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What is “Nudge”?
Nudge theory has been prevalent in politics and behavioural economics for decades, and it was popularized in a 2008 book by economists Richard Thaler and Cass Sunstein. In the book, they describe a nudge as ‘any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives.’
Nudging works most effectively when it is used for good, creating a “win-win” situation for both companies and individuals.
We’ve seen examples here that make one thing clear: nudging holds the potential to move the marketing paradigm towards a proper understanding of the subconscious drivers of consumer behavior. But it is equally clear that it works most effectively when used to create a win-win situation for both companies and individuals.
Influencing Your Potential Customers Buying Decisions
Not just Businesses but schools, marketers and even governments are now using this technique so people can take desired actions.
Simple act of getting high school kids to fill out a college application before they graduated was the nudge that changed the course of their lives. Nudges are small, almost invisible, and often controversial.
So, how do we think…
Imagine going to a supermarket and agonizing which type of bread represents both the best quality and value for money. No, we’d rather just go with the default option or whatever is on sale. Some of the smartest business people take extra steps to minimize their cognitive stamina by wearing the same clothes most days like Mark Zuckerberg.
So, most neuroscientists have concluded that we have two modes of thinking. Our conscious thinking brain and our unconscious. They are:
System 1 Brain
Our system 1 brains are primitive, quick and intuitive. Often they’re beliefs, ideas and ways of behaviour governed by our lives, personal experiences as well as collective unconscious. We remain mostly unconscious to these leanings. Whenever you buy a product you do not need because it was on sale then this was your system 1 brain making the decision.
Marketing nudges activate our automatic brain systems. They take advantage of those who primarily rely on their intuition and make snap decisions without excess thought. Images of lung cancer on the side of cigarette packages speak directly to our system 1 brain priming us to feel guilt or disgust at smoking and creating cognitive dissonance.
System 2 Brain
This brain system is more methodical, logical and reflective. System 2 brains weight up probabilities when making a decision and love facts. Our system two brains often awake when we have an important decision to make. This could be making an expensive purchase, choosing a school for your kid, or picking an accountant. Facts drive nudges targeting our logical brains.
Examples of nudge marketing can be seen in government policies like including warnings on cigarette labels that smoking increases your likelihood of getting cancer by 52%. In the commercial realm, many companies include survey results in their ads and packaging such as 9/10 people who tried this product said this product made their skin softer.
Nudge & Social Proof
For example, Streak CRM does this by adding the label ‘most popular’ to their corporate plan on their pricing page.
Example, we are using our client testimonials next to content forms:
Nudge & Numbers
Numbers always make compelling arguments. But they also work as a nudge. If you can anchor your prices against a much higher number, then you’re far more likely to convert people from browsers to buyers.
The best example of this is in infomercials. You know when they say ‘that’s $300 value for a mere $39.95!’ or some such preposterous figure?
Source: Examples of Nudges
The Use of Nudge Theory in Online and Offline Retail
In retail, a lot of investments goes into choice architecture and taking control of the customer buying process. Stickers on the floor point and lead consumers to certain directions. Fresh fruit and veg on entry also cultivate perceptions of a fresh store. Choice Architects and Neuroscientists influence everything about the customer in-store experience and control decision making through in-depth consumer research. Choices such as shelf space and product location significantly impact sales. Products at eye level sell better. More shelf space for products also increases the likelihood of purchase.
In e-commerce stores, whats at the top of a page is vitally important. It creates the first impression for visitors. Bright colours also serve to attract peoples eyes towards intentional hotspots on a page. Suggesting popular items to customers prime them for purchase based on social proofing. Then you have – ” Other customers also bought these” which is a further form of crowd psychology. Sale deadlines and countdowns also encourage impulse purchases eliciting FOMO (Fear of missing out) in consumers minds.
The Use of Nudge Theory in Fast Food
McDonald’s, the fast food retail giant, employees are trained to offer only medium or large alternatives to customers when taking orders for drinks and desserts and emit the mention of the small option. In case the consumer doesn’t ask for alternatives medium size is the default.
Another example of how nudges are used in design:
1) At the salad bar, you don’t have to reach far for the broccoli, but you do have to for the shredded cheese. The chicken can be back there too because you’re likely to reach for it anyway.
2) For every food offered at the salad bar, you have to use tongs instead of spoons to move it to your plate. (Except, perhaps, for the asparagus if it’s not sliced.)
3) When you’re ordering off a posted menu, the fried chicken and fries are buried in the middle of the list while the oven-roasted turkey is at the top and wilted greens are at the bottom.
Nudge & Behaviours
As all women who have ever shared a toilet with a man can attest, men can be especially spacey when it comes to their, er, aim. In the privacy of a home, that may be a mere annoyance. But, in a busy airport restroom used by throngs of travelers each day, the unpleasant effects of bad aim can add up rather quickly. Enter an ingenious economist who worked for Schiphol International Airport in Amsterdam. His idea was to etch an image of a black house fly onto the bowls of the airport’s urinals, just to the left of the drain. The result: Spillage declined 80 percent. It turns out that, if you give men a target, they can’t help but aim at it.
Nudge & Colors
Here is an example of a company using color as a nudge:
You will not click on grey as blue is standing out + grey button looks disable or you cannot click on it.
Nudge & Visuals
University of Pennsylvania using Nudges to help sort out garbage problem:
Nudge & Product Design
Design a product or a service which solves your client’s problem and it does it way differently then any other service or product in the market. Shape Up! 30 reps before it stops buzzing.
Some product designers even take this thing further, they designed an alarm clock that shreds any amount of money you designate right before your eyes if you don’t wake up.
Nudge & Pricing
World’s most expensive burger: outrageous $666 Douche Burger. Besides the superfluous ingredients, the burger is wrapped with three $100 bills. While it is an amusing tongue-in-cheek menu item, and a clever bit of marketing, the Douche Burger is serves as an extreme example of a common nudging tactic that a lot of restaurants employ.
Including high-priced items on the menu boosts revenue because it increases sales of the second most expensive item. As noted in Predictably Irrational, restaurants sometimes take advantage of what is known as the decoy effect even further by engineering higher profit margins on the next priciest dish.
Changing old habits, This strategy must be used to reach out and change their “old habits”. By using the environment in your strategy, you make your strategy efficient and not anecdotal .
Nudges & Encouraging Good Behaviours
The Social Swipe is the first interactive billboard to accept credit cards, making donating easier than ever before. A credit card swipe through the poster donated 2 euros to MISEREOR and triggered an interactive experience: the card cut a slice of bread from a loaf, illustrating that the money donated was providing a daily meal for a family in Peru.
Nudges are gentle indicators to your users to push them to do what you want them to. They have to be gentle and easy to execute, and they can’t block off all other options. The goal is to promote the option that you want users to take, not eliminate other options all together.
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