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The Surprising Way Choice Architecture Drives Buyer Behaviour
You know that people make buying decisions based on their personal preferences, their past experiences, the research they’ve done and the recommendations they’ve received. But did you know there’s something else at play? Something that may seem so insignificant as to not warrant your attention?
I’m referring to the way marketers present choices to their customers and prospects. Behavioural scientists have studied Choice Architecture and they’ve amassed a mountain of research that shows that the way choices appear influences the decisions people make about them. While people think they know why they do what they do—and will even supply sensible reasons after the fact—the truth is they are often influenced by factors they are unaware of. And one of those is the way options are served up to them.
It turns out there is no neutral way to present choices. How you display information, including the number of choices you provide, the order in which you list those choices, the words you use to describe various options, the information your design and visual cues draw attention to and the ease or lack thereof that customers encounter when completing their order, all impact the decisions your customers and prospects will make. In short, Choice Architecture can help or hurt your business.
The significant impact of opt-ins and opt-outs
Researchers conducted an online study to measure whether German households would be willing to pay a little more to purchase their energy from renewable sources. When people had to actively opt into the renewable source instead of staying with their default one, only 7 per cent chose to do so. However, when customers were told they would now be receiving their energy from the higher-priced, renewable sources unless they opted out, a substantial 70 per cent accepted the new source and did not opt out.
This study suggests that if you, as a marketer, want to get people moving in a specific direction, you should carefully consider how you architect your defaults. The reason for this is that many people don’t opt in and they don’t opt out. They opt to do nothing at all, accepting the choice you make for them. As further proof of this behaviour, just consider the number of consumers that never alter the manufacturer’s pre-set cell phone and laptop defaults when they purchase those products.
The truth is, people assume they make more active, aware decisions than they actually do. I noticed this about some of my own behaviour, although only in hindsight. One day I received an email asking me if I’d pledge money to a friend who was running the Boston Marathon on behalf of a charity. It was a good cause and I immediately pledged $100. On another day, I received an email asking if I’d pledge money to a different friend’s husband, who was doing a charity bike ride to support cancer research. Again, I immediately pledged $100.
Some months later, while preparing a presentation to deliver at a marketing conference, I pulled out the screenshots of the two confirmation pages I had received. The first showed my $100 donation, followed by a $4.50 charge that I assume covered administrative and processing costs, for a total of $104.50. There had been a small orange “edit” link next to the $4.50 charge, which I could have clicked to remove the fee and bring my total down to the originally-pledged $100. But there had also been a large orange “donate now” button beneath the $104.50 total, which must have been very easy to click, because I had.
In looking at the other confirmation page, I noticed the information had been displayed differently. It showed my $100 pledge followed by a $100 total. Beneath that, there had been a small, unchecked box. The copy next to it invited me to add the cost of covering the credit card fee for my donation by checking the box. However, I apparently had not.
Now I want to stress that I believed both causes were worthy. And that I was not favouring one friend over the other. I had just been moving quickly and not exerting a lot of mental effort. As a result, I did what behavioural scientists have found many people do. I followed the defaults. In the first case, I had paid a little bit extra because it was the quickest, easiest, least effortful thing to do. And in the second case, I had not—for the very same reasons. I wasn’t really thinking. I was just doing. Therefore, the way the choices had been served up to me influenced how I responded to them.
When creating marketing campaigns for clients, I again saw evidence of the impact of Choice Architecture. By altering the default for an insurance provider, we created a 418% lift in response over the previous approach. And when doing so for a publisher, we consistently created 18-21% increases.
Three more ways Choice Architecture influences behaviour
Because people often don’t or can’t take the time to think about the decisions they make, marketers can influence their choices in a variety of ways.
- Descriptions – The words you choose to describe your product or service can make a difference in how people respond to it. In one study involving menu item descriptions, researchers found that labels such as “grandma’s zucchini cookies” and “succulent Italian seafood filet” increased sales by 27 per cent and improved people’s attitudes toward the food, the restaurant and their intention to return.
- Novelty – People are drawn to what’s different. An experiment in Sweden, that was sponsored by Volkswagen, turned the stairway leading out of a subway station into an oversized piano keyboard. Walking on each step would actually play a note. The experiment’s organizers found that the musical steps prompted 66 per cent more people than usual to take the stairs.
- Imagery – What someone sees, even if it’s only in the background, can influence their decisions. On an ecommerce site selling couches, people saw either a blue background with clouds or green background with currency. Seeing the clouds primed purchasers for comfort and they were more likely to prefer the more comfortable, more expensive couch. Seeing the dollar signs primed them to think of cost and, as a result, people were more likely to choose the less comfortable, less costly couch.
Marketers can also influence choices when you list your most expensive product first, position the service you want your target to buy in the middle of a set of choices and remove friction and sludge so that your desired choice will be the easy one for your target.
The truth is, every choice you make has the potential to affect the choices your customers and prospects make. When it comes to Choice Architecture, little details can have an oversized impact.