Rather than using advertising to demand or even suggest a behaviour; it is often more cost-effective to identify a simple psychological trigger or nudge.
You can use many recognised nudges to influence consumer behaviour – such as lines on a road that tell us on which side of the road to drive. More recently, with psychologists and behavioural economists’ help, marketers have developed some more innovative nudges to influence behaviour.
Instead of advertising – use a psychological trigger to cause the behaviour you require.
Psychologist Adam Alter looked at donations made by citizens of the United States after hurricanes. He found that in 2013 – Hurricane David (bearing a name shared by 3.5 million Americans) resulted in significantly higher donations than hurricane Joyce (bearing a name shared by 6000 Americans) and hurricane Dorian (bearing a name shared by 9000 Americans).
Psychologist Jesse Chandler found that for hurricane Rita in 2006, people named Robert, Ralph, Rose, or some other name beginning with ‘R’ donated on average 260% more than other people with different names.
Together these studies suggest that the first letter of a hurricane’s name can act as a psychological trigger or nudge to a particular group of people, causing them to behave differently or in different numbers from other people. These studies highlight just how simple and just how powerful a psychological trigger can be.
Observe consumer behaviour long enough and close enough to identify inexpensive nudges that, when applied – facilitate a preferred behaviour.
Use human instincts to identify the psychological trigger that will facilitate a purchase.
Nobel prize winner Richard Thaler cites a study in Europe that involved painting an image of a fly at a urinal base. What followed was a stream (pardon the pun) of men aiming at the fly when they used the urinal. This led to a 50% drop in spillage on the floor – significantly reducing cleaning costs. A similar study conducted, delivering similar results, at the University of Louisville in Kentucky involved placing the emblem of a rival University of Kentucky at the urinal’s bottom in some of their changing rooms.
These findings have little to do with flies or logos. They do, however, appear to demonstrate two things:
- A natural inclination of men to aim when urinating.
- The power of triggering natural human inclinations.
Students at Roskilde University in Copenhagen undertook a two-part study looking at littering. In the first part, they handed out lollies in wrappers in Copenhagen’s streets – and then counted the number of wrappers that were on the ground afterwards. In the second part, they preceded the lolly distribution by placing ‘green footprints’ on the ground leading up to rubbish bins. Then they handed out the lollies – and found a 48% decrease in litter afterwards.
They found that the ‘green footprints’ on the ground caused people to visit the bin more often than just dropping the paper. They also found that after the initial people followed the ‘green footprints’, there appeared to be a social norm developing. This, in turn, further increased the proportion of people who walked over to the bins and deposited the wrapper in it. This all took place in a country where 90% of the adult population claimed to be concerned about littering.
These studies highlight of a simple psychological trigger or nudge to influence consumer behaviour. The nudge or psychological trigger is all about tapping into a natural inclination. The brilliance of the idea revolves around identifying this natural inclination and identifying a way to leverage it.
Psychological triggers can be most effective when they arise from or leverage a natural human inclination or instinct. Leveraging natural tendencies and instincts can be very useful in managing consumer behaviour.
Use the decoy effect to communicate that your product offers exceptional value.
Apple offered three 13-inch MacBook Pros – the basic model for $1499; the intermediate model for $1799; and the premium model for $1999. In this case, the intermediate model was a ‘decoy’, encouraging consumers to buy the premium model. Consumers did not want to buy the ‘cheapy’, and since the premium was only $200 more than the intermediate offering felt ‘why not pay the extra $200?’ This was a highly successful strategy for Apple.
Photograph vendor Shutterstock was offering 4 packages – 10 images for $29; 50 images for $99; 350 images for $169; and 750 images for $199. In this case, the 350 images for $169 was the decoy. If the consumer needed more than 50 images per month, the 350 images package feels unreasonable because, for $30 more, they can enjoy more than twice as many images. The consumer is drawn to the more expensive package.
The decoy effect was perhaps best demonstrated by research psychologist and author Dan Ariely working with The Economist magazine. Subscribers were offered two options:
- Print and digital – $125.00
- Digital only – $59.00
- Print only – $125.00.
- Print and digital – $125.00
- Digital – $59.00
The findings were as follows:
- Print and digital – 32% of sales
- Digital-only – 68% of sales
- Print only – nil.
- Print and digital – 84%.
- Digital – 16%
By adding a third decoy option (Print Only for $125), the researchers increased the income of the Economist by 43% – without actually selling any of the decoy options. The decoy made the print plus digital (which cost the Economist no more, to appear to be superior value)
The decoy effect can be potent in influencing choice, mainly when dealing with price and value perception.
To cause a complex behaviour, instead telling people to do it, tell them how many others do it.
Research in the United States found that 69% of fad diets fail to achieve the target weight. No one is surprised by this statistic. Not one reader just gasped and said something to the effect of that is high’. We all know that fad diets do not work.
Research suggests that more than half (54%) of US citizens are on a diet. The most recent figures in Australia indicate that more than 2 million Australians are on a diet. By the time the average Australian woman is 45 years old, she has tried an average of 61 diets – and most have failed.
So, if diets don’t work, why do people keep on going on them? A big part of the answer lies in the human need to follow the leader (while not necessarily admitting to doing so). Rather than assessing each diet on its merits – consumers tend to follow the lead of others and rationalise their diet choice based on second-hand information that they pretend to understand and use to establish a personal rationale.
It is important to embrace the mob’s power – and what might be called the bandwagon effect. It can be a powerful driver of behaviour.
To maximise positive behavioural responses, replace opt-in with opt-out.
Unlike in Australia, in the United Kingdom, superannuation is optional. No one has to invest in superannuation – and in the main – they don’t. This suggests to some that given a choice, a consumer will not invest in superannuation. Researchers in the United Kingdom, however, found that this was not necessarily the case. They found that for many consumers, the barrier to signing up to superannuation was the sign-up process. With this in mind, researchers tested two choice options offered to employees in the workplace:
- Opt-in – where employees had to go through the process of finding a policy and signing up to it and organise a method of payment.
- Opt-out – where the employees were automatically signed up to a superannuation policy. Unless they opted-out the money deducted directly from their pay each payday
The results were enlightening. The number of employees with superannuation cover was found to be 10% higher among the opt-out group than the opt-in group.
Similar findings have arisen in studies addressing organ donation rates.
Some 48 counties with organ donation systems have been studied. Recent research suggests that in countries with an opt-out system (you are a donor until you choose not to be), registration rates are around 90%. In contrast, in countries like Australia, where it is opt-in (people have to tick a box to be a donor), average registration rates are just 15%. As it happens, this is not the whole story – and the capacity of a family member to decline the donation brings the two actual donation rates much closer together – with opt-out – still a little ahead.
These findings suggest two things relevant to this discussion:
- Choice architecture is a powerful tool in nudging a behaviour to occur.
- Nudge works best when it involves making the preferred choice easier.
How a choice is designed and presented can significantly impact the choice made, and all things being equal; consumers tend to choose the most comfortable option.
Look for simple and inexpensive ways of nudging consumers to behave the way you want to. Identify the psychological triggers and simple nudges you can use to cause a consumer to behave in a manner consistent with your objectives where possible, resist the immediate temptation to resort to advertising. Embrace choice architecture and frame choices in a way that makes the preferred choice the easiest to pursue.
Research has consistently found that there can be simple nudges that influence consumer behaviour in ways advertising cannot – and very often for a fraction of the cost. Some of the nudges can be readily identified based on intuition, while others will become evident following the careful observation of how consumers behave in relevant environments. A good starting point is to understand the customer journey thoroughly.