Cognitive Design

Imagine surfing online and running into a banner that reads “click now to contribute $1 to your nest egg. It will more that triple by your retirement age!”.  A buck and a click now for three bucks when I am old, sounds a bit boring. Would I do it?  I asked that to a group of 20 middle-age surfers (45 – 55) and 85% said yes.  They also wanted a widget to track contributions, projected returns and performance relative to others (friends) that are using from this surf-and-save offering.

Once you used surf-and-save for a while the pull to save impulsively will magnify.  For example, the widget would use historical data (online behavior) and your profile to illustrate the financial impact of saving a $1.5 instead of $1.  This could be big money if you spend considerable time online and don’t plan to retire soon. Plus it would likely let you zoom ahead of your friends!

A prototype of surf-and-save does not require a major investment. It would be interesting to find the online contexts and widget behaviors that produced the greatest conversion rates for saving impulsively.

Why can’t  savings be like experience points in social games? Millions of people spend hours a week in online virtual worlds (e.g. World of Warcraft) earning experience points so they can upgrade their avatar, buy virtual goods or enter a new region of the game. Why not use the same mechanism to save real dollars for retirement?

We are already spending a billion real dollars for virtual goods and sponsors are giving virtual dollars to online citizens willing to do simple tasks such as watching videos and completing quizzes. The virtual and real economies are colliding.   Being online means the cost of doing simple financial transactions approaches zero. This means saving a little impulsive many times can be done cost effectively.

What we need are retirement products for online worlds that enable impulsive savings behaviors in way that is grounded in social game play and integrated with real financial accounts.  Perhaps online citizens would happily live in a product branded version of their favorite virtual worlds if they knew the commercials were building their retirement account.

This can be tested by coding an overlay that brands a popular online world and monetized by selling advertising.  Online citizens would download the overlay and suddenly see branded virtual objects – Nike shoes, Winchester weapons, rivers of Ice Mountain bottled water – landscapes with billboard running real ads and so on.  Good design means including only the relevant brands in a natural or non-intrusive way. Nike already has a cool web service  that lets you configure highly customized tennis shoes. Imagine linking that to avatar creation in the online world. This would be a fun way for online citizens to cross the real-virtual economic barrier and get value on both sides. I could even put a virtual world emblem on my real world tennis shoes.  Would Nike donate 1% of a shoe sale to my retirement account?

Another route would be to develop Ad-vatars where popular players get corporate sponsors and their avatars wear branded clothing and bling! A bit like race car drivers.

Care would also need to be taken to display information about actual, forecasted and peer-compared retirement account values to show a compelling contribution to my real nest egg. Just as with surf-and-save once there was historical data the numbers could be significant.

Or imagine building a new virtual world, call it Money World, where social game play is dedicated directly to buying, selling, trading and otherwise interacting with financial products.  Something that captures the excitement of day-trading, entrepreneurial risk or even gambling but linked to building your retirement account in the real world.  Game play could be dynamically updated using real-time data and news feeds from real markets.  Everyone would have a chance to get rich because 5% of the monthly subscription fee online citizens pay to get into Money World would be offered as a prize to the team that first completes a mission designed stimulate savings.

Surf-and-Save, Money World and real retirement products for virtual worlds are technological possible. Can they be designed, priced and implemented to meaningfully build the real retirement accounts of online citizens and deliver a robust real dollar return for the entrepreneurs that offer them? I believe so.

This entry was posted on Thursday, August 12th, 2010 at 1:21 pm and is filed under Behavior Change, Behavioral Finance, Cognitive Bias, Examples. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.