity or effort. If it's too obviously a marketing prop, it loses its power. One way brands get around this is by tying the initial progress to a specific action — like making a first purchase or completing a profile. Luna: That's smart. So instead of just handing you free progress, they require a small investment first. Which probably makes you feel even more committed. Lucas: Right. And that connects to the broader principle of commitment and consistency. Once you've made any kind of investment — even a tiny one — you're more likely to follow through. Endowed progress literally gives you a head start, but it also activates that desire to be consistent with your past actions. Luna: Let's talk about practical applications beyond loyalty cards. How can a small business use this without coming across as gimmicky? Lucas: Great question. One classic application is in onboarding. For a subscription service or an app, you can show a progress bar during setup: 'Step 1 of 5 completed' — but actually, you can start with a step already checked off, like 'Profile created.' That's a form of endowed progress. Luna: I've seen that in project management tools. They literally show a checklist with the first item already ticked off — like 'Welcome' or 'Create your first project.' It makes you want to complete the rest. Lucas: Exactly. And it works because it reduces the perceived effort. The user thinks, 'Oh, I've already started, I might as well finish.' It's a small nudge, but it can significantly increase activation rates. I've seen reports of onboarding completion rates jumping by twenty to thirty percent with that simple tweak. Luna: Another area is in sales — maybe quote forms or proposals. If you show a visual progress indicator that's already partially filled, the customer feels closer to the end. Lucas: That's a real technique. Some companies use a 'quick quote' form with a progress bar that starts at thirty percent. It's a common tactic in digital marketing. But again, the key is not to overdo it or make it feel fictional. Luna: So let's talk about when it fails. I've seen a few examples where brands tried this and got backlash. Lucas: One high-profile example is from a few years ago when LinkedIn had a progress bar for profile completeness. It would show '85 percent complete' and encourage you to add more sections. But people quickly realized that the bar would never quite reach 100 percent — there was always something else to add. That felt manipulative, and users complained. Luna: So the progress felt fake, and it turned people off. Lucas: Exactly. The progress has to be attainable and honest. If customers feel like they're being strung along, they lose trust. The endowed progress effect only works when the progress is genuine and the goal is clear. Luna: That makes me think of a broader principle: it's not just about making people feel closer — it's about making them feel like their effort is being acknowledged. Lucas: Right. And that's why the best loyalty programs don't just pre-stamp cards; they celebrate milestones. 'You've reached the Silver tier — you're halfway to Gold!' That's a form of endowed progress, but it's earned progress, which makes it even more powerful. Luna: And I guess that's why some programs reset your progress if you don't stay active. It's a loss aversion trigger — you don't want to lose that progress you've built. Lucas: Exactly. Like elite status in airline programs — if you don't fly enough, you lose it. That's a powerful motivator to keep engaging. But it can also backfire if it feels too punishing. There's a balance. Luna: Before we get too deep into the dark side, I want to take a step back. We've been talking about how these small psychological triggers shape our decisions. And honestly, I think that's why people love this show — it gives them a lens to see these tricks in the wild. Lucas: Yeah, I think that's true. And if these conversations have sparked something you've actually used in your own work or just in how you look at the world, it's worth mentioning that listener support is what keeps this show going. We don't run ads, and that's something we're proud of. If you've gotten value out of these episodes, you can support us at buy me a coffee dot com slash fexingo. It's a simple way to say thanks and helps us keep making these deep dives. Luna: Yeah, we've had so many listeners tell us they've used the endowment effect or the decoy effect in their own marketing. Knowing that helps us keep going. Lucas: Alright, back to the science. So we've talked about how it works and where it fails. But let's talk about a really interesting twist: what happens when the goal is framed as a 'stretch' — like a 12-wash card with two bonus stamps? Luna: Ooh, that's a good one. So instead of a standard 10-wash card, you make it 12 washes but pre-load two stamps. Now the customer has to do 10 actual washes — more than the standard 8 — but they see it as a bigger reward, and they're still motivated. Lucas: Right, and that's exactly what some brands do. They inflate the total and pre-load progress to make the goal seem closer while actually increasing the required purchases. But it's a risky move — if the customer realizes the math doesn't work in their favor, they'll feel cheated. Luna: So it's a fine line. The pre-loaded progress has to be perceived as a perk, not a manipulation. Lucas: Exactly. And that's why the best applications of endowed progress are when the progress is real, even if it's small. For example, a fitness app might show your 'streak' days — that's earned progress, and it's motivating because you don't want to break the chain. Luna: Yeah, the streak effect is huge. It's like a visual representation of your accumulated effort. Lucas: And it's a form of the same bias — you've already invested 12 days, so you don't want to lose that. The endowed progress is real, but the effect is the same. Luna: So what's the takeaway for marketers? If I'm designing a loyalty program or an onboarding flow, what should I actually do? Lucas: First, make the progress visible. Show a progress bar or a punch card that clearly indicates how close the customer is to the reward. Second, consider giving a small head start — but tie it to a genuine action, like joining the program or making a first purchase. Third, frame it as a bonus, not a manipulation. Luna: And probably test it — because what works for one audience might feel creepy to another. Lucas: Definitely. A/B testing is essential. But the endowment effect is a robust finding — it's been replicated across different contexts. So if you design it carefully, it can be a powerful tool. Luna: I think the big insight for me is that progress isn't just about the number — it's about the feeling of momentum. You want customers to feel like they're on a journey, not just collecting stamps. Lucas: That's a great way to put it. And that's why this effect is so useful — because it turns a simple transaction into a story of progress. And humans love stories. Luna: So next time you see a loyalty card with pre-filled stamps, you'll know — it's not just a friendly gesture, it's a subtle nudge. Lucas: Exactly. And maybe you'll use it yourself. Just make sure you're using it ethically — because once your customers catch on, the magic disappears. Luna: I think that's the perfect note to end on. Thanks for joining us, and we'll see you in the next episode. Lucas: Until then, keep an eye on those stamps.