What you need to know to successfully nudge customers
Not sticking to resolutions, it's all too human, isn't it? Often an extra boost is exactly what we need to eat healthier, drive more safely or live greener. Prof. dr. Denise de Ridder, Professor of Psychology at Utrecht University, studies the possibilities and limitations of nudging. She also shares compelling insights on how your organisation can leverage nudges to help customers make better choices.
Why do people make decisions that are actually not good for them?
Most people would like to make better choices, especially when it comes to their health. Just think of our New Year's resolutions and the goals we set for ourselves. But only a fraction of them leads to the desired behaviour.This intention behaviour gap is caused by laziness, lack of willpower, not being prepared for temptation…
Human weaknesses that keep us from sticking to our plan. However, we should also not underestimate the impact of the context. No matter how determined you are to eat healthier, when the whole city is paved with snack bars and the supermarkets are full of processed food, the context does not help you to follow-through on your intentions.
Prof. dr. Denise de Ridder, Professor of Psychology at Utrecht University.
How do you create a context that encourages better choices?
You can approach behavioural change in highly different ways. At one end of the spectrum, people start from the principle that our behaviour is our own responsibility. The individual decides and always has a choice. At the other extreme, you regulate the desired behaviour, for example through a 'fat tax' or a ban on snack bars near schools. Somewhere in between, you can still leave people freedom of choice, but make it easier for them to choose.
Introducing subtle hints into the context in which the decision is made, that's nudging.
One way is to inform people. Another way is nudging. This means providing subtle hints in the context in which the decision is made. By reminding you of your New Year's resolution, or putting the healthiest option prominently in the picture, nudges guide you towards the best choice.
The power of nudges is that, unlike information, they are actively present at the very moment when you make a choice. In this way they help to close the gap between intentions and behaviour. Thanks to that extra push, you do what you had intended to do, but what you were no longer thinking about at the decisive moment.
At first glance, it seems hard to find any objection, but not everyone is a fan of nudging. Why is that?
In 2008 the book 'Nudge: Improving Decisions About Health, Wealth, and Happiness' was published by Nobel laureate Richard Thaler and Cass Sunstein. In this bestseller, the authors work from the idea that people do not make rational decisions.
Framed in this way, for proponents, nudging is a handy trick to get around limited cognitive abilities, but for opponents, it's a way to manipulate people. They can live with the fact that commercial organisations use nudging in their marketing. But a government that makes use of it, in their eyes, reduces itself to a marketer.
Do you think the criticism of nudging is justified?
Now, many studies later, we know that nudges are less 'sneaky' and 'manipulative' than previously thought. Nudges also work when people are encouraged to think carefully about the choice they are making. Or when you explain to them exactly how they are being nudged. For example, if you say 'we help you make the healthy choice' or 'we show you what others choose because we know that people like to conform to the social norm', your nudge becomes transparent, but no less effective.
Does nudging always work and for everyone?
Our research into the effect of nudges in making health choices shows that nudges have no added value if you are not interested in your health, nor if you are already very much concerned with healthy living.
Nudges have no added value if you don't care about your health.
In other research, we studied the effect of the 'centre stage nudge', which takes advantage of the tendency to choose the middle – in other words, the safest and least extreme – option. In the experiment, the nudge consisted of offering participants a large, medium, and small soft drink, with the smallest size in the middle. In that way you nudge towards the least harmful choice. In two situations in the study, the nudge turned out to be less effective.
Consumers who already live a healthy lifestyle chose the smallest glass anyway. And people who were very thirsty simply grabbed the biggest one anyway. This experiment also proves that nudges are less misleading than critics claim. People do use their cognitive capacities when choosing. Their own preferences are also reflected in their responsiveness to nudges. And that's what I like about it: no matter how healthy a choice, nudges don't force us to do something we really don't want to do.
You've also conducted research in the Netherlands into how people reacted to nudges when registering as organ donors?
That research was done when there was a big national outcry about making registration the default with an optional opt-out. Offering default options is a powerful nudge and we examined how people reacted to them. That was generally positive: everyone felt competent to make a decision, was satisfied with their choice and also had no problem with the nudge. Except for a very small minority.
Nudging has no added value in sensitive issues such as vaccination or organ donation, where the debate is heated.
What did we discover? This group actually had a lot of trouble making a choice about this controversial issue. It turned out to be people who lived at the lower edges of society and couldn't quite keep up with digital technology. You'd think a nudge would be just the thing to help them decide, but the opposite is true. They get confused by these kinds of choices anyway and they find the extra push of the nudge very unpleasant. It confronts them too hard with the fact that they can't choose.
We also saw the same phenomenon in research on the covid vaccines. American studies had already shown that nudges that made the vaccination invitation very personal – things like "your vaccine is ready, we are expecting you" – worked better than financial rewards. This sounds like good news, but our research again showed that nudges accompanying the invitation to be vaccinated turned out not to be so effective. For example, they had no influence on the 60% of respondents who were already very convinced of their choice : anyone who was against vaccination was not persuaded to change his mind by the nudge. Moreover, the nudges also did not help to convince the hesitant. Those were again people who were very confused by all the vaccination information and nonsense that was coming at them.
Actually, the nudging came too late in this particular situation. The debate had already become too complicated. The conclusion I draw from this is that nudging has little or no added value in sensitive issues such as vaccination or organ donation, where the debate is heated. At the very least, research should be done on its effect with people who have difficulty making choices.
We've talked about the limits of nudges, but are there any factors that can amplify their effect?
"First of all, let me say that the term 'nudging' is often used where it shouldn't be. Any clever sticker or key ring gets called a nudge. Or it is suggested that we should make choices more fun through gamification. I don't really believe in that. I'm also quite sceptical about the combination of nudging and financial incentive. People get used to that very quickly, so the effect is short-lived. However, it is important to keep the choice you nudge towards financially feasible for people. There's no point in nudging healthy eating habits if eating healthy food is more expensive than the unhealthy alternative. What does work in my view? Making the desired choice the default, making it stand out or identifying it as the social norm. Those are still the most powerful nudges for me.
I also see three promising ways to further develop nudging.First, a nudge has a longer-lasting effect when you link it with an opportunity to learn. This kind of a nudge that gives people insight into their choice is called a boost. In a similar way, and interesting from an ethical point of view, you explicitly invite people to consider all options when making their choice. Such a nudge comes across as less of a trick or less patronizing. And third, in nudging, it helps to emphasise the collective impact of choices. Now people often think: "What difference does it make if I decide to ride my bicycle more often?" If it is confirmed that their choice contributes to the greater good and that they can bring about change together with others, this often provides an extra incentive.
Where is nudging most commonly used?
Nudges are often used when people have to make choices about health, finances and sustainability. In England, nudges are used to encourage taxpayers to complete their tax returns on time. They are used to encourage healthy eating habits in supermarkets and school cafeterias.Health insurers also invest in promoting healthy choices and offer health apps or quit-smoking programmes. (Ed. Read also How public health insurance schemes approach health prevention)). But nudging customers directly – at least in the context of prevention – I think is more difficult for them because they are not present when the customer is making choices. Insurers could perhaps set up ecosystems for this to nudge their customers in collaboration with partners.
What opportunities do you see for commercial organisations in general to integrate nudges into their product design?
By definition, nudging is done in the interests of the consumer, customer or patient. We must not lose sight of this basic principle. When commercial organisations nudge, the idea is therefore that they think about the interests of the customer and not just about their own profit. This is often called social entrepreneurship, but it's a very fine line.
Take the example of my coffee supplier who urges me online to order ten more cups because this is better for the environment in terms of transport. As a critical consumer, I still wonder whether it is really better, or just a clever trick to sell more coffee. Mind you, I don't necessarily have anything against these nudges either. If they serve a greater purpose and are not at the expense of the customer, then I think it's worthwhile for companies to invest in them.
Where do you see the greatest potential for nudging?
I'm convinced that nudges can help consumers make more sustainable choices. However, there is a risk that the responsibility will only be put on the populace. You have to realise that nudging originated in the United States, the land of the free, where you choose for yourself whether to sign up for a pension and health insurance. For the US government, nudges were the only way to be involved in the choices of its citizens.
In Europe, the context is different. We consider it normal here to pay for a mandatory pension contribution and health insurance. We do not have to take that responsibility as individuals. You can't imagine what would happen if people had to decide these things for themselves. The same goes for the climate issue, which is too big and too complex to be left to the citizens alone. Governments should go ahead and nudge sustainable choices to some extent, but it's important that they also take clear positions themselves. Nudges to get consumers to eat less meat make little sense if the agri-food industry and the government don't make important decisions.
Most people want to make better choices. But the gap between wanting to and actually doing is huge. Nudges are subtle hints that help us effectively follow through on our intentions at the decisive moment.