Imagine handing your customers a head start in a race they didn’t even know they were running. That’s the psychology behind the endowed progress effect, a well-established phenomenon that can supercharge your marketing strategy. Identified by Joseph Nunes and Xavier Drèze, in their seminal study, this principle reveals that people are significantly more likely to chase a goal or complete a task when they feel they’ve already accomplished the first steps, even if that progress is a manufactured illusion. For marketers, this is a great way to spark excitement, build loyalty, and drive action among your target audience.
The Science behind the Effect
Nunes and Drèze’s research demonstrated that providing artificial progress (such as giving customers a head start on a loyalty program) significantly increases their likelihood of completing the goal. In this landmark experiment, participants who were given a 10-stamp loyalty card with two pre-stamped purchases already marked off (leaving 8/10 purchases until their reward) were nearly twice as likely to complete the card, and completed it faster, than the participants who were given an eight-stamp loyalty card without any pre-stamped purchases (8/8 purchases until their reward).
The endowed progress effect thrives because it taps into two cognitive biases: the sunk cost fallacy, where we feel committed to tasks we’ve invested in, and the illusion of progress, where even artificial advancements make goals seem closer than they are.
In the years since, new research confirms the effect’s robustness, showing it works best when the goal feels achievable and the progress is tangible in a person’s daily life. The endowed progress effect taps into our desire for achievement (and its accompanying dopamine boost). The closer we are to a reward, the more effort we invest and the more value we see in the endeavor. Essentially, the goal-gradient hypothesis kicks in, and the closer we are to the finish line, the harder we sprint. For marketers, tapping into this principle requires the integration of measures that make existing or prospective customers feel like they’re well on their way to achieving a reward.
Top Takeaways for Marketers:
- Kickstart Progress: Offer initial points or steps in a loyalty program to spark momentum.
- Visualize the Path: Use progress bars or trackers to make each step and milestone tangible and motivating.
- Set Achievable Goals: Ensure rewards feel within reach to sustain enthusiasm.
- Personalize the Experience: Offer the customer a reason they are receiving the initial boost in the program (e.g., they are a loyal customer, or it’s part of a limited-time promotion).
- Keep It Real: Research suggests that “too much of a good thing” can be an issue. Ensure the initial “progress” is realistic for the activity (e.g., loyalty stamp cards with nine out of the 10 stamps already filled are quickly recognized as gimmicky and decrease the value perceived in the program).
Starbucks’ Winning Play
Starbucks masterfully employs the endowed progress effect in its Rewards program. Upon joining, new members often receive a small number of “stars” (points) as a welcome bonus, creating an immediate sense of progress toward their first free drink or food item. The app’s progress bar visually tracks stars, making each purchase feel like a step closer to a reward. This strategy not only drives repeat purchases but also fosters emotional investment in the brand.
Why This Matters for CMOs
In today’s competitive landscape, the endowed progress effect offers a smart, cost-effective way to stand out. By giving customers a sense of progress, you tap into their intrinsic drive to achieve, turning one-time buyers into loyal advocates. Whether through loyalty programs, gamified campaigns, or tailored incentives, this strategy can amplify your brand’s impact. Start customers ahead, and they’ll race to stay with you.
