Marketing and psychology go hand in hand. Both require a strong understanding of people. Many corporations and political parties are highly aware of this. They employ psychologists to compliment their marketing team specializing in nudging people to take desired actions. These strategies are known as nudge marketing with practitioners labeled choice architects. Marketers are also using these techniques to nudge customers into choosing their product or service as well as build customer loyalty.
In order to persuade people to buy your product, you must be able to understand their motivations and behaviour. Most importantly marketers must be able to convince consumers to take action and actually purchase the product. Governments are also increasingly turning to behavioural science to persuade people to vote for them as well as adopt policy changes.
Nudge marketing works most effectively when used for good, creating a “win-win” for both the choice architects and individuals. This could be nudging consumers to buy more fruit and vegetables to improve their health or helping consumers make easier choices through simple pricing and store layouts.
What is Nudge Marketing
Us humans are both a crazy and narcisstic bunch. We like to think that we’re in complete control of our own thoughts. We make rational choices and don’t fall prey to bias or emotional decision making. Other people get fooled not us! This is rarely the case. In reality, we conduct most of our day to day decision making in autopilot mode to conserve our cognitive resources. If we spent our whole day thinking everything through rationally we’d be exhausted.
Imagine going to a supermarket and agonizing which type of bread represents both the best quality and value for money. No, we’d rather just go with the default option or whatever is on sale. Some of the smartest business people take extra steps to minimize their cognitive stamina by wearing the same clothes most days like Mark Zuckerberg.
So, most neuroscientists have concluded that we have two modes of thinking. Our conscious thinking brain and our unconscious. They are:
System 1 Brain
Our system 1 brains are primitive, quick and intuitive. Often they’re beliefs, ideas and ways of behaviour governed by our lives, personal experiences as well as collective unconscious. We remain mostly unconscious to these leanings. Whenever you buy a product you do not need because it was on sale then this was your system 1 brain making the decision.
Marketing nudges activate our automatic brain systems. They take advantage of those who primarily rely on their intuition and make snap decisions without excess thought. Images of lung cancer on the side of cigarette packages speak directly to our system 1 brain priming us to feel guilt or disgust at smoking and creating cognitive dissonance.
System 2 Brain
This brain system is more methodical, logical and reflective. System 2 brains weight up probabilities when making a decision and love facts. Our system two brains often awake when we have an important decision to make. This could be making an expensive purchase, choosing a school for your kid, or picking an accountant. Facts drive nudges targeting our logical brains.
Examples of nudge marketing can be seen in government policies like including warnings on cigarette labels that smoking increases your likelihood of getting cancer by 52%. In the commercial realm, many companies include survey results in their ads and packaging such as 9/10 people who tried this product said this product made their skin softer.
Choice Architects at Work
Political groups and corporations have allocated large amounts of capital spending to neuroscience and psychology. The more they can understand people the better they can both control and direct them. many employ choice architects whose sole responsibility is to analyze the public and create systems that nudge them to take behaviours which benefit the company or political group. This could be improving decesions about health which decreases government spend combatting obesity. For corporations, it could also concern attracting consumers to buy their product or choose their brand vs the competition or encouraging customers to buy more.
In some professions, their job is to be choice architects even if they aren’t aware of it. Doctors and Lawyers are great choice architects. If you have prostate cancer it is the doctors’ job to help you make the choice to make a decision that is of best benefit to your health and well being. This is often a difficult choice and quite nuanced. Lawyers equally use their experience and knowledge of the law to advise you on the best way forward in a case. E.g In criminal law you could plead guilty and receive a comparatively light jail sentence or plead innocent but be found guilty and receive a heavy jail sentence.These choices are based on facts and probabilities.
The Use of Nudge Theory in Retail
In retail, a lot of investments goes into choice architecture and taking control of the customer buying process. Stickers on the floor point and lead consumers to certain directions. Fresh fruit and veg on entry also cultivate perceptions of a fresh store. Choice Architects and Neuroscientists influence everything about the customer in-store experience and control decision making through in-depth consumer research. Choices such as shelf space and product location significantly impact sales. Products at eye level sell better. More shelf space for products also increases the likelihood of purchase.
In e-commerce stores, whats at the top of a page is vitally important. It creates the first impression for visitors. Bright colours also serve to attract peoples eyes towards intentional hotspots on a page. Suggesting popular items to customers prime them for purchase based on social proofing. Then you have – ” Other customers also bought these” which is a further form of crowd psychology. Sale deadlines and countdowns also encourage impulse purchases eliciting FOMO (Fear of missing out) in consumers minds.
Much of this blog was influenced by my studies of nudge theory and the brilliant book “Nudge: Improving Decisions About Health, Wealth, and Happiness” by Richard Thaler. In next weeks blog, I will continue this discussion and look at examples of nudge marketing used by companies.