NUDGE
by Yasushi Kusume
'Putting the fruit at eye level counts as a nudge. Banning junk food does not. ’
Nudge , Richard H Thaler, Cass R Sunstein , Yale University Press, New Haven & London, 2008
Nudges are not mandates. So say Richard Thaler and Cass Sunstein in their book, Nudge. They propose instead that, ‘A nudge, as we will use the term, is any aspect of the choice architecture that alerts people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives.’
Their argument - that ‘nudging’ helps people to make better choices since – is based on the dual process theory. This states that we tend to be lazy and make irrational decisions; that we feel more comfortable relying on intuitive, automatic and effortless thinking, rather than conscious, controlled and slow consideration.
For example, when confronted by supermarket shelves stacked with several different varieties of toilet paper, what do we do? We often intuitively go for the brand we always purchase - even if a few moments’ thought might show that it’s not the best option. We do so because our brains are lazy. We’re saving energy, rather than taking the time to think things through.
Urinal flies and hidden M&Ms
So how does nudging work?
One of the most well-known examples are the fake Urinal Bugs at Amsterdam's Schiphol airport. The simple act of placing the image of a fly in the base of each urinal gives their users something to aim for. They do it almost unconsciously. And as a result, the airport estimates it has saved 8% in cleaning costs.
Then there is Google, which has applied a nudge in its cafeterias to advance the company’s healthy-eating initiative. They haven’t banned M&Ms, but they have placed the packets of candy in opaque bins. Not transparent hanging dispensers. So because the packets are less visible, and therefore less eye-catching, anyone wanting one has to make a conscious decision to reach into the bin and take it. This was a small change, but it led to a 9% drop in caloric intake from candy in just one week.
Rewards and penalties
Nudging is one way of changing behaviour and influencing decision. The ‘reward and penalty’ method is another. For instance, many health insurers now prompt clients to use health and well-being apps*, while car insurance companies offer discounts to drivers who agree to have their (safe) driving monitored by in-car devices.
These are ‘reward’ schemes. They offer a positive outcome. ‘Penalty’ schemes, on the other hand, punish. In Israel, for example, in the early 00s and in a bid to boost good childcare, parents who arrived late at day care centres to collect their children were fined. (The scheme, though, as observed by behavioural economists Uri Gneezy and Aldo Rustichini, had unexpected consequences.**)
Libertarian paternalism
So what’s the fundamental difference between nudging and reward/penalty systems? The latter offer an Either/Or choice: Do this and receive a reward, Or do that and be punished. The former, Thaler and Sunstein claim, works on the – at first sight – contradictory principle of ‘Libertarian paternalism’.
Contradictory because libertarianism calls for people to be free to do what they like, when they like. Paternalism, on the other hand, says it’s legitimate to try to influence people’s behaviour in order to make their lives longer, healthier, and better. So how can you be free to do what you like if someone else is influencing your behaviour?
The answer is that a nudge doesn’t offer you a simple Either/Or choice. It doesn’t put pressure on you. Rather, it guides you towards several options and then leaves you free to choose. There’s no compulsion.
Nudges for brands
What does this all mean for a brand? In our book Brand Romance, Neil Gidley and I wrote that for a brand to become loved and appreciated, it needs to think about its audience's long-term happiness. The key phrase here is ‘long-term’.
Because as Thaler and Sunstein point out, ‘People may most need a good nudge for choices that have delayed effect; those that are difficult, infrequent, and offer poor feedback; and those for which the relation between choice and experience us ambiguous.’
A brand that considers its audience’s future and not just a quick profit today is, in my view, one that that audience will learn to appreciate and trust. And this is why I see a nudge as the most practical approach for all creatives wanting to make their brand a well and truly loved brand. It shows that your brand cares.
NOTES
* It’s been noted by observers that such monitoring system can trigger addictive behaviour. It’s a phenomenon I’ve written about in Phantom Vibration Syndrome.
** The research was conducted over 10 days and focussed on parents with children between the ages of 1 and 4. Parents arriving late to collect their children were informed that they would be fined NIS 10 for a delay of ten minutes or more per child. (At the time, the average hourly wage for a babysitter was between NIS 15 and NIS 20).
The scheme backfired. Childcare authorities soon saw a steady increase in parents arriving late to collect their children. They concluded that the parents considered the fine to be payment for a service, and that they no longer needed to feel guilty about picking their children up late.