Using Behavioral Economics to Track Human Behavior

May 6, 2015
Contributor: Heather Pemberton Levy

Dan Ariely explores what really drives human behavior, and how we can get people to do what’s best for them.

Picture this: Your phone vibrates while driving. Do you weigh the consequences to your life or others of choosing to text while driving? Do your actions reflect your larger goals and considerations? No, suggested Dan Ariely, professor of psychology and behavioral economics at Duke University and author of Predictably Irrational and The (Honest) Truth About Dishonesty, in his keynote at the Gartner Digital Marketing Conference.

The “big things”, such as our objectives, goals, and aspirations, aren’t necessarily the real drivers of human behavior. Rather it’s the smaller moments and efforts in daily life that often dictate our actions. This is especially true online.

Effort Equals Choice

Mr. Ariely reviewed opt in and opt out forms for organ donation in his discussion of choice architecture to demonstrate that the bigger complex questions often befuddle people who consequently opt out of making any choice. When a form poses a tough question, they may simply choose not to answer it, thus leaving the design of the form to make the choice for them. Hence, a form that asks you to check whether to opt out of organ donation inspires the greatest number of donors. Afterwards, the donors may create elaborate stories to justify their choices.

Gartner Digital Marketing Conference

Dan Ariely discusses how marketers can influence behavioral change during the Gartner Digital Marketing Conference.

For marketers, it’s important to understand how consumers’ environments contributes to the decisions they make and design interfaces that guide people to specific types of choices. Take Express Scripts, the pharmaceutical benefits company. When it used traditional direct marketing messages such as a letter, postcard or brochure to switch customers to generic medication, the company had minimal uptake. It turned out that the issue wasn’t a negative view of generic medicine, people simply didn’t want to make the effort to switch medicine. When the company insisted that members return a letter to continue receiving their medicine, they were much more likely to choose the generic over the brand form.

“Small bumps on the road are actually very high,” Mr. Ariely said to describe why small moments of effort may impact what is in essence, a decision tied to a larger life condition or goal. “People are much more likely to do things that have less effort,” he said.

Put Actions into the Flow of Daily Life

If goals don’t drive our actions, how do marketers then design an environment to shepherd people to the right decision? Mr. Ariely described a colleague who breaks code down into specific steps in order to break or hack it, and he suggested that marketers can write down every step of a customer behavior or process and look to ways to help.

A credit card company, for example, tried a last attempt at payment before collection by asking people to describe exactly how and when they planned to make a payment. This increased results because when we put items into our daily life, we’re more likely to execute them. He also cited examples of prompting parents to put immunization appointments directly into their calendars to change behavior.

“If you put something on your calendar it becomes part of your daily plan,” he said. (Timely, a scheduling app co-founded by Mr. Ariely, recently sold to Google).

Effort Can Deter or Give Value

Effort doesn’t only prompt acquiescence it also deters certain behaviors. Cafeterias can place healthy foods in more convenient locations or make ice cream harder to reach. Mr. Ariely shared that when Google put a lid on the M&M bowls in its New York office the company reduced consumption by three million M&Ms in a month.

On the other hand, marketers can use effort to convey value. The online travel site, Kayak, displays how hard it’s working to find consumers the best travel deals, and they are more likely to wait when they see the effort, Mr. Ariely said.

“We think people evaluate the outcome of what we give them, but they evaluate the process,” he said. “When we work harder for people they evaluate what we’ve done for them to a higher degree.”

Often, online marketing doesn’t convey any effort. It’s a seamless process behind the scenes. This is an opportunity to slow things down to communicate your effort. Then, people will be more appreciative – of you, and perhaps your brand.

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