In 2016, middle-income households spent 13.1% of their income on food. The lowest income households spent 32.6% of their income on food. That’s almost as much as most Americans spend on housing. Given this high cost, people want to reduce their food expenditures. In both our qualitative and quantitative studies, when we ask people where they could cut their expenses, most respondents cited their food expenses. To help consumers reduce their food expenses, we partnered with CoinFlip, a company that allows users to link their grocery discounts to their grocery loyalty cards.
Behavioral Diagnosis and Key Insights
CoinFlip was still in beta mode when we launched our partnership. Thus, we wanted to inform their communication strategy from a behavioral perspective straight from the onset. After analyzing their initial mocks and sign-up flow, we realized that we needed to give potential users a reason to sign-up. Grocery discounts are not that exciting. Thus, we knew we needed to amplify the perceived salience of the ask.
We conducted an email experiment with one of CoinFlip’s partners, a national nonproﬁt that provides beneﬁts and discounts to its members across a number of grocery stores. Instead of clipping coupons, members can just sign up for CoinFlip and digitally link the discounts provided by Coinflip’s partners to their grocery loyalty cards.
We tested whether changing the call-to-action button on the marketing emails from “Sign Up” to “Claim” would increase sign-up rates. From a behavioral perspective, “claim” highlights both a sense of scarcity (other people are claiming this limited resource) and ownership (this resource is mine). Thus, it pulls both on social proof and the endowment effect. Our “sign up” served as our control condition and our “claim” email served as our experimental condition.
We emailed over 195,000 discount provider members and saw signiﬁcant differences in engagement between our “sign up” and “claim” emails. Our “claim” condition increased open rates by 19% from 26% to 31%. The “claim” condition also increased click-through rates by 30% from 11% to 14%. Our experiment led to an additional 114 sign-ups over the control, increasing sign-up rates by 28% over the control.
Our work had a signiﬁcant impact on how CoinFlip views their value proposition. As a result, we helped CoinFlip redesign the calls to action on their emails, sign-up flow, and landing pages.
The endowment effect is now a central part of their messaging. CoinFlip boasts over 125,000 users, all of whom have gone through our updated sign-up flow and marketing materials.