TLDR: WATCH THE VIDEO (click above)
Picture yourself looking at your phone bill, realizing you could be saving money with a new plan. But instead of switching, you put your phone away and forget about it.
Sound familiar? This inertia is a classic example of status quo bias, where the comfort of the familiar outweighs our drive to seek better options. We don't do this out of laziness; it's deeply rooted in our psychological resistance to potential loss. 😨
Verizon (and most phone plans) know this. It's why they're better than most at getting us to switch plans. If you’re a startup, listen up. You likely need to get your potential users to ditch their status quo and make a leap.
Today we go over three psychological barriers to switching and the three clever things Verizon does to get us to overcome them and change phone plans and (and of course, what we can learn from this)!
Let's get dialed in.
1️⃣ Present bias. Mitigation: Free phones
Our resistance to change is deep-seated. To overcome it, we need a strong incentive. Verizon knows this. What better reward to feed our present bias than the latest-model phone? The shiny object makes the immediate benefit tangible and hard to resist—and makes the long-term commitment seem less daunting.
It's an effective strategy that taps into our desire for instant gratification. How do they manage to give away a phone without going broke? They give you the phone only if you agree to a long term contract.
2️⃣ Risk aversion. Mitigation: The safety net of 'unlimited'
How to combat users’ loss aversion when trying to get them to make a change? Verizon is strategic with its choice of words, offering an ‘Unlimited’ plan. This has a lot of appeal; the promise of 'unlimited' data taps into our Risk Aversion, as it eases our fears of hidden charges.
There are even Unlimited Ultimate and Unlimited Plus plans. There’s no limit to the lack of limits!
Note: this is not typically a good deal for consumers. Plans can offer unlimited because they know you won’t use that much data. If you’re looking to save money, avoid this.
3️⃣ Status quo. Mitigation: Keep your number
Change often feels like a trade-off where you might lose something valuable—in this case, your phone number.
I like my 608 number and don’t want to give it up; it’s almost like part of my identity. Verizon cuts through this fear by guaranteeing that you can keep your number and phone. They’re directly addressing and tackling loss aversion—a critical factor in getting users to adopt a new plan. 📲
Reviewing Verizon’s strategies, it’s clear that they’ve covered all of the 3B’s: they’ve 1) identified a key behavior (new long term contracts), 2) increased the benefits, and 3) reduced some of the barriers to change. It’s a highly effective one-two punch—and food for thought that maybe we all could use a push now and then to embrace something new. 🆕
Key insights from the teardown
💡 How highlighting immediate benefits can motivate users to make a change
💡 How to frame options to emphasize gains over losses
💡 Why you should address user fears upfront
Let’s talk: Have there been moments when a clear benefit or a reassuring promise helped you make a switch? Share your story below—and join me next week for another dive into how understanding human behavior helps shape better products and service. 👋
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Questions about your product? Email kristen@irrationallabs.com.
Want to increase conversion, retention, engagement? Reach out to Irrational Labs.
We design products that change behavior, using behavioral science. Check out our case studies to see it in action.
What startups can learn from Verizon