How nudge can help you and your users
Have you ever shopped online and received a notification that there is only limited stock of an item available? If you are like most people, these alerts will nudge you over the edge to purchase the item now. There are only a few left, after all! This is an example of how marketers use behavioural insights to influence their customers. This blog will explore how we can help our users through a behavioural science technique called a nudge.
What is a nudge?
Nudging is based on the principles of behavioural economics. The Oxford Dictionary defines behavioural economics as a method of economic analysis that applies psychological insights to human behaviour to explain economic decision-making.
Through behavioural economics, we can begin to answer questions like
- Why is it so difficult to save for retirement?
- Why is losing more painful than the pleasure of winning the same amount?
- When there is a bowl of snacks in front of us, why can’t we stop ourselves from eating them?
In their foundational book, Nudge, Richard Thaler and Cass Sunstein take behavioural economics one step further. While behavioural economics explains the decision-making of us not-always-so-rational humans, Nudge tells us how we can design systems to help us make better decisions.
A nudge is a prompt that can lead people to adopt a new behaviour without forbidding any options or significantly changing economic incentives.
What are some examples of a nudge?
One example is nudging people to choose healthier options in a cafeteria line. Humans are likely to choose the option that they see first. If no thought is put into arranging meal options, one might place cookies first.
By putting cookies at the front, we may unintentionally cause people to eat more cookies and be unhealthy. If we put apples first, we can encourage people to make healthier choices. Small changes in the way we present choices can have a big impact on what choices we make.
Another positive example of what a nudge can accomplish is its application to retirement savings plans. It used to be that people had to opt into a retirement saving plan.
They had to make a lot of difficult choices like
- How much of their paycheck to save
- What level of investment risk are they comfortable with
- How to invest that money
These small frictions made it difficult to start saving, even though many wanted to put money aside for retirement.
Thaler and Sunstein understood humans would quickly choose the default option and won’t often put in the effort to opt out. So, they suggested we reduce the frictions that kept people from saving. How? By changing the default option to being enrolled in a savings scheme. Through implementing this plan in different companies and governments across the globe, millions finally began saving for retirement, even though it had been on their agenda for years.
How can ISG/LTW use nudges?
Within ISG(Information Services Group), endless opportunities exist to “nudge” our users towards the desired behavior.
The book inspired Melissa Highton, Director of Learning Teaching and Web Services, to think about how she could nudge her employees to do their mandatory training.
How do I design a nudge?
When designing a nudge, you can start by finding a pain point or an area where people are acting in an unwanted way. In the cafeteria example, people were choosing cookies before healthier options. In the retirement savings example, people were not saving for retirement even though they wanted to.
In the past, getting all employees to complete their training had been difficult. People probably intended to finish their training but would get easily sidetracked by other, seemingly more pressing issues. A member of staff would continue to badger people who hadn’t completed their training, but weeks would go by, and the training was still not done.
We identified our pain point.
What do we want our audience to do?
The next step in designing a nudge is deciding what behaviour you want to encourage in the people you are nudging. The behaviour she wanted to achieve was more people completing their training sooner.
Why aren’t our users doing what we want them to?
This is when it is important to put on your behavioural economist hat. Humans are prone to cognitive biases that make us far from the logical beings we think we are. In the cafeteria example, lunch-goers are biased towards picking the first option they see. In the retirement example, people are biased towards choosing the default option.
Hundreds of cognitive biases affect our behaviour and make us less than rational. If you are interested in learning more about this, check out Decision Lab’s list of cognitive biases.
The barrier to people completing their training was employee’s unwillingness to make it a priority. Melissa needed to reduce the friction between the intended behaviour and the barrier.
Her solution? She set up LTW (Leanring Teaching and Web Services) Mandatory Training Day (LTWMTD), Friday 20 May 2022, where the full day was dedicated to completing mandatory training. The whole of LTW would be working on their training at the same time.
What makes people change their behavior?
Let’s look at how Melissa made LTWMTD easy, attractive, social, and timely, following the EAST framework outlined by the Behavioral Insights Team.
She made the event easy to attend. Although LTW had always ‘allowed’ time in the workday to complete training, employees faced choice overload. Without a due date, people were getting overwhelmed by the close to limitless training schedule options.
Instead, the decision was made for them. The training was scheduled for a Friday because it was supposed to be a day of writing and no meetings. Making a diary entry for the full day made it difficult for people to come up with excuses.
She made the event attractive by providing coffee and snacks for people working in Argyle House that day. People were encouraged to work on the training together and discuss with a housemate if working from home.
She made the event social. While some people might have gotten frustrated doing the training independently, working in a group made it easier to ask for help or clarification. By working together, teammates could help each other stay on task. A chore that could have been boring otherwise was now an opportunity to chat up coworkers.
She made the event timely by having everyone do the training on the same day. The fact that everyone was working on their training at the same time made it much easier to work together and harder to forget about or put off. For everyone in LTW, the only expectation for the day was to complete training.
Do nudges actually work?
Over seventy staff members completed their training on the designated day, and only six of the one hundred twenty-five did not finish by the deadline a week later (those six cases had special circumstances). This compares to the only ten people who completed their training in a week or less the previous year.
An added benefit was that no one had to chase people down to complete their training and the employees didn’t have to be chased. Instead, they were nudged.
LTW mandatory training day is just one example of how we can use nudges to improve our ways of working and the experience of our users, but the opportunities are endless.
Now that you know what a nudge is, you will see the possibilities everywhere.