'Nudging' consumers is a common marketing strategy, but it comes with risks, study finds

Marketers have discovered that so-called “nudges” are an effective way to influence consumer behavior, but new research shows that so-called “nudges” can be used to subtly or directly encourage the choice of a particular product or service. This suggests that those who have been given a choice may be more likely to abandon their choice sooner.

In recent research, consumer research journalwas one of the first companies to consider the long-term impact of a widely used marketing tactic that uses psychology and carefully designed prompts to persuade people to make specific purchases. Examples include limited-time offers or presenting people with a “compromise” option between two extremes.

Study co-author Sam Maglio, a professor of marketing and psychology at the University of Toronto Scarborough and Rotman School of Management, said the findings highlight that nudges can have negative consequences for brands. It has said.

In particular, he points to subscription services that are becoming more prominent across a wide range of product and service categories.

“Even if you want someone to keep updating the service you provide or keep using it for a long time, we found that forcing someone to do so can be counterproductive,'' he says.

Maglio conducted two experiments testing three of the most popular nudge strategies to see how they impact long-term usage.

In his first experiment, he provided free air plants to students and faculty. Within the control group, participants were presented with a choice between a plant that required less maintenance and was said to be of lower quality, and a plant that required more maintenance and was said to be of higher quality. For the nudged group, he suggested his third “middle” option, which was average in both maintenance and quality.

In reality, all plants were identical.

“Research shows that when people consider three options that include one extreme and the other, they gravitate toward a compromise option in the middle,” Maglio says. This form of nudge is called the “compromise effect,” and it proved effective in this experiment.

Instead of getting a free plant, participants received an email every two weeks asking if they still had the plant. After his first 10 weeks, there was little difference in the likelihood of caring for plants between the group that had been cleverly persuaded with the “compromise” option and the control group, Maglio says.

”[But] After about 3 months, you will start to see the following percentages: [retention] “Those who chose the middle option when being nudged were more likely to start saying things like, 'Oh, I let them die,' or 'Oh, I threw them away.'”

“We ended up checking in for a total of nine months, and the longer we waited, the wider the gap between the two groups became.”

At the end of the experiment, the researchers found that the choice-induced group discarded plants 16% faster than the control group.

In the second experiment, researchers offered participants a free membership to a website that offered new “fun facts” every day. In the control group, members were offered a choice between a “Trivia Expert” subscription plan or a “Back to School” membership option.

Another group of participants were automatically opted into the “Trivia Expert” plan, but were given the option to switch using a nudge strategy known as the “default effect.” The last group added his third “Decoy” option, titled “Children's Trivia Expert.” This is designed to direct adult participants to the “Trivia Expert” option.

Similar to the previous experiment, all options resulted in identical products, both nudge strategies proved effective in influencing participant behavior, and both had negative effects on participant retention. It affected me.

“In the control condition, where they simply had to choose between 'trivia expert' and 'back to school,' they [logged in consistently] “In both the default and decoy nudge conditions, they were only logged in for an average of eight days, so the attrition after receiving the nudge is large,” Maglio says. As long as you lose interest in your subscription. ”

However, despite the findings, Maglio suggests that nudges should not be abandoned as a marketing strategy, as their effectiveness in influencing purchasing decisions is well established. In fact, he suggests that marketers should think twice before resorting to such tactics “if they care about the longevity of their products or want their customers to use their products for a long time.”

Maglio added that there is little data on the long-term effects of nudges, which can have a significant impact on brand loyalty and consumer trust.

“We need to be more specific about which types of nudges are counterproductive, which types are ineffective, and which tactics are win-win for customers and brands,” he said. “After decades of fine-tuning, we've just started two experiments, so we still have a long way to go.”