Example
Hypothetical Choice Tasks: Subjects were given a hypothetical choice task in the following "neutral" version, in which no status quo was defined: "You are a serious reader of the financial pages but until recently you have had few funds to invest. That is when you inherited a large sum of money from your great-uncle. You are considering different portfolios. Your choices are to invest in: a moderate-risk company, a high-risk company, treasury bills, municipal bonds." Other subjects were presented with the same problem but with one of the options designated as the status quo. In this case, the opening passage continued: "A significant portion of this portfolio is invested in a moderate risk company . . . (The tax and broker commission consequences of any changes are insignificant.)" The result was that an alternative became much more popular when it was designated as the status quo.
Electric Power Consumers: California electric power consumers were asked about their preferences regarding trade-offs between service reliability and rates. The respondents fell into two groups, one with much more reliable service than the other. Each group was asked to state a preference among six combinations of reliability and rates, with one of the combinations designated as the status quo. A strong bias to the status quo was observed. Of those in the high-reliability group, 60.2 percent chose the status quo, whereas a mere 5.7 percent chose the low-reliability option that the other group had been experiencing, despite its lower rates. Similarly, of those in the low reliability group, 58.3 chose their low-reliability status quo, and only 5.8 chose the high-reliability option.
Automotive Insurance Consumers and Other Examples: The US states of New Jersey and Pennsylvania inadvertently ran a real-life experiment providing evidence of status quo bias in the early 1990s. As part of tort law reform programs, citizens were offered two options for their automotive insurance: an expensive option giving them full right to sue and a less expensive option with restricted rights to sue. In New Jersey the cheaper option was the default and most citizens selected it. Only a minority chose the cheaper option in Pennsylvania, where the more expensive option was the default. Similar effects have been shown for contributions to retirement plans, choice of internet privacy policies and the decision to become an organ donor.
People tend to be apprehensive of change, so we tend to make choices that will cause as little upheaval to our lives as possible. People stick with bad service for years at institutions such as banks, as they think it would be too difficult to move accounts. They also stick to their preferred meals when eating out, thinking it’s better to stick with what you know, or that it’s better to be safe, than sorry.
The Magic Trick
To use the status quo bias on your visitors in order to hopefully drive more conversions, never force changes on your customers unless it absolutely necessary, and then if you do make changes, make the transition as painless as possible. Never overload them with decisions. The more decisions someone has to make, the less likely they are to make them. If every time someone enters your site they have to decide which product to buy, what shipping they want, how they want it wrapped, where they want it sent, which card they are going to use … they will simply abandon the purchasing journey as too complicated.
9 ways
The only problem is that the status quo bias costs us money all the time. Because we prefer to stick with the familiar, we often choose to stick with things that are less cost-effective than the alternative. Here are nine common ways that status quo bias can cost an average person money.
1. Taking the same route to work you’ve always taken. Usually, the route to work you’ve always taken is not the most optimal one, so you’re losing cash every day simply because it’s a “risk” to try to find a better path.
2. Sticking with your old bank. If you’re getting hit with ATM fees, no interest on the checking account, and less than 1% interest on the savings account (as many people are), then your bank is gouging you. Sure, it’s convenient to stay put – you don’t have to spend a half an hour switching to a new bank – but is it worth twenty dollar bills leaking out of your pocket each month?
3. Always going to the same old grocery store. Instead of using a basic price book to actually figure out which store is the cheapest for what they buy, most people just get familiar with one store and do all of their shopping there. Even for me this is difficult – I’m trying to transition to using the much-cheaper Fareway as my primary grocery, but my natural instinct is to continue to shop at the more expensive Hy-Vee.
4. Repeatedly going out for slight variations on the same old “night on the town.” Dinner at an expensive restaurant with friends once a week adds up big time, as does a drink twice a week after work with “the gang.” They’re repeated activities that repeatedly swallow money from your pocket.
5. Stopping at the coffee shop for the daily “pick me up.” This is a routine mixed with a physical addiction to caffeine, bringing not only the status quo bias to the table, but a chemical reliance problem as well.
6. Buying the same version of the same product over and over. When you walk down the grocery aisle and buy the same version of the same item without really thinking about it, the status quo bias is at work.
7. Staying in the same house instead of looking for housing alternatives. It’s much easier to keep paying extra for your current housing than it is to look for a new place to live that might be much cheaper.
8. Keeping the same cable or satellite service. There’s a reason the cable and satellite companies offer amazing introductory deals, but their standard price after a year is really high. They know about the status quo bias.
9. Keeping the same cell phone service. Similar to the cable or satellite service, cell phone companies offer great introductory deals because they know it’s likely you’ll just stick with what you’ve got.
Fighting the Status Quo Bias
The solution to fighting the status quo bias is simple. Each week, try something new. Try a new route to work. Try finding a cheaper coffee place. Look at other options for your cable service. Do something completely different for your after-work recreation. Go to a new grocery store and see if the prices are better.
One little change, every week. Focus on repeating that change a few times without reverting back to your old path. See if it suits you and, if the old path is actually better, go back to it. Then, during the following week, seek another new routine.
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