Business Bites: Nudge, nudge

Nick Walsh FBDO
ABDO head of corporate development MBA MCMI MIoL

Although you may not be aware of them, you are likely to be influenced by ‘nudges’ on an almost daily basis.

A common example is the use of your GPS navigation system in your car. The GPS suggests the best route for you to take based on a set of criteria such as shortest route or fastest route, but you as an individual have the option to ‘opt-out’ of those directions and take a route of your own. As with many nudges, there is an easy option, i.e. follow the directions given, or a less easy option: ignore them and risk being late or even getting lost.

In 2017, the Nobel Prize in economics was awarded to Richard H. Thaler for his contributions to behavioural economics through ‘nudge theory’.

Nudge theory gently influences decision-making through the uses of nudges in a particular direction. Nudges can include providing additional information to people making a choice, or showing examples of behaviour to others. Nudge theory is also known as ‘choice architecture’, a method of influencing behavioural changes.

Simply put, nudges aim to influence the choices we make, but without taking away the power to choose. The psychology behind the theory can be applied to any situation where you’re looking to enable change in people and shift behaviour. It’s therefore valuable when designing a learning intervention or a change programme.

An example of a large-scale nudge, which you will be familiar with, was the changes to workplace pensions schemes in the UK, where previously employees would have to opt-in to a scheme but now they have to opt-out instead. Many people understand the logic of putting money away for later in life, but believe it takes too much time and effort to set up a pension. This simple change of being opted-in automatically (but with the option to opt-out) saw the membership in such schemes increase from 47 to 79 per cent of UK employees between 2012 and 2021.

A more widely seen nudge in the UK was the introduction of the traffic light system on food packaging indicating how healthy, or not, the food may be in terms of fat content, sugar, calories, salt, which enables buyers to make an informed choice about the food but still gives them the option to ignore the information on the packaging.

So how can nudge theory help you in business?

Firstly, we must recall that a nudge is a method of influencing choices made without taking away the power to choose otherwise. You also need to take time to examine current behaviours before considering what your nudge may need to be.

You are most likely already using nudge theory in your practice, as the process of sending reminders to your patients is a nudge. They can choose to respond by booking an appointment with you (the most likely outcome), they can respond by booking an appointment elsewhere, or they can ignore the reminder completely. There is a perceived benefit to both the patient and the business for this use of nudges in the form of notifications and reminders.

What other nudges can you harness?

Display of trust and good service

Do you have a 5* Google rating? If yes, using this and making it more visible to patients and prospective patients can nudge by showing how others have benefitted from visiting your business and buying your services and products. Increasingly, consumers are looking for such ‘badges’ when they are seeking out providers for future purchases.

Up-sell

OK, let’s put this in optical terms rather than the concept of selling. Interactions with every patient should involve some form of lifestyle questionnaire that will help to establish what products will be of benefit to them, and help solve any issues that they are having. Patients are more likely to buy the product of upgrade when it is offered as a suggestion that has a perceived and understandable benefit to them. For example, if they state that the current spectacles are too heavy, a lightweight frame and thinner/lighter lenses will benefit. If they have very different requirements from their spectacles for home, work, driving, sports and hobbies, the offer of multiple pairs that can each solve a specific issue will be perceived as beneficial.

Remember, our nudge is transparent, clear, and obvious, not hiding costs/other options and patient choice is retained with consumer able to make the final decisions.

Product placement

The idea that if goods are presented in a different way, it can help ‘nudge’ people’s choice to the desired option. You’ve all seen the products displayed at the tills in a convenience store or supermarket – and may even have bought something in this manner. What does this look like in an optical practice?

The most obvious example would be to have a selection of cleaning cloths and sprays presented and explained at the collection of new frames. We should encourage the patient to obtain the correct products to keep their new purchases in the best condition This may also include offering a selection of ‘nicer’ cases for sale at collection too, as the patient may wish to upgrade in this manner for means of personalisation of the purchase.

I’m sure that you will think of many more useful situations for using a nudge, but don’t forget that the nudge needs to be transparent and obvious and allow people the option of ignoring the nudge. Happy nudging.

Further useful reading

Nudge: Improving Decisions About Health, Wealth, and Happiness (5 Mar. 2009) by Richard H. Thaler and Cass R Sunstein.