A software company made a simple change and doubled its revenue.
It happened as a result of a day of consulting that Andy Brice spent with James Wang on Wang’s SQL Pretty Printer software. Andy is a software developer in the UK and occasionally consults to other software companies.
One of his recommendations was that Wang prominently display the name of the licensed user in order to reduce casual sharing of Wang’s software.
It took a week for Wang to modify the licensing system to support Brice’s recommendation.
Honest people cheat (but only a little)
What can we learn about customer behavior from Brice and Wang’s social solution to casual
theft sharing of software?
Dan Ariely has studied why we are dishonest. Let’s see what he can teach us.
Ariely asked a group of Harvard students to take a multiple-choice test on general knowledge (For example “What is the longest river in the world?”). They had fifteen minutes to answer the questions and transfer their answer to a scoring sheet. They submitted their answer sheet and the scoring sheet to a proctor who would give them 10 cents for each correct answer.
In this control group the average score was 32.6 correct answers out of 50 questions.
Ariely then modified the rules of the test in ways that allowed the students to cheat.
In the second group, the students could see the correct answers when they transferred their answers to the scoring sheet. An easy opportunity to cheat.
The students in the third group not only could see the correct answers on the bubble chart, they were also told to shred their original worksheet and only hand the proctor the scoring sheet. Even easier to cheat.
And finally, the third group was told to shred both answer sheet and scoring sheet. They then simply withdrew from a jar of money at the front of the room their earnings according to their “score” and leave the test room.
Would the students cheat when given the opportunity? Would they cheat more as the possibility of being caught decreased?
It turns out that, yes, they cheated. But only a litte. And they didn’t cheat more as the risk decreased.
Condition 1 Control = 32.6
Condition 2 Self-check = 36.2
Condition 3 Self-check + shredding = 35.9
Condition 4 Self-check + shredding + money jar = 36.1
All three of the experimental groups had an average score that was about 10% greater than the average score of the control group. They all cheated, but only a little.
The level of cheating did not increase as Ariely lowered the risk of being caught.
What can we conclude about these results?
When presented with the opportunity to be dishonest over small matters, we will. But as Ariely observes, “…even when we have no chance of getting caught, we still don’t become wildly dishonest.”
Now, you might be thinking, what do you expect from those Harvard students? (I’m looking at you, Yale.) Ariely repeated this experiment with similar results using students from MIT, Princeton, UCLA, and Yale.
What about a technical fix for casual sharing?
Ok, most people will cheat if given the opportunity. And they will only cheat a little, no matter how easy it is to avoid getting caught.
What options are open to a software company that wants to reduce cheating through casual sharing of its product?
It could use a technical solution to solve the problem. For example, it could deploy hardware-locked licensing.
But this method (and others like it) have some disadvantages:
- You have to re-issue keys when someone switches to a different computer.
- The licensing software could trigger malware alerts.
- This method introduces a dependency that could go wrong and cause headaches for the customer and for your technical support.
Reduce cheating through behavior change
Since we know that many people will cheat if given the opportunity, but only a “little bit,” what might cause the prominent display of the licensed user to reduce casual sharing, or “cheating?”
Most people are honest most of the time. In surveys people report that it’s important to be honest. Honesty makes us feel good.
Then why are we likely to be a little dishonest when presented with the opportunity?
Dan Ariely speculates:
This is my take. We care about honesty and we want to be honest. The problem is that our internal honesty monitor is active only when we contemplate big transgressions, like grabbing an entire box of pens from the conference hall. For the little transgressions, like taking a single pen or two pens, we don’t even consider how these actions would reflect on our honesty and so our superego stays asleep.
What might cause to people to stay honest when presented with an opportunity to cheat “just a little?”
In another experiment, Ariely found that if people simply tried to remember the ten commandments they were less likely to cheat. And in yet another, participants who signed their name to a statement agreeing to the school’s honor code did not cheat. In both cases, simply being reminded of morality at the moment they are tempted, they were more likely to be honest.
Perhaps when people see another person’s name prominently displayed on the top of their screen they are reminded that they intended to buy the software once they had used it on a “trial basis.” Or perhaps they imagine the conflicting feelings they would experience if they had to explain the discrepancy to another person.
In any case, kudos to Andy Brice for making the suggestion and congratulations to James Wang for the sales increase from the week he invested to change the licensing system.
Photo Credit: John H. Kim