This week the Nobel prize for Economics was awarded to Professor Richard Thayler for his nudge theory, which combines behavioral science and economics to achieve change or policy shifts.
In essence, Professor Thayler proposes using positive reinforcement and indirect suggestions, rather than 'heavy-handed' instructions to influence people and their decision-making. It can be used in a variety of scenarios, the most common example being quoted is in tackling obesity and encouraging people to buy the healthy option in a supermarket.
Traditional thinking has been to warn people about making the unhealthy choice. Some have even advocated using a red, amber and green food 'signposting' system so you can see what is good and not so good. Using the Nudge theory, the salad or healthier choices, are obvious - placed on shelves at eye level, making it an easier selection.
His book with Cass Sunstien, 'Nudge', is pretty much required reading for every professional marketer and policy-maker these days.
David Cameron famously set up the Behavioural Insights Unit (the Nudge Unit) which, among other things, radically improved response rates for tax returns and organ donorship in the UK - all with a slight tweak to the messaging
How is the nudge theory applied in marketing communications? Famous examples include - "When it's gone it's gone!" offers in supermarkets - which plays to our desire for scarce resources; the sign in your hotel room that urges you to reuse your towel with the effective, "Join your fellow citizens in helping save the environment - which plays to our herding instincts - and thousands of others besides. In the online world, this has become a fundamental principle adopted through 'conversation rate optimisation' using subtle cues such as the colour of a button or the positioning of a box to direct the eye and behaviour.
If you're now thinking of joining the thousands of others reading his book - well, you have just been nudged ;) Powerful work indeed.
Prof Thaler's central insight is that we are not the rational beings beloved of more traditional economic theory. Given two options, we are likely to pick the wrong one even if that means making ourselves less well off. Lack of thinking time, habit and poor decision making mean that even when presented with a factual analysis (for example on healthy eating) we are still likely to pick burger and chips. We're hungry, we're in a hurry and burger and chips is what we always buy. Nudge theory takes account of this, based as it is on the simple premise that people will often choose what is easiest over what is wisest.