What is Nudge Marketing?
Nudge Marketing is used to influence customers’ decisions indirectly through suggestion and reinforcement. Marketers use subtle interventions to adjust a specific “Choice Architecture,” making particular outcomes more likely. As demonstrated by Daniel Kahneman and Richard Thaler, most decisions are based on biases and guesswork. Nudge marketing offers businesses a way to communicate more effectively.
Richard Thaler, Nudge (2008):
A nudge … is 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.
What is Nudge Marketing
- Keeping the Schipol Airport Toilets Clean
- Encouraging Healthy Eating in the Google Canteen
- Getting People to Walk on the Underground
- Overcoming E-commerce Obstacles
Nudge Marketing applies Richard Thaler’s theory of Nudges to marketing scenarios. In the case of Nudge Marketing, the Choice Architecture being adjusted is the decision faced by a consumer.
The technique acts on specific ‘levers’ to influence consumer choices and actions. These ‘levers’ include irrational biases such as Attention Bias, Cognitive Availability, and Cueing. For marketers, this provides a low-cost method of shaping behaviour.
Nudges do not trick people or persuade a customer to make a purchase. In fact, people are usually perfectly aware that they are being Nudged. Rather than coercing people, Nudge Marketing shapes the decision-making context to make some choices easier than others.
Media coverage of Nudge Theory and Nudge Marketing has been predictably dramatic. Some journalists have presented it as a miraculous way to improve public life and health. Others have worried about its effect on free will and rational choice.
The reality is that Nudge Marketing is very difficult, often clumsy, and people almost always know exactly what is going on.
Here are some examples of Nudges in action
Schiphol airport in Amsterdam wanted to reduce “spills” in the toilets and reduce cleaning costs. To do this, they etched an image of a Fly into each urinal, encouraging men to direct their aim towards the centre.
No fine, no instructions, just a fly to aim at. The result: an 80% reduction in spillage.
Google is known for its “Free Food” policy (“Whoo hoo! all-you-can-eat meal!”) However, free snacks and big lunches made it harder for employees to stay healthy.
To address this, Google adopted a number of nudges to reshape the Choice Architecture facing its employees.
- They made the sweets containers in their canteens opaque so that the contents were less obvious. Following this, sweet-snacking decreased by 9%
- They moved salad to the front of the canteen buffet and placed sugar-free drinks at eye-level in their fridges. Because of this, calorie intake reduced by 7%
People often make choices based on the order in which options are presented. With simple Nudges, Google was able to reshape its employees’ eating habits.
The benefit of a small amount of exercise is well established, so a number of cities have introduced Nudges to encourage travellers to use stairs rather than escalators.
The Metro in Stockholm turned its stairs into a grand piano resulting in a 70% increase in use.
Another example is the Underground in Hamburg. The city turned the stairs into a running track so that commuters could feel like athletes.
Nudge Marketing now plays an important role in the whole digital marketing mix. If you are experimenting with website design, implementing nudge notifications is a great place to start. For Shopify users, our specially designed app Nudgify offers an easy way to shape the Choice Architecture facing your customers.