Nudge – Choice architecture and marketing

It has been out a while, finally getting round to writing about the paean for public policy makers,Thaler and Sunstein’s book Nudge. The book describes the impact of small influences or “nudges” on one’s choices and behaviour created by environment or circumstance, and seems to me to have has lots of relevance to marketing.

They describe environment or circumstance as having a “choice architecture”. Choice architecture is the way a given system is set up to encourage certain actions over others. For example it makes a big difference if a check box question asks you if you want to opt out of a company pension plan instead of asking you to opt in. Inertia means many people don’t tick the box, and so more people get the benefits of employer contributions if the default choice is to opt in. The authors point out that making an active decision to influence choice architecture impacts behaviour just as much as leaving existing choice architecture alone, so why not choose to encourage a more positive outcome? It is impossible to avoid being a choice architect if you are are public servant and so it is better to encourage desirable actions. Whatever the system, from a voting form or a pension scheme or whatever, the system exerts some sort of influence over actions.

Marketing is all about influencing choice architecture. One only has to think of the science of retail and how the seemingly unimportant positioning of products on shelves can make a huge difference to sales. It is easy to get queasy about this aspect of marketing. It conjures up all sorts of negative connotations of subliminal messaging and overly pushy sales techniques.

But a responsible and sensible consideration of choice architecture by marketers can be of use to consumers faced with choice overload. Barry Schwartz talks about the Paradox of Choice. Most of us have busy lives and are time poor and attention poor. So set in that context it is possible to feel that you can have too much choice. Choice can be paralyzing and distressing. Too much choice is not a good thing.

People need help to make choices, and good marketing helps people make informed choices and feel better about themselves and what they choose. And so I think that the principle of proactively managing choice architecture is just as valid for marketing as for public policy.

Choice architecture can be deceptively simple. One of the examples of a nudge involves an airport administration who painted a small fly on each mens’ bathroom urinal to encourage accuracy (and therefore reduce the cleaning bill).

The point is, details matter.

Failing to think through the details of exactly how systems will impact a consumer and what they might do as a result can be the difference between success and failure. And I think that is particularly true in the hyper-connected complex world we live in.

UPDATE

Just read an interview with Rory Sutherland on the TED blog, and he make many excellent points building on his talk at TEDGLobal that chime with the above post. Thanks to www.tomcallard.com for tweeting the link and reminding me.

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