Nudging: influencing subconscious behavior

What is nudging? Nudging is gently pushing people towards the right path by making the ‘right choice’ attractive without limiting their freedom. The goal is (slightly) adjusting the subconscious behavior. According to the inventors of the phenomenon nudging (Thaler and Sunstein, 2008) nudges have to fulfill certain conditions:

  • Cheap in usage
  • Easily to refuse
  • Transparent
  • Helps people with their existing preferences
‘Nudge Unit’ active at the ministry of infrastructure and environment

Nudging was invented in the United Kingdom where they are already using it for a longer period of time. The British government has since 2010 a Behavioral Insights Team, nicknamed the ‘Nudge Unit’, who applies academNudging enic research regarding behavioral sciences in a practical way.  The Dutch ministry of infrastructure & environment has since 2014 such a team as well. They use knowledge from (social) psychology and behavioral economy in campaigns such as “de Bob” and ‘van A naar Beter’. But they also use it earlier in the process of developing policies, as they use this knowledge to create more effective policies. The Behavioral Insight Team has the goal to increase the effectiveness of campaigns and policies by using proven knowledge about regarding behavior. The team is set up as a compact network-organization that uses existing knowledge infrastructures.

 

Classical economists view the human as a completely rational being, although there is a lot of proof that people are completely irrational in many fields. These are exactly the fields nudging is used for; nudges are used to transform irrational choices into rational choices. Nudges are used by governments to stimulate desirable behavior, such as buying environmentally friendly clothes, waste recycling and cycling to work. Other examples of nudging are:

  • An energy company informing consumers about the energy use of comparable households.
  • Marking the vegetarian meal as standard during conferences.
  • Putting flies on the bottom of urinals so that man aims better while peeing.
  • Marking the yes option as default on a form for organ donations.

A well known example in the Netherlands is Holle Bolle Gijs in amusement park De Efteling who says “thank you” when you put trash in his mouth. Other examples are transforming a trash can into a basketball hoop.

Nudging afval

Below are two examples of nudges to stimulate people to take the stairs in stead of the escalator. What these two examples show is that the element fun can have an important role with nudges.

Nudging-stairs-530x269 en

Below are two funny videos, one about the ‘piano stairs’ which realized a 66% increase in people taking the stairs. And one about nudging people to use the waste bins (+132%). Both in Sweden

Nudging used by the Dutch tax authorities

In a recent article from the Dutch newspaper NRC they describe how the Dutch Tax authorities use nudging. They have a nudging team of 4 people that has to make sure that people fill in their tax returns on time. They do this in various ways but here are a few examples:

  • Pasting post-it’s on the envelopes and letters with the text “think about your tax returns’ or ‘Thank you’ with the initials of the employer.
  • Highlighting deadlines by counting down how many days remain for you to fill in the returns. For instance: only 20 more days before the 1st of April (the date in Netherlands when everything has to be filled in).
  • Sending pre-filled in returns; this way people start faster and more relaxed with the returns.
  • Sending letters with detailed instructions increases the response and satisfaction.

The British tax authorities also make use of nudging, they use various nudges to increase the opening and response rate:

  • Normally the envelope the British tax authorities use is brown, when they used a white envelope and wrote a hand written message on the envelope such as ‘Steve can you please open this letter’ response rate skyrocketed.
  • They also did an experiment with drivers who did not pay their drivers tax. Normally defaulters get a single reminder that if they don’t pay they risk a €1.200 fine, which had an average response rate of 11%. However, when the headline of the letter said “if you don’t pay you will lose your ford focus” in bold letters including a picture taken of that car by a traffic camera, the response rate increased by a threefold.
  • Many people wait with filling in their forms until the last moment, although when they include a simple statistic that showed that most people in their neighbourhood already filled in their forms, the response rate increased by 15%.

Applying nudging in persuasion

Nudging can also be used by different organizations besides the government; it can also work really well for (online) marketing as behavioural change is an important factor in marketing. In the next part we will show some example of how you can use nudging in your online channels:

The power of defaults

One of the most important nudges in marketing is default options. Use the power that default options have. Setting the right default option can result in a much larger response rate and a more valuable response. An example is a charity in which the default option option for donors is personalized based on their previous donations. If someone normally donates between €10 and €20, then this person will see the following options €20, €30, €40, €50 and €___ other. However, if someone normally donates between €500 and €5.000 he or she will see the following options €250, €500, €1.000, €2.500, €____ other. When you suggest one of these options many users will automatically pick the easy road and tick one of the pre-suggested boxes, if they correspond with their previous behavior.  This is also a form of anchoring; people take the amount that you suggested as an anchor for the amount they want to donate.

Nudging- onderbewuste gedragsbeinvloeding Opt-in Opt-outAnother example that illustrates the power of defaults is the percentage of organ donors per country. Some countries have an opt-in policy where you are not a donor unless you actively tick the box “yes, I want to be a donor’. Other countries have an opt-out policy where you actively have to tick the box “no, I don’t want to be a donor”. The table on the right hand shows that the countries with an opt-out policy has a much higher percentage donor than countries with an opt-in policy.

Use the decoy effect

The decoy has to do with adding a third option when you only offer a cheap and an expensive version of your product. This third option should then be priced between the cheap and the expensive option but closer to the expensive option. Important is that this third option is priced closely towards the third option but the quality has to be a lot less than the expensive option. The image to the right is an example where the decoy effect is demonstrated which is described in Dan Arielly’s book from 2008: The hidden Forces That Shape our Decisions. In this book he describes the results of one his experiments. The results showed that when people have to choNudging - beinvloeding van onderbewust gedrag - Decoy pricingose between a digital subscription for a newspaper for $59 or the same subscription plus the print version for $125, most people choose the digital subscription only. However, if you add a third option this will change. When he added a third option which was a print version for $125 the digital and print version option becomes much more attractive.

The reason behind this is that you let people believe they get more for their money with the most expensive option. In the first situation with only 2 options 32% choose the print + digital option, whereas in the situation with three options 84% choose the print + digital option! This proves that we don’t view prices as absolute but in a contextual way. We determine the value of something by comparing it to other options.

Anchoring: set the tone

Anchoring - online nudging

With anchoring you start showing the most expensive product first and afterwards the cheaper options. This way customers see the most expensive price as the price to compare all other products. This way the less expensive options that follows seems a much better deal, compared to when you show the cheapest option first. These cheaper options have to be shown in a close proximity of the most expensive product otherwise visitors might think that your product is more expensive than competitors.

Use Gamification

Gamification is applying strategies used in games for marketing and example of this is rewarding a free trial user with an award which gives them the paid version of a software for free for 2 months. With this strategy it is important to tell the customer why they won the award. The reason behind this is that you have to give the customer the feeling they achieved something, which gives them a positive feeling.

Social proof: who else?

Social proof - vorm van online nudging

Use social proof and let statistics prove that others use your products as well. For instance, when 4 out of 5 people in a certain target group use your product this statistic will give the customer the feeling they are doing something wrong by not using your product. Another example is showing which Facebook friends like a certain company.

Reciprocity: give a little, take a little

Another way to approach customers is: reciprocity. When you give high potential customers something there is a large chance you get something back.

Criticism on the use of nudging

  • The largest objection against the use of nudging is that it is a form of manipulation, as it influences behavior without us knowing it.
  • Another objection is that the government can promote, trough nudging, behavior they think is “good” and discourage behavior they think is “wrong”. This can cause that the government dictates which activities we should do and which we shouldn’t.
  • Furthermore, sometimes its difficult for governments to determine which behavior they should promote. Why do they promote organ donations but don’t promote blood donations? It can be difficult for governments to find answers for these questions.
  • Another criticism is that companies use nudging tactics to exploit people and make them buy products they don’t need. For instance, a supermarket offered a lunch deal for €3 including a bag of crisps, a sandwich and a drink. However, if you would buy these three products separately it would be cheaper. This is an example of using the framing effect in a misleading manner.

We think it is possible to use nudging to promote desirable behavior. When companies use it an appropriate and normal way the objections against nudging are not that big, as the customer will always have to freedom of choice, which is the way it should be.

Workshop nudging in real life

Because of the interesting opportunities regarding nudging and the attention towards nudging and influencing behaviour in general, we are planning to organize a nudging workshop in the fall of 2017. If enough people are interested multiple will follow. Goal is to, together with others, in an interactive way show you the possibilities of nudging in your organisation. At the end of the workshop:

  • You have an overview of the possibilities nudging offers in your organisation
  • You can show your customers why nudging is useful
  • You have practical ideas that you can implement the next day, or start an A/B test to test your idea

Take a look at the complete programme

Curious about the possibilities for your company? Contact Hans Drenth and we can discuss the opportunities.

Or read on about nudging in our post about digital nudging.