The Goal-Gradient Effect

I’m a big goal-setter. You name it, and I’ve probably set a goal for it. This is no badge of honor, mind you — there are millions of people just like me who set goals and work hard to achieve them. I’m talking about all kinds of goals here — including filling up a frequent buyer or loyalty card to receive a free product, an additional service, or a discount.

For example, my husband, Bret, is hooked on the gas points he earns at the grocery store (that explains why he calls me every night on his way home from work to ask if we need anything there). I’m hooked on the Open Table points toward cash rewards I earn whenever I make a reservation at a restaurant. Clearly our respective goals are at odds (seriously, who needs groceries when there are plenty of places that will cook for you?), and the conflict intensifies as we inch closer to them and become even more competitive. (And still our marriage survives.)

Clearly, businesses give out these cards for a reason, right? Of course they do: they want us to keep buying from them. But what is it about human behavior that actually makes a loyalty program work? You know the drill: every time you buy a cup of coffee at your local java shop, you get a stamp on your frequent-customer card. When the card is filled, you get a free cup of coffee.

Lets consider the following two scenarios:

  • Card 1 – The card has 10 places for the stamps, and when you get the card, all the boxes are un-stamped.
  • Card 2 – The card has 12 places for the stamps, and when you get the card the first two boxes are already stamped.

Now: which card will you complete faster — #1 or #2?

If you said card #2, you would be correct. Here’s why. Even though both cards need ten stamps to reach the reward of a free cup of coffee — they’re both “Buy 10, get 1 free,” even though that may not seem to be the case at first glance — because of something called the goal-gradient effect, you are likely to fill up card #2 faster than card #1 (this explains the thinking behind the “gift” of two free stamps when you sign up for the card).

The goal-gradient effect was first observed by the American psychologist Carl Hull in a 1934 study of rats running through a maze. He found that the rats would run much faster as they got closer to the end of the maze where the reward (cheese, of course) was waiting.

Subsequent research (a 2006 study at Columbia Business School by Professor Ran Kivetz) revealed that humans also accelerate their behavior as they move closer to their goals. The coffee-card scenario above is part of Dr. Kivetz’s research study, which verified that (oh, horrors) people act just like rats in a maze: the closer they perceive themselves to a goal or reward, the faster they will take action to reach it. A 2010 University of Chicago study by Minjung Koo and Ayelet Fishbach advanced these findings by focusing on what would provide the greatest motivation toward a goal. Which was more effective, they asked: (a) looking at what was already completed, or (b) concentrating on what remained to be accomplished? “B,” the study found: people were more eager to continue once they focused on what was left to do.

All of this really got me to thinking (I know, not that AGAIN!) about how we might use this knowledge to improve our healthcare reports and dashboards. One potential gambit that grabbed my attention was very simple: what if I simply changed the way I labeled information for certain groups?

Usually, we monitor performance by a simple graph using straightforward labels like these:

average-number-of-days

This is absolutely fine if we just want to answer the question “how are we doing?” But what if we want to fire up and motivate a team to swing for the fences and really hit a home run way before the bottom of the ninth (yes, I am ready for Opening Day!)? Perhaps a slightly different graph would energize the team to strive for that goal:

goal-waiting-time

Here I’ve highlighted — by using a green marker and a figure — the number of days remaining between what we’re doing now (in each month) and what we’d like to achieve: reduce to five days the amount of time a new patient has to wait for that first exam. By adding a display of future months (and, indirectly, emphasizing the ever-shrinking amount of time we have to reach the goal), I hope to get my team’s competitive juices flowing and motivate its members to work harder toward that ideal five-day waiting period. To put it another way, I’m trying to leverage what I’ve learned: that the closer people get to a desired goal, the faster they will work toward it.

I have as yet no evidence that modifying my data display in this way will in fact motivate people to change the way loyalty cards with “free” stamps do. All the same, I’m certainly going to try out these changes, and see what kind of feedback I get — you know: nothing ventured, nothing gained.

Right now though, I need to make a dinner reservation, because I am oh, so very close to getting a $50 cash reward. Gas points be damned.

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One Response to The Goal-Gradient Effect

  1. I think the second chart just complicates matters. Why not just plot the days to goal values and simplify the chart?

    What might influence behavoiur is switching from “accomplished” to “left to go” at about the 1/2 way point. When first starting a project we all like to see what’s been/being achieved. When we get closer to the end, chopping the left to go bar down towards zero is more exciting.

    About the card 1 / card 2 scenario: I don’t seem to fit the mould – either way, 10 stamps / 10 purchases are needed. The fact that I have a “head start” with card 2 would not influence my behaviour. Similarly, the $5.95, 5.98, 5.99 marketing trick always means $6 to me.

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