Decision-making processes are much more intricate than we think. We are faced with tens of thousands of decisions every day, an increasingly ‘noisy’ environment, and an overwhelming number of options to choose from. Plus, we’re lazy! We don’t want to work too hard to process information which means that we want things presented to us simply and in a way that is short, relevant, and easy to understand. If not? Well, we ignore it.
Enter Behavioural Science.
This exciting field of study looks at the science of decision-making and how, by leveraging predictable patterns, people can be nudged to make one decision over another. Nudges — gentle changes to the choice environment that don’t remove options or force decisions — help guide people in a particular direction and have become an increasingly important and powerful marketing tool. Let’s see this in action.
Despite being rooted in the complex theory of libertarian paternalism, behavioural insights are tangible principles that are applied in everyday life. To demonstrate this and introduce you to a few of my favourite nudges, let’s take a trip together. Pack your bags, we’re heading to New York City …
First things first, we need to book our flights.
When faced with a decision, we are more motivated to act when offered an incentive. These can be intrinsic (recognition, acknowledgment, leaderboards) or extrinsic (gift vouchers, discounts, prizes). We are even more motivated when these rewards are upfront because humans are geared towards immediate gratification. When booking our fights to New York City, we pick British Airways over all other available airlines. We do this because, through our membership with a loyalty programme, we’re offered a 35% discount. This saving makes it a no-brainer.
Next up: our accommodation.
Have you ever visited a booking site to browse accommodation options only to be pressured into making a decision by pop-ups that tell us “Hurry up, only 2 beds left!”. Usually in bold, red text. Well, as stressful as this can be, it’s actually an effective behavioural tactic known as scarcity. When something is less readily available, or limited, we tend to perceive it as far more valuable and this, in turn, nudges us to act quickly. Careful though, there are some ethical concerns around this application of scarcity and it’s important that the information presented to customers is always truthful.
We’ve arrived! Let’s celebrate.
We walk into a restaurant in Times Square and take in the city views. At our table, a wine menu is handed to us. We know our preference is for red wine, but which one to choose? Say hello to anchoring. This is a type of priming where initial exposure to a number serves as a reference point and influences our decisions. We tend to anchor on price points, and, just like the story of goldilocks and her bears, we don’t want things too hot nor too cold. We are more likely to pick a wine that is somewhere in the middle pricewise, not too expensive, not too cheap. And restaurants know this. The middle options are usually the wines they want you to pick — either to move stock or to make the most margin from.
Time to eat, anyone for pizza?
We don’t want to stay in one place for too long when there’s so much to see. After our glass of wine, we’re on the lookout for a new spot for dinner. Where should we go? Google it is. We want to see what other people have to say about the best pizza in town, a behavioural principle known as social proofing. We tend to follow the herd, especially when we find ourselves in unfamiliar situations like a new city. Here’s a great option: Trip Advisor suggests Joe’s Pizza. Thousands of people have recommended it, plus, it has the celebrity stamp of approval with dozens of polaroid pictures to prove it. If it’s good enough for Hugh Jackman, it’s good enough for us.
Let’s grab some groceries.
Trader Joe’s is a popular grocery store. One of the reasons for their popularity lies in their choice architecture, that is, how they present products to a customer. We like choice, but we don’t like choice overload (a cognitive impairment where we have a hard time making a decision when faced with too many options). Trader Joe’s recognises this and so limit their range of products. This way they don’t overwhelm customers who may, as a result of choice overload, end up leaving with the wrong product or nothing at all. They offer around 3–4 choices of each product, ensuring the decision-making process is as easy as possible. Who needs 25 tomato sauce options anyway?
We spot a bookstore.
Strand is known for being one of the nudgiest bookstores around. How do they get this title you ask? One of the ways is by embracing the messenger effect. This is when a message is delivered by someone we trust and so commands authority and credibility — making it more persuasive. The books at Strand often have handwritten reviews by the bookstore staff and tags on the shelves with phrases like “Suggested by President Obama” and “Elon Musk’s favourite read”. We are far more likely to choose a book that is recommended by someone we know, trust and/or respect. Book in hand, we have a return flight to catch.
From flights and accommodation to restaurants and bookstores, there have been multiple moments where we have been nudged. Next time you travel, look out for these and more.
P.S. There’s one last behavioural principle worth mentioning. I delivered this information to you as a story. The human brain loves stories. In fact, research has shown that storytelling can activate up to seven regions of the brain, while talking to facts and figures only stimulates two regions. Ultimately, storytelling is not only more engaging, but it’s also more memorable which makes it a great communication tool.