toggle menu
/02.05.2018

The application of “Nudge Theory”, proposed by Nobel Prize winner Richard Thaler, is becoming more and more prevalent in the marketing and advertising arena. What does it look like and how can be it used for the benefit of businesses and consumers alike?

Nudge Nudge, Wink Wink:
Nudge Theory in Marketing

The application of “Nudge Theory”, proposed by Nobel Prize winner Richard Thaler, is becoming more and more prevalent in the marketing and advertising arena. What does it look like and how can be it used for the benefit of businesses and consumers alike?

Nudge Nudge, Wink Wink: Nudge Theory in Marketing

The choice of least resistance

Have you ever thought about how many of your everyday actions are consciously controlled? Do you remember looking left and right before crossing the road to work this morning? You may remember doing it, but just how aware of that behaviour were you?

Human behaviour is driven by two systems: the automatic and the reflective. These two systems reflect different processes, different ways of handling information and forming responses.

The automatic system can be best exemplified by reading the body language of a person. If someone is smiling, people would automatically assume they are happy or pleased; this is an instant conclusion that requires little thinking. Whereas, the reflective system is linked to a situation that requires us to think more carefully. For example, if you were to be presented with a maths problem like “9 x 653” (the answer is 5877).

We are biologically predisposed to save energy, and therefore we naturally tend to avoid reflective thinking unless necessary. Our attention spans are linked to this idea, and it goes some way to explaining why humans like to “live in the now” – responding to our environments in an automatic framework.

Take recycling for example. Why do you think that recycling bins are so often colour coded and clearly labelled? The answer is simple: to increase the likelihood of people recycling through an automatic behavioural response. If the recycling bins were not differentiated by colour or labelling, then it would evoke a reflective response, and consequentially the chances of a person taking the time to dispose of their rubbish correctly would be lowered.

This concept is referred to as a “nudge”. Many people are subjected to light nudges that influence their actions in purchasing, business and society.

Nudge, don’t shove

Nudges are rife within the marketing world, but it isn’t always obvious that you’ve seen or interacted with one. Nudges are all about altering “choice architecture” – how the decisions we make are affected by the layout, sequencing and range of choices that are available – to help the public make “better” decisions.

With the onset of GDPR, many organisations are attempting to get people to willingly hand over various forms of data, but now that consumers are far more discerning about what information they want to give away, organisations now need to be far more creative in the ways they obtain data.

Linkedin has utilised an extremely effective nudge mechanic to encourage users to upload information about themselves. When you create a Linkedin profile, you see a bar that progresses when you take different steps to complete your profile. The more information you “invest” in your profile, the higher “rank” you attain.

By gamifying this process, Linkedin nudges us (and leverages our human desire to progress towards a goal, called the Endowment Effect) to interact more deeply with the product. By outlining the benefits of each rank, the choice architecture slowly encourages the user to continue to hand over data and increase the value of their profile.

 

A nudge in the right direction

A nudge is a highly flexible mechanic that can be applied to marketing strategies in many different forms. To engineer a nudge that is effective in a marketing campaign, marketers should consider these four simple steps:

  • Easy It is important to remember that people prefer automatic thinking to reflective thinking. Marketers should ensure their messages are clear, simple and easily answered.
  • Attractive People are more likely to do something when their attention is demanded, so the use of personalisation, relevant images and colour all encourage them to take notice. Once the content has their attention, companies should frame their nudges in a positive way and direct them to take an action.
  • Social Humans are social creatures and often influenced by the actions of those around them. Nudges should attempt to show that most people, and people connected to them, benefit from the desired behaviour that an organisation is proposing.
  • Timely Finally, nudges prompt people when they are likely to be most receptive. Sending content at the right time – usually at lunchtime when people are taking a break or late afternoon when people have finished work – allows them to buy into your proposition because they’re relaxed or unhindered by work.

A nudge is a powerful, effective and proven method of helping audiences to make more beneficial choices and engage with businesses. With consumers being less influenced by stand-alone claims, the importance of nudging as a marketing mechanic has never been more crucial.

 

Is your organisation utilising nudges? If not, you probably should be.

 

Contact Agency Spring at info@agency-spring.co.uk to find out how we can help implement effective nudges and marketing strategies.