Richard Thaler’s 2008 book “Nudge” helped bring behavioural economics to the forefront of customer experience design and engagement. It also garnered a lot of criticism as it was felt the concepts “manipulated” customers and employees.
Putting aside that marketing is all about influence (the softer word for manipulation) and has been so since the dawn of marketing, there are two key principles that determine if a “nudge” (and behavioural economics and neuromarketing) are ethical or not.
Customers are not infuriated by opt-out’s. They are infuriated by opt-outs that are neither in their best interests, nor easily reversible. When considering the full narrative of Thaler’s work, ethical nudges require two things:
- They are in the best interest of the customer. And the best litmus test for this is, would you sell it to a loved one, with the same profile/ segment/ persona? It’s important to remember here, this about what the customer needs, not necessarily wants. For example, putting money aside every month for savings & retirement is a need, but difficult to suggest a want, when the immediate purchase of something that provides pleasure is forgone as the trade off. Let’s be honest, do I want to put money aside or go on that ski trip?
- They are easily, as in one- click, reversible within an extended (reasonable) time period, via channels the customer leverages. This is critical and demonstrates one of the key principles for a great cX, authenticity. If the organization is truly committed to the interests of the customer, then they should be performing actions for them, minimizing the draw on effort by the customer, but still allow for simple and easy opting- out.
“If you are suggesting people enroll in a pensions plan because you believe that they would do so if they had the knowledge and willpower to make a good choice- and if they can get out if with one mouse click- then, little harm done.” ~ Richard Thaler
Customers aren’t angry if given a great opt-out experience with these two principles in mind. It’s a lengthy and time consuming process that frustrates them, especially if for something that they do not need.
If we consider the issue of financial literacy, the predominant mindset is, “how do we better inform people of the need, and actions needed, to be more financially literate and stable?” However, a different mindset, could be “how could we undertake the activity a customer needs, for them?” Answer? Opt- out for savings plans, with a quick reversal process.
Imagine a credit facility automatically applying protection to a customer’s account (commercial or personal), to cover a pre- calculated trend towards over- draft. The customer is immediately notified and provided one click options: (i) opt- out immediately, (ii) keep for needed time period (or customer- defined period), (iii) keep facility/ product in place indefinitely. Imagine if your bank provided those three options with one click acceptance, and a message saying we are doing this as it’s in your interest to avoid charges, but we understand you might not want it. No problem! Click here to decide.
“… U.S. survey data suggest 9 out of 10 workers who have experienced the pension opt- out, support the changes… and even among the small minority who do opt- out, more than 70% of them still think the opt-out is preferable to an opt- in arrangement.”
So by all means, opt-out away! Just do it for the right reasons. Yup, the reasons are still reciprocity and authenticity.
Funny, we keep coming back to that don’t we?
Maybe we should all opt- in to lead everything around customers & employees with this in mind.