Don’t misbehave. Prompt the real decision

Richard Thaler was in London this month discussing his new book Misbehaving. It chronicles the development of Behavioural Economics, how this challenged established rational models of economics and the growing practical application by governments globally. (Most notably the UK Behavioural Insights Team which Thaler has supported).

It was Thaler’s response to one of the final audience questions that was most interesting. He expressed some concern with the commercial world’s (long established) application of behavioural insight. This he illustrated with his refusal to enter credit card details to gain a trial subscription for a journal reviewing his book. He recognised that he, like many of us, would forget to cancel and ultimately end up paying for something he didn’t want.  That is, forgetting to cancel was not saying yes.

This concern is consistent with Thaler’s concern with ‘opt-out’ registration for organ donation. Opt-out may well drive the highest number of donor registrations as people accept the default choice.  But for those families facing the big decision of consenting to organ removal it is far from an emphatic agreement from their loved one.

Thaler’s preferred approach was originally labelled “mandated choice” and requires people to actively indicate their preference – for example, answering the question: “Do you wish to be an organ donor?” when renewing a driver’s licence.  Such an approach has been shown to achieve high levels of sign-up and, importantly, to avoid the emotional and legal problems of a ‘passive’ yes from the deceased.

thaler (2)

Behind ‘mandated choices’ is a principle of prompting (and facilitating) the ‘real’ decision / commitment. That is not prompting an action that avoids active consideration of choices or not taking a yes to a smaller commitment (e.g. free trial) to mean yes to a bigger one (e.g. paying for the service).

This principle I believe would be beneficial to brand owners tempted by the higher take up of ‘avoiding’ the real decision. These decisions may not be highly emotionally charged, but they can certainly cause frustration when the consequences are appreciated. My personal, example, is the free trial of Amazon Prime. This is something I am invariably offered as a I select my delivery option for Amazon purchases. Many customers will happily say yes to the opportunity of getting next day delivery at no extra cost, but I have consistently dismissed this fearing it will cost me considerably when I forget to cancel.

Framing Prime as a (small) free delivery upgrade decision it has led me to cynically view Amazon. More importantly I have not been prompted to consider the real, bigger choice of a Prime service with wider benefits such as video streaming. A service that I might be happy to buy!

prime

Embracing the principle of prompting the real choice will require some insight and creativity but does not appear particularly difficult. Consider the introduction of an email prompt at the end of a trial period that requires one click to activate paid subscription. Or putting a mandated choice in the credit card form offering the option of advance notification of first payment.

In Misbehaving Thaler provides a valuable reminder of the power of a a timely prompt. Text messages to sent to parents, reminding them of an imminent maths exam led to better results for children with parents who received the text. If a brand’s trial period provides an experience worth paying for a simple click to say yes should be confidently obtained and not be feared.

I am convinced there can be long-term benefits for companies embracing the principle of prompting the real choice for their products/services. But with short-terms gains looming larger than those later I recognise avoidance will remain tempting behaviour.

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