Making The Default Choice
Behavioral Economics is the study of how psychology affects the decision making of individuals and groups and at Campos, we’re constantly working with clients who want to direct customers in one way or another. It’s a basic tenant of Customer Experience Planning.
We’re always looking for methods to ensure that customers are guided through a path that ensures they get what they need, when they need it, and in the ways that they need it. We’re well versed in the concepts of Behavioral Economics, because the field offers so many valuable insights into decision making and experience design. Using Behavioral Economics in CX Planning can help ensure that customers are given the best opportunities along their product journey.
There are many ways to put behavioral economics to use, but the most common example of using the insights from Behavioral Economics in practice is that of the “default choice.” In systems where people have an option, but one option is clearly preferred, the opt-out is less likely to happen. People are much more likely to keep the default rather than actively select a different option.
This can be done is ways that are clearly positive. Automatic registration in 401k plans for workers makes it much more probable that they will save for retirement. If being an organ donor is the default when getting a drivers license, more people become organ donors. But one needs to look no further than the default price hikes after two years in a cable package to see the other side of the coin.
This and other methods of guiding behavior are popularly know as “nudges” from a book by the same name that is one of the basic books on behavioral economics. The book was written by economists Cass Sunstein and Richard Thaler, who won that the 2017 Nobel Prize in economics.
They argue that many individuals welcome nudges that help them live better lives. Their research shows that most people don't share that the concern that nudges, as such, should be taken as manipulative or as questionable interference with autonomy. By contrast, many people oppose mandates and bans, seemingly on the fact that they limit freedom. They conclude that, if we really care about welfare, autonomy and dignity, nudging is the best and most ethical manner of influencing behaviors.