Foundations of the Endowed Progress Effect
The car wash experiment that changed loyalty marketing
In 2006, two researchers — Joseph Nunes (USC Marshall) and Xavier Drèze (UCLA Anderson) — published in the Journal of Consumer Research an experiment that would upend the design of loyalty programs.
The field: an automatic car wash. The protocol: 300 loyalty cards distributed to customers, in two versions.
Version A — A card with 8 stamps to collect. Each wash = 1 stamp. On the 8ᵗʰ stamp: free wash. Customers start at 0/8.
Version B — A card with 10 stamps to collect, of which 2 are already stamped when handed out. Customers thus start at 2/10.
In both cases, the customer must perform exactly 8 washes to obtain the free wash. The objective effort is identical. Economically, the two cards are strictly equivalent.
Result: 19 % of group A customers completed their card. 34 % of group B customers completed theirs.
Almost twice the completion rate, for rigorously identical real effort. The only difference? Group B customers had the impression of having already started.
This is what Nunes and Drèze named the endowed progress effect.
Rigorous definition
The endowed progress effect is the phenomenon by which artificially granted progress toward a goal increases the likelihood and speed at which an individual will reach that goal — even though the amount of real effort required is unchanged, or even greater.
In other words: if you tell someone "You have to do 8 actions," they will do fewer of them than if you say "You have to do 10 actions, but I've done 2 for you."
The effect rests on three psychological levers (detailed in chapter 2):
- A shift in reference point — You're no longer "at zero," you're "already engaged."
- Behavioral consistency — You're already at 2/10, so you're "the kind of person" who collects this card.
- Acceleration near the goal (goal gradient) — The closer you get, the faster you go. Starting at 2/10 = being closer to the goal than starting at 0/8.
What it is NOT (to avoid confusion)
Endowed progress is often confused with related biases. Distinctions matter.
| Phenomenon | Difference from endowed progress |
|---|---|
| Goal-gradient (Hull, 1934) | Goal-gradient explains why we accelerate near the goal. Endowed progress is a strategic application: artificially creating the feeling of being closer to the goal. |
| Sunk cost | Sunk cost concerns past and real expenditure. Endowed progress works even when the user has spent nothing — it's the perception of progress, not the investment, that drives the effect. |
| IKEA Effect | The IKEA effect assigns more value to things we built ourselves. Endowed progress works before the user has done anything — it's the head start offered by someone else that triggers initial engagement. |
| Endowment effect | The endowment effect (Thaler) makes us value what we own more. Endowed progress is a variant: we value more the goal toward which we have already progressed. |
| Commitment & consistency (Cialdini) | Cialdini describes why an initial small yes leads to a bigger yes. Endowed progress is a mechanism to seed that initial commitment: we offer the first implicit yes. |
Why it matters for sales, SaaS and modern entrepreneurship
The endowed progress effect is not an academic curiosity. It is the foundational brick of nearly every product onboarding that converts above 60 %.
Case 1 — LinkedIn and its "profile completeness"
When you create a LinkedIn account, you don't land at 0 %. The platform credits you with 25-30 % profile completion simply because you've filled in your name, email and headline. You're hooked. You want to see 100 %. You fill in everything.
Case 2 — Duolingo and the streak flame
On signup, Duolingo shows you a "flame to maintain." First lesson = flame at 1. But the animation is so present, so rewarding, that you feel you've already invested in that flame by the end of your first exercise. The more you progress, the more "breaking the streak" becomes psychologically expensive.
Case 3 — Notion, Linear, Airtable
The best B2B SaaS now open with a workspace pre-filled with templates, example databases, onboarding checklists. You no longer land in an empty field. You land in an environment that is already partially yours. You start at 30 %, not at 0 %.
Case 4 — Starbucks Rewards
New sign-ups receive a welcome bonus of 25 stars on a card that needs 200 for the next tier. Strange? No. Without those 25 free stars, completion of the tier would drop significantly.
Case 5 — B2B "ROI calculator" funnels
ROI calculators on SaaS landing pages pre-fill realistic values for your industry. You don't have to "type everything from scratch." You correct. And correcting = engaging.
Magnitude: not a detail, a multiplier
Post-2006 meta-analyses (Kivetz, Urminsky & Zheng, 2006; Hsee et al., 2011) confirm and extend the original findings. Typical orders of magnitude:
| Context | Observed lift in completion |
|---|---|
| Loyalty programs (stamp cards) | +50 % to +100 % completion |
| SaaS onboarding (initial checklist) | +20 % to +40 % activation rate |
| Long multi-step forms | +15 % to +35 % completion |
| Online course programs | +25 % to +60 % completion |
| Crowdfunding (donations) | +30 % for next milestone when gauge starts at 20-30 % |
The amplitude is such that a product that doesn't use endowed progress is literally leaving half its users on the side of the road.
The concept in one picture
WITHOUT endowed progress:
[ ] 0/8 → midway abandonment is common
WITH endowed progress:
[## ] 2/10 → perceived as "I've already started, I'll finish"
Real effort is identical. The narrative structure is radically different.
In summary
- The endowed progress effect was identified by Nunes & Drèze (2006) in the Journal of Consumer Research through a 300-card experiment in a car wash.
- A head start granted at signup (2 stamps on 10 instead of 0 on 8) almost doubles completion, with identical real effort.
- The mechanism rests on three levers: reference-point shift, behavioral consistency, goal-gradient acceleration.
- Not to be confused with sunk cost, IKEA effect, or simple endowment effect.
- It is the foundational brick of SaaS onboarding, loyalty programs, checklists and funnels that convert.
In chapter 2, we will dissect the underlying psychological mechanisms. Why does the human brain react so strongly to a head start it knows is artificial? The answer runs through Hull, Bem and Cialdini.