How we helped Taxify grow in the Slovak Market (before Uber was banned)
How loss aversion, social proof, and the endowment effect are helping Taxify grow in the Slovak market
When Taxify launched on the Slovak market in, people were quite familiar with alternatives to classic cabs – with the likes of Uber and Hopin. There is a positive in that familiarity, but it’s also a challenge to break into a market which those players. Taxify successfully established itself, and the number of customers and drivers on the books was growing. But Taxify wanted to see what potential there was to up their game.
Taxify invited MINDWORX to help out. Our goal was to increase the effectiveness of online advertising aimed at potential drivers. We needed to get more of the right people to click on Taxify ads. And that´s exactly what we did – conversions have risen dramatically. In some cases by more than 50%.
How we approached this task
MINDWORX is not an advertising agency. Our approach to creating ads is different. We took a close look at the psychology of potential drivers. Many drivers work other jobs also, and it’s always tempting to put your feet up after work. We contemplated – what could win people over to this opportunity? And which principles of behavioral economics could we implement in the communication? We also examined the success of previous advertising campaigns so we were armed with the knowledge of which ads worked best in the past and what to avoid.
We invited experienced copywriters to help us incorporate behavioral principles. We put our ads to the test against the original ads – there’s no arguing with data that shows more clicks and more conversions. Our solutions
In one ad we tweaked the text you see in the image below. From the original “Make €60 an evening” to “Make an extra €60 per evening”. It feels like more money in your pocket. And it’s the first jigsaw piece in putting to work the principle of loss aversion. The principle of loss aversion is effective in advertising because the pain of loss is psychologically about twice as powerful as the pleasure of gain.
We replaced the text in the original paragraph with the simple question, “Would you rather sit at home in the evening or easily make an extra €60?” This framing evokes the sense of loss the viewer would feel if he or she doesn’t take the opportunity to drive and earn. And the word ‘easily’ helps the choice feel like a no brainer.
The ad was also supported by social proof beside the Sign-up button. Social proof is the principle that people very often decide in accordance to what other people do or say. In this case, “Already hundreds of drivers in Bratislava.” This ad proved to be 54% more effective than the original one.
The endowment effect
In the most effective version of the ad, we didn't change the main paragraph much. It’s tempting for many in advertising to ‘throw out the baby with the bath water’. We kept the good stuff – the benefits of driving for Taxify. We simply focused it around principles of consumer behavior, and gave it more resonance. Here we tweaked the statement around average monthly income:
We put to work the endowment effect. The endowment effect is the principle that people appreciate more the things they already own. And sometimes just the fantasy of ownership is enough. So how do we create the fantasy that people already own that extra €750? With the simple question:
“How would you use the extra 750€ per month?”
When people start imagining what they will do with the extra money, they identify with the idea that they already own it – they don’t want to lose it. This change brought an increase in conversions of up to 57%.
Those are just some of the changes we made. Behavioral insights in combination with smart copywriting, makes for more effective advertising. More people clicked these ads, and they brought Taxify more registered drivers. In three cases, increasing conversions by more than 50%. Small changes can have a dramatic effect on the performance of marketing campaigns, and on business.