What the game mechanics of Cookie Clicker can teach us

You’ll learn about the

• Workings of incremental game Cookie Clicker
• Behaviors that make it so addictive
• Implications for your own loyalty strategy
• Ideas that’ll set your future loyalty program apart from the rest

What’s Cookie Clicker?

Cookie Clicker is known as an ‘incremental game’: where the main focus is to make a number go up over time.

Sounds simple, but this new genre has been incredibly popular online, spawning a fast-growing community on reddit. Just 10 days after launch on cultural messageboard 4chan, it had more than 200,000 players per day.

How do you play it?

It’s simple:

• Click the cookie (effort) and you get more cookies (reward)
• Spend your cookies on upgrades to help you earn even more
• Achievements are given for reaching key milestones
• Tiers are unlocked as you progress, allowing for faster / bigger rewards

Similarities to loyalty

Cookie Clicker is similar to the basic workings of a loyalty program — put effort in over time and get rewarded.

But what are the underlying behavioural mechanics that make this game specifically so addictive, and how can you learn from its success to boost engagement with your own loyalty system?

CogLode recommends…

1. Make loyalty incremental

One of the key things making Cookie Clicker so addictive is its incremental system, where the main focus is to make a number go up over time, both actively and passively.

How an incremental system works

1. Click the button to receive a number that increments with each click.
2. Automatic-clicker upgrades become available for the cost of a number of clicks.
3. Earning you automatic clicks per second on top of your manual clicks.
4. So now progress is always being made towards the next upgrade goal, even when idle.

This incremental mechanic is incredibly addictive, because your past actions have a sustained, exponential impact on your current progress and future rewards. You’re propelled ever-further forwards, compelling you to repeatedly engage with the system.

A lot of time was spent by the creator of Cookie Clicker to achieve the optimal balance between upgrades & rewards, and the passive time and active effort required to reach them, resulting in a sustained engagement with the system.

Crucially, as members earn more points and gain a higher multiplier, the cost of unlocking further rewards goes up proportionately, safeguarding the profitability of the system.

“The smartest loyalty programmes of the future will reward both active and passive engagement with the brand.”

Underlying research

Skinner Box — Our behavior can be shaped by rewarding simple tasks

Goal Gradient Effect 💎 — The closer we are to a goal, the more effort we make to reach it

Endowed Progress Effect — Artificial advancement towards a goal increases our efforts to reach it

Decision-makers should

Understand the potential of incremental mechanics to create a compelling feeling of constant progress within your loyalty system.

See this as a very powerful tool to motivate active users to motivate active users to achieve higher goals faster, whilst simultaneously re-engaging currently inactive consumers with passive progress. To protect the incremental spending structure, further spending is needed to accelerate towards future rewards in any feasible amount of time. This avoids consecutive rewards being unlocked passively with no spending.

Engage your Innovation Team and have them use existing incremental game resources to prototype a simple sandboxed incremental loyalty system. Work alongside them to iterate the system, points, rewards and tiers.

Get your cost scaling right in order to keep a profitable balance of cost-effective reward redemption and loyalty member engagement over the longer term. ⚖

Hire a freelance Quantitative Analyst or ‘Quant’, have them look at Polynomial and Exponential cost scaling. Ask them to report back on how you might adapt your existing loyalty system to become incremental.

Realise that the smartest future loyalty programmes will reward for both active and passive engagement with the brand. The former will fuel the latter, which will itself fuel the former, creating a beautifully-cyclical addictive brand attachment that rewards customers for early adoption and always eventually brings them back for more.

Incremental Loyalty is a new concept that we have identified and briefly introduced here. We look forward to documenting and discussing it in much more detail in the future.

2. Build in spontaneous rewards

At seemingly random and rare intervals on Cookie Clicker, a giant cookie appears on-screen for a short while, before disappearing. Clicking on this cookie unleashes a special state: the screen goes gold and everything visually intensifies, creating a temporarily-heightened experience.

It’s a thrilling endorphin rush. ✨🙌✨

From a reward perspective, during this set period of time, the number of points created is dramatically increased, allowing for significant progress to be immediately made towards achieving the next goal.

There is also a rare concept in the game called the Cookie Chain, where cookies appear for a very short period on-screen. Clicking them in succession leads to a wealth of points created. Not clicking the latest cookie before it disappears breaks the chain. This gets increasingly harder as you progress, but the points are increasingly plentiful.

Underlying research

Variable rewards — we most positively anticipate treats of random value

Limited Duration — we are driven to act when constrained by time

Lucky Loyalty Effect 💎 — we incorrectly assume that more money spent with a brand leads to a greater chance of receiving a random gift

Decision-makers should:

Create random, personalised and meaningful incentives to help members progress up your loyalty spectrum, accelerating their points growth for a set period of time.

Disclose scarce offers to a subset of customers. Work in particularly-rare, attractive rewards into your system, limit and expose the number on offer and communicate amongst customer batches via your CRM. Exposing the scarcity of the offer triggers a competitive mechanic that compels us to take action and ‘win’.

Bind specific rewards to a particular strategic context you’re trying to nudge. For instance, if you want to motivate higher footfall in-store, trigger a rare reward that’s pushed to the user’s device only when connected to the store WiFi or within GPS range, potentially after a given period of time.

Hold back on a too-aggressive push notifications campaign or you’ll annoy customers. Preserve them for rare rewards and those with higher prior campaign engagement.

Add more random promotions for higher tiers. The Lucky Loyalty Effect states that members feel more likely to receive such a reward as they spend more money with you. Therefore, they’ll feel more likely to win and be more likely to engage with such promotions than other customer segments.

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3. Provide personalisation with a Loyalty Tree

The Cookie Clicker system offers multiple tiers and upgrades, disclosed and sequentially unlocked by the number of cookies that you have.

To limit distraction and prevent overwhelming users, only the next few tiers are shown. This keeps the player focused on their current goal and creates a sense of curiosity about what might be next.

The next tier is structured so that it’s the only realistically accessible tier to unlock. For instance, the third tier requires points of a magnitude larger to unlock. The great thing is that unlocking the tiers allows for points to be created more quickly, accelerating you ever-faster towards the next tier.

However, along with these tiers, Upgrades offer a number of ways you can choose to spend your points.

This part of the points redemption system is open to player choice and preference. What they choose will sculpt their experience within the system.

Underlying research

Ikea Effect 💎 — We place disproportionately-high value on self-made products and experiences

Progressive Disclosure — We prefer being shown complex ideas in steps

Curiosity — We have a deep-seated motivation to know more…

Decision-makers should

Give users a choice of their path of progression within the loyalty system. Everyone is unique and will enjoy different rewards or engage in different ways, so create a uniqueness to each member’s loyalty program. Waitrose — a leading UK supermarket — have started to do this with their Pick Your Own Offers loyalty feature on particular products, but it could be taken beyond product choice and to higher brand-level rewards.

Create a sequential unlocking of loyalty benefits at each tier based on a simple preference for either A or B; not too much choice to overwhelm, but enough so that it allows for individual preferences to be made.

Choice is good for cost management. Knowing that members will have to choose between A and B means that you can add more benefits to the system but at the same time not worry about the cost implications.

Disclose tiers relative to member progress, so as to get the balance of offering aspirational next steps but not too many steps so as to overwhelm. Two tiers above, max.

Know that this is more suited to advanced loyalty programs (supermarket / multi-vendor) where the rewards system offers a wider variety of possible outcomes — less so for a small coffee shop.

4. Protect earned status

There is no concept of penalties within the Cookie Clicker system. You’re always moving forward — an immensely-positive feeling. Crucially, it’s just by how fast, that’s all…

Supporting research

Negativity Bias 💎 — We’re more affected by the bad than the good

Loss Aversion — We feel more pain from losses than joy from equal gains

Sunk Cost Effect 💎 — We’re reluctant to pull out of something we’ve put effort into

Decision-makers should

Refrain from taking away earned status from loyal customers. A good example of this is with British Airways’ Executive Club. Currently, if you don’t spend above a certain threshold by a certain time, you’re knocked back down to a lower tier. Penalising customers with a growing sense of loyalty to your brand is dangerous, and you’re at risk of losing them if you create this negative experience.

Brands will have to work much harder to win the customer back, as the relationship falls back to one that’s based purely on future, now-less-likely transactions. A loss for both the company and the individual.

Create a system that is biased towards the positive. Simply, instead of penalising, speed up progress for the fully-engaged, and slow it down for those less so.

Streak. Layer a streak mechanic on top of (not replacing) your program to reward consecutive periods of spending. Use this to allow accelerated points earnings, motivating repeated spending. Some loss aversion may occur as a steak ends, but nowhere near that felt with a tier loss.

5. Share in a higher purpose

In the latter stages of Cookie Clicker, you can give it all up, cashing in all your efforts for a higher-level experience. Your contribution is converted into ‘prestige chips’, capable of unlocking new features and dramatically changing both your next play and attachment to the system.

Underlying research

Noble Edge Effect 💎 — products of caring firms are seen as superior

Entourage Effect 💎 — VIPs feel greater status when their rewards are shareable

Trivialisation Effect 💎 — We prefer a thank-you over a small monetary reward

Decision-makers should

Know that offering customers a special ability to be altruistic with their earned rewards is a powerful way to bring a deeper sense of meaning to their loyalty.

“Use loyalty to create a connection that transcends from the solely transactional to the ideological.”

Offer Points With A Purpose. Allow the ability to donate points to a company-defined cause, combined with a reciprocity pledge from your company to match the contribution. Along with felt goodwill, this binds the member to the same shared goals as your company, creating a connection that transcends from solely transactional to ideological, fostering a much deeper sense of loyalty.

Reward digital effort with physical appreciation. On the back of their contribution, members could then be invited to a special private event to update and thank contributors — a positively-human, multi-sensory, memorable reward.

Allow higher tiers to share their rewards amongst friends. New research shows that doing so elevates their sense of felt status.

Wrapping up…

A wise decision-maker in the tech industry once reminded me:

“Where there are numbers, there are games…”

…and this statement’s never been more true than with Cookie Clicker. Such a simple game, but full of so much that businesses can learn from.

But the notion of ‘gamification’ is old now. Such a term makes your writer as uncomfortable as when ‘Augmented Reality’ and ‘QR codes’ are mentioned 😭 😭 😭. Using it risks prematurely resigning a wealth of rich behavioural insights — that we’re only just starting to elegantly transfer into other industries — to the Buzzword Graveyard. AR, QR, rest your souls…

The games industry, however, is so far ahead in terms of understanding emotion and decision-making — compelling us to act and keep investing effort into their systems — that we’d do well to pay closer attention to how they do it.

This post just skims the surface of these incredibly rich learnings, so we look forward to saying a lot more about them in the future.

CL

Originally published on CogLode — Brain Gems for Decision-Makers.

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Introducing the wonderful world of Reserved Product Pricing (RPP)

This article is taken from the CogLode Newsletter. Subscribe here.

You’ll learn how to

• Implement new research on how best to sell multiple products
• Prevent unnecessary lowering of your product price
• Hide discounted offers to non-purchasers
• Combine profit maximisation with a personalised consumer experience

The problem

Dear Coglode,

I’m the CMO of a successful startup that sells a handful of our own physical products online. We have one product right now, and we’re launching a second soon. We’re wondering how best to position our second product alongside it, as we don’t want to cannibalise sales in the process. Is there any research that best shows us how to do this?

Thanks,

The Solution

Dear Decision-Maker,

Firstly, thank you for getting in touch. Second, let me reassure you that your problem is a common one, but that there indeed is research that offers guidance on how to continue your successes once you launch your second product.

Let me introduce to you some recent research by Prasad, Venkatesh and Mahajan (2014) that focuses on how best to sell multiple products to a single customer.

Conventional wisdom suggests that you should simply allow your dear customer to buy both products at the same time on your site, offering a discount if indeed they choose said bundle. An example of this is below, with books both available to purchase separately for $20, and available together for $35.

However, this new research suggests that there is a better way of positioning and optimising sales of multiple products. It’s called Reserved Product Pricing (RPP), and it’s pretty cool. Here’s why…

Potential benefits of Reserved Product Pricing

1. Maximisation of profits from multiple product sales
2. Prevention of prematurely-devalued product price
3. Aids loyalty and return purchases through preferential hidden pricing
4. Effective use of personalised offers based on a first stage purchase

How it works

1. In a nutshell, RPP involves you offering a later discount on product 2 to a customer who buys product 1.
2. No discounts are shown on the site and are only disclosed to customers who first successfully make a purchase.
3. They are then granted the opportunity to purchase product 2 at this discounted rate.
4. Subject to the conditions below, the research shows that this pricing strategy has been found to be more profitable than offering customers a buy-both-now discounted bundle on your site.

To conclude, RPP is an awesome blend of time-based pricing and cross-selling. Customers can’t get the discount by waiting; the offer is only triggered after they buy a related product at its regular price.

How to do it

1. On your product page, don’t offer a second product to buy at the same time for a bundled discount.

2. Instead, once the sale and delivery of product 1 has been successful, send a time-sensitive follow-up thank you email.

3. In this personalised email, highlight the sale of product 1, now offering product 2 at a reduced cost from that seen on the site.

4. Add in a time-scarcity factor, highlighting that the offer can only be redeemed within a small, limited, one-time offer window (optional).

5. Add in social proof recommendation quote of not just the product but of the sequential purchasing narrative (optional).

6. Create a single, distraction-free call-to-action using persuasive copy such as “claim my offer” or “pay less than everyone else” etc

Conditions of use

Suits higher marginal costs

This pricing strategy should be used for products that have a higher marginal cost of production. For example, physical books over eBooks.

Best for short-termist consumers

This pricing strategy works best for near-sighted consumers over strategic, discount-seeking consumers. That said, implementing a strategy of variable and uncertain discounts can help suppress this. It also looks to work best for impulse-driven products where an impatience to buy is relatively high (new gadgets, vacations etc).

Limitations of research

• Doesn’t take into account competitors selling your own product.
• Assumes that you have two products on sale.

Assumptions

That you…

• Are selling your own product
• Have more than one product to sell
• Have a marginal cost that is not extremely low
• Can track customer sales info and personalise email marketing based on these sales

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Reducing information boosts both profits and customers’ choices!

This article is taken from the CogLode Newsletter. Subscribe here.

You’ll learn how to

• Strengthen your price, promotion and user experience​​ by reducing product information
• Improve promotional effectiveness by 73% and reduce customers’ price sensitivity by 19%
• Create a win-win brand strategy that supports both your customers’ goals and your own financial aspirations

The challenge

Dear Coglode,

I’m the CMO of a large grocery chain in the US. What with current concerns around obesity, we’re keenly aware of our responsibility to ensure that we promote healthy habits and decisions with our customers. One of our current initiatives involves looking at rethinking the nutrition labelling across our 350,000 products.

However, it’s not cheap to roll out. Can you provide any evidence of its effectiveness, and also any knock-on impact it might have on other areas, such as sales?

Thanks,

The solution

Dear Decision-Maker,

We can share some exciting new research that shows how effective design-led thinking and a focus on greater simplicity with respect to food labelling can not only nudge healthier in-store choices, but also lead to lower price sensitivity and an increased uptake of promotions.

Let me first provide a little context, highlighting what consumers all face when walking around grocery stores.

Shoppers are confused…

Barry Schwartz, in his brilliant book, The Paradox of Choice, talked of the debilitating amount of mental effort consumers face when given too much product choice in-store.

But such a problem is further compounded by the amount of information shown on each product’s packaging; often we’re given a bewildering amount of data to compute and translate into a single decision.

Research (illustrated below) shows that there are 3 steps taken each time we attempt to make a decision on a food’s nutrition level (Russo et al, 1986).

Yet here’s how nutritional information is currently presented to most US consumers at the moment…

As you can see, there’s an overwhelming amount of competing bits of information that consumers need to Find, Understand and Summarise, in order to make the right decision. It’s no wonder that:

59% of grocery shoppers admit that they find it hard to make sense of the nutritional facts on product packaging — Nielsen, 2012.

Currently, it’s a difficult and time-consuming process (Berning et al. 2008), compounded by the fact that in a grocery store, with low value and a high number of products sold per basket, consumers have to go through this a relatively high number of times.

And this is before any comparisons have been made with other products, quantity, pricing or promotional material!

As a result, we make poor decisions many times over (Hoyer, 1984), can’t cope and ultimately…

We cut corners

We humans are Cognitive Misers (2013), taking mental shortcuts wherever possible. Given this, it’s no surprise that when looking at the front of the pack and seeing attractively-simple terms like so…

…we cut cognitive corners and say “Hey, I’ll go for this one…it’s low on fat”. However, such simplified information is often misleading, misinterpreted and inconsistent across products.

Moreover, consumers end up eating about 50% more unhealthy foods after reading such persuasive words, cancelling out any real nutritional benefits (Wansink and Chandon, 2006).

We crave simplicity!

In a study just released, it was found that nearly all Millennials strongly preferred a simple over a relatively-complex label (Young & McCoy, 2016).

Thankfully, companies are already making moves toward cleaner labels with both The Hershey Company and Nestle announcing new initiatives in 2015.

This resonates well with the Speak-Easy Effect (2007), which says that we more readily trust words (ingredients, brand names etc) that are easy to understand and pronounce.

And this is how things have been…for a long time. Until recently, when a team of independent researchers and industry specialists looked to reduce information and simplify this process for consumers.

Enter NuVal…

How NuVal works…

1. A US nutrition-label system designed in 2008 by a team of scientists and Doctors, headed up by Dr David Katz at Yale University.

2. Distills about 30 of a product’s nutrition variables down to a single, easy-to-understand number between 1–100.

3. A higher number on the NuVal Scale is more nutritional than a lower one.

4. Labels are shown clearly on the shelf for easy reading and quick decision-making.

5. Nutritional comparisons between differing products can be made and thus easily traded up.

To be clear, there are other systems that have been designed, such as the Traffic Light Label over in Europe, and the US-based Guiding Stars system, but this research focuses on the NuVal system.

So, having a single nutritional number for each product ought to reduce cognitive effort when making a food choice, right? Well, NuVal’s “Nutrition made easy” marketing claims can now be put under the spotlight.

New research explores the effects of such a simplified system on product choice and any all-important knock-on effects on sensitivity to price and promotion. Let’s see what it found..

What the research found

The study was carried out on the purchasing data of 535,000 frequent shoppers within a large US grocer [name kept confidential] over a 6-month period.

The introduction of a simplified POS nutrition scoring system has lead shoppers to switch to healthier products across a range of food categories, improving the nutrition content of their purchases by 21.8%.

This is the first time such results have been announced, and they’re incredibly positive for any company looking to nudge strategic positive behavioural change through a process of info simplification and subtle widespread education.

The introduction of NuVal labelling also decreased shoppers’ sensitivity to price changes by 19.4%.

This is an important finding because it shows that consumers place greater relative value on help with making product decisions over a respective increase in price. It also highlights that there’s a real desire from consumers for retailers to fundamentally simplify the choice experience in-store.

Shoppers’ sensitivity to promotions increased by a whopping 73%. This is because, after initially spending some extra cognitive resource on nutritional analysis, consumers don’t require as much cognitive effort on promotions as they do for different prices. Promotions are clearly highlighted in the stores, are easy to spot and can be used to make a quick product choice.

Interestingly, the impact on promotions is weaker in healthier product categories. Researchers suggest that people already driven by health aspirations are less offer-focused, and place more emphasis on choosing the product that best fits their nutritional goals.

I’ve added the fact that the grocery chain experienced an overall increase in sales of the product categories tracked after the NuVal scoring system was implemented here at the end, as the data around by how much wasn’t made clear in the research, and I didn’t want to build this case study around it.

However, it stands to reason that a simpler user experience may also help a company’s bottom line, as well as successfully educating and nudging its consumers down a healthier decision-making path.

Ideas for application

Key Takeaways

For all Decision-Makers

• This research shows the power of simplicity for all businesses. Reducing unnecessary mental effort will aid behavioural change, especially where consumers are already taking their own shortcuts.
• Making this one hard decision to create a gracefully-simple customer journey will prevent complexity for consumers each and every time.

For all Retailers

• The positive impact of an investment in a better-designed labelling system appears worth it given the knock-on effects on sales.
• Consider how your own new labelling model could be used to simplify choice, empower consumers, and reduce the burden on staff.

For Grocers

• Adopt a simpler nutritional label model to reduce unnecessary nutritional complexity and simplify the choice process.
• It’s a win-win model: they get much-needed guidance, and your promotions and prices strengthen.
• Become the first ‘healthy supermarket’, where shoppers feel they can always purchase nutritious food in your stores by using your helpful nutrition rating system.
• The system’s positive results around price sensitivity support higher prices for healthier options.
• If adopting a simpler labelling system, a larger spend on bolder, clearer promotions will be more effective than on greater price cuts.

For Food Producers

• Create more nutritious, healthier variants of your products to stay competitive. Otherwise, the use of the simpler nutrition system will expose your shortcomings…

Limitations

• NuVal’s system has to be licensed from NuVal themselves, incurring licensing costs.
• NuVal’s algorithm model is based on US-centric Governmental guidelines, a bias which would need to be factored in when considering adoption beyond the US.
• The research didn’t specify the type of promotions included within results
• (Buy One Get One Free, Half Price etc), and what that would mean for the impact on choice. Research does show that some promotion offerings provide better justification for purchasing naughty, unhealthy food (Mishra and Mishra, 2011).
• The timing and intensity of marketing and communications strategies may have played a role in the relative effectiveness of the new system. This wasn’t tested.
• Different shopper types (BMI, age, income and so on) weren’t considered. They might offer further understanding of where this design simplification is most powerful. ​

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