Nudge marketing and dual process theory in consumer decisions

Nudge Marketing & 4 Tips for “Nudging” Customers Effectively

If you know anything about nudge theory, you know it’s a bit controversial. If you don’t know anything about nudge theory, let’s start by thinking about all the little decisions you make throughout your day. How many decisions do you control? You might be quick to say “all of them”, but I would suggest you consider the autonomous act of breathing. Did you make a conscious decision to breathe today when you woke up this morning?  

In Psychology, the phenomenon where actions and decisions we make seem to happen outside our conscious control, though still fully aware of others, is known as Dual Process Theory (DPT). DPT is the foundation of nudge theory. DPT explains what happens when we act, unaware that we are doing so. It also explains how we are equipped with the tools to make an otherwise unconscious act conscious to us, or even change the context so we can choose another, possibly better path without thinking about it.

Think about what happened when I asked you if you chose to breathe this morning or not. Did you immediately become aware of your breath? Did you begin to breathe a bit deeper? Is it possible you began to breathe deeper and didn’t even realize it? That is DPT in action.

Dual Process Theory in the Brain

Our brain works in two different ways. Those two ways happen simultaneously and are handled by separate parts of the brain. One is called the automatic system and the other is called the reflective system. These two systems reflect different ways of handling information and forming responses.

It has been eight years since the book Nudge, by Richard Thaler and Cass Sunstein, was published. Since then, “nudges” have become a widely used marketing and consumer influence strategy. Nudge marketing refers to deliberately manipulating how choices are presented to consumers in order to steer them toward only the options you WANT them to take or with the simple goal of stimulating purchases.

The double cheeseburger in dual process theory and marketing

Here are a couple examples. A burger place has a single patty burger that looks rather small on the menu, and a triple patty burger that looks excessive. These two are there as decoys for the choice they REALLY want you to make; the DOUBLE patty burger, which is most likely a profit center for them. A grocery store places plastic mats with large arrows marked “Follow the green arrow for your health…” directing shoppers to the produce. Within two weeks, produce sales increase by 10%. Maybe a company automatically enrolls new employees in its retirement savings plan with the option for the employee to opt-out if they want. Enrollment obviously rises from 60% to 95%.   

Now, if you ARE aware of nudge marketing (and now all of you should be), you know that doing it poorly can backfire. As marketers, we should have some fundamental concerns about the practice. Improperly planned and thought out nudges can hurt a company’s credibility and tarnish its reputation.

For instance, nudging can come off as condescending. By its nature, a nudge is intended to make a buyer’s current behavior seem inferior to the behavior you want them to take. In other words, “unless you accept my nudge, you’ll be doing it wrong.” Whatever “it” is. In other words, a nudge assumes if the grocery store didn’t put a literal “path to health” on their floor – their customers wouldn’t buy produce.

Many argue that if nudging runs the risk of being condescending, the better option would be motivating and empowering your customers to make decisions for themselves. Encouraging your customers to set goals and implement processes with your products or services works far better to build lasting relationships than manipulation.

However, if you know anything about sales and marketing – indecisiveness is a huge barrier to conversion. And there are ways to nudge your online customers into making a choice by making it easy for them to take another look. Sending someone a personalized email about a new feature/benefit of a product they talked to you about last month, or having an ad pop up in their sidebar about an item left in their cart, can mean the difference between your customer engaging in the buying process again, or leaving it altogether.

Arrow representing nudge marketing and dual process theory

Guide them, don’t manipulate them

Nobody likes an aggressive salesperson. By leaving “arrows” to guide your customer down a path and allowing them to choose to walk down it, you help customers follow their own interests, make their own decisions, making the purchase their own idea. If you nudge in little steps, proving slowly over time that you have quality and consistency, your customers will come to you.

Don’t condescend, inflate their ego.

Find what motivates your audience and appeal to THAT. If your goal is to help your customers be healthier, then instead of guilting them into better health by saying “Right now you’re not eating enough fruits and vegetables. You should be eating more.” try saying “You want to eat healthy, and we have the best produce in town to help you do that (what you ALREADY want).”  

produce in the grocery store representing good habits in nudge marketing

A nudge + motivation = the BEST combination

When using nudging to influence customer behavior, we must fully understand its proper applications as well as its limitations. The benefits of nudges are likely to be amplified, while at the same time neutralizing their dangers, when nudges are used in combination with effective motivational psychology tools as well. We shouldn’t just put a path to the produce aisle on the floor; we should place guides to eating healthier, easy to make recipes including fruits and veggies, and tips on how to get your kids to eat more vegetables throughout the produce area to help our customers form those habits long-term (therefore selling more produce long-term as well).

Nudges aren’t for everyone. BAD nudges aren’t for anyone.

Good marketing is relational marketing. Effective relational marketing is placing the marketer (or company) on the same level as the customer. If marketers employ a nudge to influence customers, they run the risk of claiming superiority over them. Motivational psychology shows us that differentiation is unnecessary and entirely less effective. Know your audience and how they’ll respond to different marketing techniques. Any goal can be achieved (and probably at more significant returns) by treating customers as equals and empowering them. We need to equip them with motivational tools while using them alongside well-designed nudges.

If you don’t know how to nudge effectively, seek help, or just don’t. The risks you’re taking by doing it poorly are too great. In other words, are you helping your customers to be great, or are you telling them they’re not great if they don’t choose your product? Happy nudging!