nUDGE

Your Way To Success!

The Secret to Changing Consumer Behavior!

Joe Barnes@joebarnesnull

nullTyranny of Choice!

http://www.economist.com/node/17723028null

http://mommylife.net/archives/2012/03/18/Too-many-choices.jpg

Behavioral Economics

PHOTO: http://stemgenex.com/blog/adultstemcelldiscoveredinthebrain.htmlnull

Penguin Books, 2008ISBN: 978 0 14 311526 7WHY IS THIS IMPORTANT?

Choice has some of life's biggest personal decisions.

Internet dating to having a child to choosing what to buy.

nullWhats The Definition of Nudge?nullNudge: Dictionary DefinitionTo push slightly or gently, to get someone's attention, prod someone into action, etc.

nullNudgeThaler and Sunstein define a nudge as altering peoples behavior in a predictable way without significantly changing their economic incentivesnullhttp://ssrn.com/abstract=1883243SO WHAT DOES THAT MEAN?nullNudgeNudges are about designing choices to try to help people make choices in a more simple way.

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The Marketingof the NudgeNUDGE: Behavioral EconomicsAbout choicesHow people make choicesLimiting Choice!Assumes people have limited timenullNudgingNUDGE: Behavioral EconomicsCreate more effective messagesHow we name their choices (Naming Conventions)Change way we motivate consumersHow to nudge people into a commitmentnullNudgingNUDGEIN A CONSUMERSETTINGnullNUDGE: Behavioral EconomicsnullNudge ExampleWhich Cheese Would You Buy?

nullNudge Example

Studies show most people tend to choose the second most expensive item on the list.http://thebusinessofadvertising.blogspot.com/2010/04/choice-architecture-and-advertising_9693.htmlSO WHAT DOES THAT MEAN?

HOW YOU FRAME PRICES MAKES A DIFFERENCE!nullNudge: FramingGym Memberships:

Do you want to spend $600 for the annual membership or$12 week?null

PHOTO: http://blog.livewellmarket.com/wp-content/uploads/2012/07/workout.jpeghttp://www.rotman.utoronto.ca/-/media/Images/Programs-and-Areas/behavioural-economics/GuidetoNudging-Rotman-Mar2013.pdfEXAMPLE

HOW TO MOTIVATE PEOPLE THROUGH A NUDGEnullNUDGE: Behavioral EconomicsnullNudge a Commitmenthttp-www.youtube.comwatchv=cFdCzN7RYbw

SO WHAT DOES THAT MEAN?

PEOPLE WILL MOVE FORWARD IF YOU ASK FOR A SMALL COMMITMENT FIRST! FIRSMAKES A DIFFERENCE!null4 Types of NudgesMindful nudges guide people to a more controlled state such as eating healthier, stop smoking, exercising and saving more money.

Mindless nudges use emotion or framing to sway decisions that people make.

Encouraging nudges facilitate the implementation or continuation of a particular behavior.

Discouraging nudges hinder or prevent behavior that is believed to be undesirable.

nullhttp://www.rotman.utoronto.ca/-/media/Images/Programs-and-Areas/behavioural-economics/GuidetoNudging-Rotman-Mar2013.pdf4 Types of NudgesMindful nudges guide people to a more controlled state such as eating healthier, stop smoking, exercising and saving more money.

Mindless nudges use emotion or framing to sway decisions that people make.

Encouraging nudges facilitate the implementation or continuation of a particular behavior.

Discouraging nudges hinder or prevent behavior that is believed to be undesirable.

nullhttp://www.rotman.utoronto.ca/-/media/Images/Programs-and-Areas/behavioural-economics/GuidetoNudging-Rotman-Mar2013.pdf4 Types of NudgesMindful nudges guide people to a more controlled state such as eating healthier, stop smoking, exercising and saving more money.

Mindless nudges use emotion or framing to sway decisions that people make.

Encouraging nudges facilitate the implementation or continuation of a particular behavior.

Discouraging nudges hinder or prevent behavior that is believed to be undesirable.

nullhttp://www.rotman.utoronto.ca/-/media/Images/Programs-and-Areas/behavioural-economics/GuidetoNudging-Rotman-Mar2013.pdf4 Types of NudgesMindful nudges guide people to a more controlled state such as eating healthier, stop smoking, exercising and saving more money.

Mindless nudges use emotion or framing to sway decisions that people make.

Encouraging nudges facilitate the implementation or continuation of a particular behavior.

Discouraging nudges hinder or prevent behavior that is believed to be undesirable.

nullhttp://www.rotman.utoronto.ca/-/media/Images/Programs-and-Areas/behavioural-economics/GuidetoNudging-Rotman-Mar2013.pdf4 Types of NudgesMindful nudges guide people to a more controlled state such as eating healthier, stop smoking, exercising and saving more money.

Mindless nudges use emotion or framing to sway decisions that people make.

Encouraging nudges facilitate the implementation or continuation of a particular behavior.

Discouraging nudges hinder or prevent behavior that is believed to be undesirable.

nullhttp://www.rotman.utoronto.ca/-/media/Images/Programs-and-Areas/behavioural-economics/GuidetoNudging-Rotman-Mar2013.pdfnullNudge By Asking The Right Questions!nullNudge By Asking The Right Questions!2009: Daniel Pink

Drive: The Surprising Truth About What Motivates Us

nullNudge By Asking The Right Questions!People want choice.People want autonomy.Autonomy leads to engagement. Use non-controlling language.

nullNudge By Asking The Right Questions!

https-//www.youtube.com/watch?v=WAL7Pz1i1jU&feature=youtu.beNUDGE: Behavioral EconomicsScience shows we are likely to reciprocate when someone does something nice for us!Restaurant tipping example.nullNudge: ReciprocationNUDGE: Behavioral EconomicsnullNudge: Reciprocationhttp-www.youtube.comwatchv=cFdCzN7RYbw

CAN WE HAVE TOO MUCH OF A GOOD THING?

TOO MANY CHOICES?

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Participants choosing from a selection of 30 chocolates instead of 6 chocolates were more dissatisfied and regretful of the choices they made.nullIyengar, S. (Columbia) & Lepper, M. (Stanford), 2000, When choice is demotivating: Can one desire too much of a good thing? Journal of Personality and Social Psychology, 79, 995-1006

nullhttp://www.slideshare.net/rnja8c/paradox-of-choice-2139360?from_search=12The paradox of choice:Too many good options?nullToo many good options?

http://blog.rejoiner.com/wp-content/uploads/2012/08/choice.pngnull

Decision Paralysis!NUDGE: Behavioral EconomicsAs the number of choices keeps growing, negative aspects of having too many options begin to appear. nullToo Much of a Good Thing?

Psychologist and Author Barry Schwartzhttp://www.swarthmore.edu/SocSci/bschwar1/Choice%20Chapter.Revised.pdfNUDGE: Behavioral EconomicsAs the number of choices grows further, the negatives escalate until, ultimately, choice no longer liberates, but debilitates.nullToo Much of a Good Thing?

Psychologist and Author Barry Schwartzhttp://www.swarthmore.edu/SocSci/bschwar1/Choice%20Chapter.Revised.pdfnullToo Many Choices Isnt Good!

https-//www.youtube.com/watch?v=VO6XEQIsCoMPsychologist and Author Barry SchwartzWHAT DOES THAT MEAN?

TOO MANY CHOICES CAN LEAD TO DECISION PARALYSIS!null

ONE BUSINESS HAS FIGURED OUT THE SOLUTION!

WHICH ONE?nullnull

nullKetchup: One Choice

nullMixed Nuts: One Choice

nullWiper Blades: One Choicenull

Cherry Tomatoes: One Choicenull

Golf Clubs: One Choicenull

SIMPLICITY IS GOODhttp://www.slideshare.net/rnja8c/paradox-of-choice-2139360?from_search=12null

http://www.slideshare.net/sgmitch/nudge09null

When a national survey included this question, it increased purchase rates by 35%.http://www.slideshare.net/sgmitch/nudge09

THE WORDS WE USE

NAMING CONVENTIONSnull10 out of 100 die.vs.90 out of 100 are cured.nullNaming Conventionsnull

(c) MOZ.com

Naming ConventionsHamburger90% Fat Freevs.10% FatWhich Do You Want to Eat?nullnull

http://www.slideshare.net/sgmitch/nudge09null

VISUAL CLUESTHE NUDGEnullhttp://www.youtube.com/watch?v=OaLGg1wYztk

NPR:

Urinalflypeel-off flies for school and home bowlsnullThe NUDGE Workshttp://www.npr.org/templates/story/story.php?storyId=121310977

NudgeNudging Is Also AboutWhether You Give Consumers A Choice or You Give Them a Default Choice Automatically.

nullEXAMPLEnullNudgeLarge railroad Europe made small change to its website so seat reservations would be included automatically with ticket purchases (at an added cost of 1-2 euros), unless the customer unchecked a box on the online booking form. .9% of tickets included reservations before the change, 47% did after, earning the railroad an additional $40 million annually.

nullGoldsteinJohnsonHerrmannHeitmann_NudgeCustomers_HBR08.pdfSO WHAT DOES THAT MEAN?

Use a NUDGE as a smalldefault setting forany product/service thatprovides benefits to consumers.nullGoldsteinJohnsonHerrmannHeitmann_NudgeCustomers_HBR08.pdfHow Nudge Is Used In PoliticsnullnullThe Victory Lab: The Science Behind WinningCampaignsSasha Issenberg - Columnist for Slate

http-//www.youtube.com/watch?v=FnDoRNV4i_ISO WHAT DOES THAT MEAN?

ASK FOR A NUDGEnullNUDGEOnlinenullnull

(c) MOZ.comDemonstrate Social Proofnull

From: Get Satisfaction

(c) MOZ.com Play The Name Gamenull

(c) MOZ.comFlip Everything!null

From: Social Media Examiner(c) MOZ.comLimit ChoiceTOO MANY CHOICESnull

Check out this study: http://www.staging.omniture.com/en/resources/articles/conversion/ringcentral_boosts_conversions(c) MOZ.comLimit ChoiceNUDGE:Fewer ChoicesLead to More ActionWHAT DOES THAT MEAN?

DECISION ARCHITECTURE

An effective design enables people to easily focus on the right things and make meaningfulevaluations.nullhttp://uxmag.com/articles/decision-architecture-designing-for-decision-makingnull

(c) MOZ.comNudge Over Time, Not All At OnceSO WHAT DOES ALL OF THIS MEAN?

nullMAKING DECISIONS CAN BE DIFFICULT.

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http://www.drbsystems.com/public/resources/market_view/images/marketview_36_confusion.jpgTHE MORE CHOICES WE HAVE, THE MORE DIFFICULT THE DECISION.nullMAKE IT EASIER FOR CONSUMERS

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Joe Barnesthank you!