Nudge, nudge – why choice architecture’s falling out of marketing fashion

The field of marketing, like anything else, is subject to its fair share of trends. Ideas and concepts come into fashion, some people jump on board, some decide it’s not for them, and soon enough, like last season’s must-have piece of apparel, people drop it and move on to the next shiny new thing.

If you’ve been in marketing long enough you’ll have seen this process happen more than a few times.

So it’s interesting to see a few articles pop up recently about nudge marketing. In case you’re not familiar with the term the concept of the nudge really came to prominence around 2008 with the publication of Nudge: Improving Decisions about Health, Wealth, and Happiness.

(Funnily enough, Facebook’s “poke” was also making itself known in the mid to late 2000s – must have been something in the air…)

The book, by Richard Thaler and Cass Sunstein, became one of the holy texts of behavioural economics. Marketers were impressed by the psychological arguments put forward by the authors on why and how people are persuaded to do and not do things, and many marketers incorporated nudge thinking into their strategic framework.

So what’s a nudge? This is how Thaler and Sunstein define it:

A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.

A lot of people jumped on the nudge bandwagon after the publication of the book and behavioural economics quickly became a hot button topic in the business world. The appeal was obvious from a marketing perspective. Here was a clever way of influencing consumers without resorting to whacking them over the head with the blunt object of the hard sell.

While the concept of “choice architecture” has been successfully applied to plenty of marketing strategies, it’s effect seems to be on the wane with many consumers, according to Utpal Dholakia, a professor of marketing at Rice University’s Jesse H. Jones Graduate School of Business.

In an article for the Harvard Business Review, Dholakia has identified a kind of nudge fatigue among consumers, as well as the fact nudge marketing has been too often poorly applied.

In their enthusiasm, marketers have overlooked some fundamental concerns about using nudges. A company that doesn’t understand these minefields could adversely affect its marketing. Nudges that are poorly thought out could be ticking time bombs waiting to explode and damage the company’s reputation and credibility among its loyal customers.

He cites three main reasons for why the nudge doesn’t always lead to a budge in consumer behaviour:

1. Nudges can be condescending
2. Even when they “work,” they may not achieve the ultimate goal
3. They’re really, really hard to get “just right”.

Like the well-meaning parent who persistently suggests the best options for their child, nudges can come across as paternalistic.

In fact, Thaler and Sunstein acknowledged as much in their book, and they were far more circumspect about the applications of choice architecture in commercial settings than in the public sector / government agency domain.

They labelled what they were doing as “libertarian paternalism”, which throws up all sorts of problems when applied to consumers who don’t want to feel talked down to:

We are keenly aware that this term is not one that readers will find immediately endearing. Both words are somewhat off-putting, weighted down by stereotypes from popular culture and politics that make them unappealing to many. Even worse, the concepts seem to be contradictory. Why combine two reviled and contradictory concepts? We argue that if the terms are properly understood, both concepts reflect common sense—and they are far more attractive together than alone. The problem with the terms is that they have been captured by dogmatists.

It’s this sense of paternalism that might be undermining the efficacy of nudge marketing at this point, as people have become wiser to the technique.

Another factor is that smartphone usage has increased exponentially since 2008, putting ready at hand information about pretty much anything in the pockets of consumers via a quick Google search.

Instead of having a marketer suggest the best option for you via some clunky choice architecture, most consumers now do their own research and act on what Google says.

As another marketing academic, Professor Leslie Chernatony, puts it in his article for The Drum: “Marketers must remember that one man’s nudge is another man’s unnecessary and annoying poke. The consumer will ultimately decide what they find relevant and of value, not your creative technologist.”

That’s not to say we’ve seen the last of nudge marketing or choice architecture. It’s an important and often still effective part of any marketing arsenal, but it may need a bit of of a rethink in this age of the all-knowing Google consumer.

Fi Bendall is CEO of The Bendalls Group, a business that leads STRATEGY : ADVOCACY : MOBILE delivering the business acumen to drive effective positive results in a disruptive economy for the C-suite. Fi has recently won a Westpac/AFR 2015 100 Women of Influence award. See more at: https://www.bendalls.com.au/