Everything you wanted to know about nudge theory

They say suggestion is a far more powerful means of getting what you want than demands. It’s a theory that has been proven, time and again, in everything from advertising to politics.
Let’s look at it like this- Communism, the only alternative mode of governance to Capitalism for the last 100 years, was all about instruction. OK, perhaps that’s over simplifying things, but this is how the ideology was realised in the countries that adopted it.
People were given few choices, and instead told to work here, buy from these manufacturers, and live like this. The problem was, it didn’t sit well with the human psyche. After all, nobody really likes being told what to do. Rebellion and collapse ensued.
In contrast, Capitalism is all about freedom- or at least the ideal of freedom. Intellectual debate aside, when all is said and done, you walk into a shop and have options- the ability to make decisions for yourself on what to buy. Yet we are still directed towards certain purchases, favouring those over them.

Back in the day

For a second allow us to spin the clock back. And by that we mean way back. Consider adverts from the 1950s, or even 1970s. More often than not these were all about telling you one product would deliver one lifestyle. Smoke Marlboro to be the tough guy pioneer. Drink Guinness for a longer life. You get the picture.
Now jump back into the present day. Thanks to some much-needed tightening of standards, companies are no longer allowed to make statements unless they can prove them- so no more claims that stout will stave off gout. Nevertheless, we are constantly surrounded by implications and suggestions from brands and businesses. Or, to put it another way, consumers are consistently nudged towards certain decisions.

Choice architecture

Nudge theory is a concept in behavioural science which has had a huge impact on the way marketing works. First used in cybernetics by James Will, in 1995, authors Richard Thaler and Cass Sunstein describe the overall idea as:
Any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.???

Everyday examples of nudges, outside ads

Urinal flies
Originating in the home of European innovation, the Netherlands, tiny etchings of flies began appearing in the toilets of Amsterdam’s colossal Schipol Airport. The idea was to highlight the relationship between cleanliness, bacteria, and health. Amazingly, spillages on the floor dropped by 80%, hence these little pests now being found in bathrooms across the world.
Duct tape trollies
Widely recognised as the first grocery store nudge, a shop taped off a section of its trollies, and placed an instruction for customers to put fruit and veg in one part, and all other goods in the other. But wait- we thought nudges weren’t instructions? Here’s the genius bit; the idea was to boost sales of fruit and veg, not change how people carried them- a 102% increase in till receipts for apples, oranges and the like was recorded.
The limited time offer
Arguably the most widely used nudge of all is the ‘one-time offer’, which has also caused some controversy, not least in the world of wine. A product begins its life with a high price, but is actually meant to be sold at a far lower rate. Hearing or seeing both together implies a great deal, making you far more likely to buy, even if the money the retailer is asking for is more than you actually intended on spending in the first place.

Why should I care?

The potential impact for businesses using nudges properly is huge. You can quite easily turn a struggling product or service into a success story with the power of suggestion; planting a seed in the mind of the public.
The title of this section, for instance, is itself a nudge- ’why should you care?’- the implication is that you should obviously care, and the reason behind caring is explained in this part of the post.
This is important for all companies, especially now we have reached a point in history where traditional advertising and marketing are experiencing a decline influence. We can no longer rely on simply saying ‘this product is great’, because chances are there are alternatives, perhaps at a lower price point. We need to make sure our product or service is noticeable at the right moment, leading to improved pick-up and usage rates.

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