Last Updated on November 11, 2023 by Jan Barley
Is nudge theory making us donate more to charities? If so, is it ethical to use behavioural economics to encourage us to hand over our money?
Nudging is about applying behavioural science techniques to encourage consumers to take action. For instance, a simple example in “Nudging” studies shows that if you place healthy food options at a higher level in a cafeteria than unhealthy options, sales of healthy food increase.
The debate of whether nudging is ethical is like asking whether advertising campaigns manipulate consumers. The government-backed Behavioural Insights Team partnered with the Charities Aid Foundation to publish a paper on how behavioural science can help increase charitable donations.
Any business can apply the four insights from the paper to drive sales campaigns
- Make it easy
- Attract attention
- Focus on the social
- Timing matters
Make it Easy
Making it easy for the consumer is a fundamental rule in a purchasing environment. For example, adding a “checkout without registering” button can dramatically increase sales, as behavioural science shows consumers are annoyed when asked to register before buying. Conversely, many consumers register after purchase.
Personalised campaigns are more effective for engaging consumer interest. Rewarding behaviour is also an important element in making an impact. For charities, for instance, a like-for-like donation gives excellent results.
Focus on the Social
Social influence is a huge factor in changing behaviour. You have probably noticed pop-up messages on websites that say, “Joanne M of Manchester just purchased the Fleur-de-Roche silky moisturiser” or “Danny K of Blackburn just donated £100”.
Likewise, suppose you see a support message from Keanu Reeve of Richard Attenborough on the charity site. It adds to the social influence.
Good timing maximises the impact on the target audience’s decision-making when it’s easier for behavioural changes to occur. For instance, when an employee starts a new job is an excellent time to discuss pension contributions.
It’s human nature to procrastinate. We are bombarded daily with information and cannot cognitively absorb everything, so we filter information and put off decision-making.
Businesses must reduce the number of consumer decisions on the buying journey. For example, set a default “opt-out” button instead of an “opt-in” button for a product subscription. Ethically, you can remind the customer of their subscription after their purchase.
We can question whether it’s right to use behavioural science to increase charitable donations. The techniques are becoming more widely used as businesses realise the power of behavioural science. Is it any worse than yesteryear’s “foot in the door” sales techniques? I dislike pop-ups, upsells, and “in-your-face” messaging that some businesses still use to encourage sales.
With so many charities competing for money, I think clever marketing is a better use of their resources. Ultimately, applying behavioural science can result in what feels like a feel-good, win-win for the consumer and charity.
I am an SEO Coach and writer helping heart-led small business owners learn how to rank on Google.