Outline:
- A nudge is an environmental prompt that changes our behaviour;
- Companies constantly use them in marketing;
- Awareness of this can allow you to find opportunity.
Nudge theory is a concept in behavioural science, political theory and economics brought to prominence by American Economist Richard Thaler and Legal Scholar Cass Sunstein.
In short, a nudge is any small feature in the environment that attracts our attention and influences the behaviour that we make.
Here is a short video to give you some context.
As mentioned above, a nudge is used to encourage certain life decisions. How many of your life decisions are influenced by nudges? How many times a day are you nudged?
In this post, I’m going to take you through an average day and give you a few examples of when are where you are nudged.
Let’s say you start your day at the local shopping mall. The supermarket is the first stop, and as you enter you walk straight into the fruit and vegetable section.
Here we have our first nudge. This positioning is intentional, it's designed to encourage grocery shoppers to buy more fruit and vegetables, and promote healthy eating.
While you are in the supermarket, you see your usual vegetable soup on sale. It has dropped from 89c a can to 79c a can, a good saving so you decide to purchase three cans.
You then see a sign stating “limit of 12 cans per person,” since this looks like a deal not to be missed, you decide to add in a few more cans as you want to take advantage of the lower price.
This was a nudge used by Campbell's Soup in 1998. The addition of the sign activates the idea of a good deal more so than the cheaper offer alone. It resulted in an increase from 3.3 cans per buyer to 7 cans per buyer.
After the supermarket, you decide to buy a new shirt at the clothing store. As you walk in, you see an offer for “3 shirts for the price of 2”.
You decide this deal is too good to pass up, and instead of leaving with one shirt as intended, you spend more money and go with three.
This is a very common nudge used in all retail environments to urge you to spend more.
As you leave the clothing store, your bladder is feeling full, so it’s time to relieve yourself.
Men will know that aiming is not something everyone is blessed with. Luckily, on the urinal, there is a pesky fly, so you immediately set your target and don’t lose sight of it until you are finished.
This is arguably the most famous example of a nudge.
In the early 1990s the Amsterdam airport cleaning staff complained about the mess around the men’s urinals. To solve the issue a little sticker of a fly was placed in each urinal to give the users something to aim for. It is reported that spillage was reduced by 80%.
After the bathroom, you decide to grab some takeaway food and eat your lunch at the local park.
When looking at the menu, you notice that there is a little number next to each option listing the number of calories that choice contains.
With this in mind, you go for a salad, a healthier alternative with fewer calories. This is another nudge designed to push you to make healthier food choices.
After you are finished with your salad, you aren’t sure where the bin is. Just as you are about to leave the rubbish somewhere discreet, you notice green footsteps on the ground, when you follow them they lead you straight to the bin.
This was a nudge used in 2011 in Copenhagen, successfully resulting in a 46% decrease in littering.
As you are driving home, you approach a notorious corner, well known for accidents. This time though, there is a difference, horizontal lines have been painted on the lanes as you move towards the bend.
They appear to become closer and closer together, giving you the illusion that you are going faster, so you slow down and drive safer than you usually would. This is a common nudge designed to influence drivers to be safer.
You arrive home and notice the electricity bill in the mail. This time your provider has compared your usage to your neighbours. Unfortunately, your neighbours have used less electricity than you, so your provider has included some tips on how to reduce your usage.
This was a nudge used by Opower in the US in 2011, encouraging their users to be more green with their energy. By doing so, Opower saved its users a combined total of $250 million.
After you get over the disappointment of losing to your neighbours, you decide to get a handle on your superannuation. So far you have always gone with the default super fund that your employer has picked for you. You now have numerous funds, paying numerous fees and you have no idea where it all is.
The default option is designed to nudge people to go with a particular choice as generally, they will choose the option that is given to them.
Luckily you can create a Spaceship account with a few personal details and your tax file number. We can then find all of your Super for you, and if you wish, you can roll it all over to Spaceship with one click.
