What I Learned from Reading Nudge and How You Can Apply it to Your Product

Nudge: Improving Decisions about Health, Wealth, and Happiness is a book written by University of Chicago economist, Richard H. Thaler and Harvard Law School Professor, Cass R. Sunstein which explores choice architecture. I believe there are some valuable lessons we can apply to technology that can help your customers make good choices or help you grow your business.

What is a nudge?


In summary, the book Nudge outlines how we can impact the decision making process that humans go through every day. We intuitively believe we are fully in control of our decisions but in reality we are often guided by our environments. Thaler and Sunstein break down decision making into two categories; the reflective system and the automatic system.

The reflective system is deliberate and self-conscious, for example deciding to learn a new language or deciding which car insurance to get. The automatic system is rapid and instinctive, for example, breathing, or smiling at a relative when you see them.

Thaler and Sunstein state that humans predictably make bad choices due to their use of heuristics, fallacies, delusions, habits, addictions, and because they are influenced by their social interactions. They show us that it is possible for choice architects to affect behavior while also respecting freedom by designing the choices in a way that encourages a "good" decision while also allowing the participant the freedom to opt-out if they prefer. Thaler and Sunstein refer to this act as libertarian paternalism and argue that public and private institutes should aim to implement these changes in their systems.

One of the examples of libertarian paternalism given in the book discusses how a cafeteria could rearrange their food to optimize healthy choices or remove the trays to encourage people to take smaller amounts of food which would lead to less waste.

Help create enjoyable experiences for you children, no wait, customers.

How does this apply to web design?


The book discusses offline nudges extensively but doesn't really touch on how we can shape our digital experiences to help our consumers make good choices in our applications. As a developer this book got me thinking extensively about this concept and I noticed there are many areas where we could improve our users lives by nudging them through UI design, UX design, and communication channels.

So how can we figure out where the nudges should be?

First we have to understand our user's goals, their decision making processes, heuristics, and biases. We can start by thinking about what kind of app we are building and how it helps the user. Once we understand the users we can explore different nudge mechanisms to help them make the right decisions. While contemplating on these mechanisms we must be conscious to consider the ethical implications of the decisions we want to influence.

In piecing this all together, let's take a look at some nudges we could use in some hypothetical systems.

Oh no, I haven't activated risk detection yet!

Notifying users before something negative happens.


Often our billing systems allow users to configure recurring billing so they can set and forget it. Often these systems will notify you if the card has expired but in my experience there's a lot of room to optimize as well as some changes we could make to increase the power of the nudge.

Instead of notifying the user after the payment fails we could notify the user the day that the card expires, this gives the user more time to remedy the situation before their account either goes into arrears, or worse, is canceled. This notification should also make it as easy as possible for the user to remedy the situation; there should be a call-to-action that leads them directly to the billing page so they can update their card. What happens if the user doesn't see this notification? Well, we don't want to annoy the user, we can't assume they didn't see it, maybe they are going to do it later. What else can we do to nudge this user? How about we redirect the user to the billing page every time they log into the app? In my opinion this is more of a shove and is too assertive, and might not encourage the behavior we want. How about we show an unintrusive alert?

Your payment method has expired. Click here to update it now. x
 
This is much better; it's not forcing the user to do anything. If they want to use the app they can but they are made aware there is an issue, with an x they can click to dismiss the notification, and then not show it again until 2 days before the due date.

Make it exciting and they'll make it a habit.

Gamifying systems to help create habits


It's well known now that habits can drive extreme change and we also know how habits work

1. trigger
2. action
3. reward

After enough repetition the reward creates a craving every time the user encounters the trigger. This is why gamification is so powerful, it creates a reward mechanism that helps users hook onto the triggers.

Let's imagine we have an education platform. Obviously in this situation the goal of the user is going to be to learn. To increase the chances that our users will come back day after day we can create a trophy system and allow users to show them on their profile.

For example:

  • Complete 1 quiz every day this week to earn the "a quiz a day keeps the brain awake" trophy.
  • Complete 1 quiz every day this month to earn the "genius in training" trophy.
  • Complete 3 quizzes today to earn the "learners ambition" trophy.

    Gamifying your system could help build habits which in turn also increases a customer's lifetime value.

    Psst - did you know, customers that are habitually using your app have been shown to be less sensitive to price increases and functionality changes! It's good for your business.

    Set defaults but allow users to make their own unique choices if they want to.

Creating good defaults


One technique discussed in the book is defaults. For example, changing the default for organ donation from opt-in to opt-out would effect a positive change in the number of donations while still giving people the option to opt-out if they are against donation.

We can also create good defaults for our customers to help increase good choices, or non-choices in this case.

There's actually a great default option that is built into nearly every application we use - that checkbox when you log in that asks if you want to stay signed in! At first glance this seems inconsequential. However, when you think about the security implications, it's a really great default. Often users share computers so having to manually override this default increases the likelihood that the user won't accidentally leave their banking app logged in on their cousin's computer.

There are plenty of other situations where we could apply defaults too.

1. Preselecting the most purchased mobile data package would help users decide on a package that's good for them without needing to deliberate over all the details.
2. Preselecting to purchase insurance for the user when traveling is preferable over defaulting to no insurance.
3. Having a button that searches for hotels in the local area and a field to enter the name of an alternative town is another default that could greatly improve the experience for the user.

Defaults are one of the most subtle but simple to implement nudges that can add up to a much more enjoyable experience in your application.

It's supposed to be a nudge, not a shove!

Stay away from the dark side


In the world of web products and services there are a number of companies that are using dark patterns. If you value your customers and your brand you should stay away from these patterns.

What are dark patterns?

Dark patterns are mechanisms that trick the users into performing actions they don't necessarily want to perform. For example disguising adverts as other content in an attempt to trick the user into clicking it. Some of these mechanisms are more subtle. One that I particularly, often seen’ on hotel comparison sites, is the social proof and false scarcity e.g. "Someone in Bangkok just paid for this room" and "1 room left, get it quick before it's gone". These examples can seem innocuous but they are praying on some psychological traits we all possess that don't necessarily equate to our true desires.

Social proof encourages users that they are making a good choice because others are also doing the same, famously tested in multiple experiments where a subject would be placed in a room with actors. The tester would ask questions and the actors would respond first with obviously wrong answers, you might think you'd continue to answer correctly but the evidence suggests that you probably wouldn't. The more people that are going against your instincts, the more likely you are to conform. We have an innate desire to fit in.

False scarcity is the simulation of scarcity, it stimulates our fear of missing out and fear of loss. If you have a gut feeling something is a good deal but haven't spent time comparing to other similar deals this trick can cause an anxious reaction that increases your chance of purchasing without taking the time to do your research.

Tactics like this have short term benefits but will leave your customers feeling deceived and will potentially damage your brand.

Summary 


Now you know what to look out for, you'll see nudges everywhere and will likely see areas where nudges would help improve an experience.

I highly recommend reading Nudge, it's an enjoyable read and will give you a deeper insight into the logic in libertarian paternalism. 
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Joe Woodward
I'm Joe Woodward, a Ruby on Rails fanatic working with OOZOU in Bangkok, Thailand. I love Web Development, Software Design, Hardware Hacking.
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