Agency Effect

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Agency Effect

One very important finding in psychology is that people like agency. They like to be in control of their own destiny, rather than for things to be decided or shaped for them by external sources. A classic study on this looked at people’s tolerance of noise. They put them in a laboratory where a really annoying noise was going on and asked them – as a pretext – to get on with some other kind of task. For half of the participants they said “Look, there’s this horrible noise going on. Sorry, but you’re just going to have to deal with it”. For the other half they said “Sorry about this horrible noise. There’s a button here that lets you turn it off if you really have to. But we’d ask that, if at all possible, you just leave it on and don’t touch the button”. What happened was that even though most people didn’t press the button, just giving them the option to meant that they rated the noise as much less annoying. Just having the agency, the control, the possibility of turning off the noise – even though they didn’t use it – was psychologically important to them.

A great study on this was done recently by Cass Sunstein, a Harvard Law Professor who many of you will have heard of as the king of “Nudges”. In fact, he wrote a book called Nudge with the University of Chicago economist Richard Thaler all about how tiny nudges can influence behaviour. In this study, people did a computerised gambling task. And they could either do it themselves, or pay a small amount of money to a computer algorithm advisor that would make the choices for them, and that had a certain guaranteed success rate. What happened was that even when participants knew that they would win more money by delegating the gambling task – even when they knew that the algorithm had a much better success rate than they did – most didn’t delegate. They preferred to make the decisions themselves, even when it in effect COST them money to do so.

The lesson for you own site is to give customers control over every aspect of the purchase decision. For example, we’ve all seen those websites where you have to buy the produce before the site even starts talking about possible delivery dates – you have no control over it at all. On the other hand, there are some sites where you can choose a delivery slot that suits you from very early on in the process. And remember the lesson from the noise study. Even if people don’t in fact care about a particular date, they enjoy the experience of agency of being in control, and will even PAY money for it. So, if you want to increase your online sales, make sure your website puts the customer in the driving seat.

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