It’s been used for encouraging men to pee straight and triggering purchases of toothpaste. Nudging is almost like a Jedi mind trick that can be used to drive sales and conversions. I spoke to agency coach, Tommy Lindström, about nudging. Tommy shared this advice on how agencies and freelancers can take advantage of this oft-misunderstood technique.
When I call Tommy up for a chat about nudging and how it relates to marketing agency services, it’s clear that nudging isn’t some bandwagon he just jumped on. Tommy’s interest in human behavior has a long history and is rooted in a fascination with, and a passion for, what makes people act the way they do.
The path to his current role wasn’t straight but no less inspirational. Over his career so far, Tommy has had roles as agency CEO, sales manager, and marketing consultant. He’s also coached over 200 agencies to improve their sales culture and business strategies, under the brand BOOM. His specialty is behavioral design in sales, marketing and, business development. But Tommy isn’t one to keep knowledge to himself. His commitment to sharing his expertise goes way back, and he’s the founder of the Profitable Behavior Design Networks at the Stockholm Chamber of Commerce and the Stockholm Marketing Association.
Hello Tommy and thanks for taking your time talking to us. Can you tell me a bit about yourself and the work that you do?
“I work with behavior design which we apply in sales, HR, and business strategies,” Tommy says. He credits his studies at the Copenhagen School of Business and the inspiration of Professor Hugh Willmott for his initial interest in human behavior.
“He was my advisor and suggested I read a book about sociology. I was hooked and started understanding why we act the way we do,” Tommy says. He didn’t pursue sociology and majored in economics instead. However, it became clear to him as he took on roles as agency CEO, marketing director to sales manager, as well as working in the United Kingdom and the Netherlands, that it’s all about human behavior.
“An ingenious business strategy isn’t worth more than an old new year’s resolution unless someone commits themselves to realizing it,” says Tommy.
So what is nudging? Can you give examples?
“Nudging is a part of behavioral design,” says Tommy. He likens it to a “small push in the right direction” thereby influencing their choice. One example is having a default option selected or checked in a form or an application, and the user given a choice to change it. Most users will use the default setting even though they have no idea what consequences it has.
“For something to be seen as a nudge, it has to be cheap and easy to avoid. It cannot be a requirement or mandatory. That’s a different kind of behavioral control,” Tommy says.
Nudging is at odds with the age-old belief that humans make fully rational decisions based on objective criteria. Having feelings is necessary to feel motivated and you post-rationalize your choices to make them fit your life philosophy and narrative, Tommy says. He adds: “A completely rational being lacks emotions. However, it’s emotions that drive us to act.”
Tommy says that nudging and related behavioral mechanisms have become especially interesting now that we can study the brain directly thanks to fMRI (functional magnetic resonance imaging). “We can now see the there are an Ethos, Pathos, and Logos,” he says, referring to Aristotle’s modes of persuasion used by speechwriters since age eternal.
One example Tommy mentions is how someone isn’t likely to buy a “trip to heaven” if their life is pretty good. This is due to what Tommy calls status quo or inertia which causes one not to react until the current situation is absolutely awful. Tommy’s advice to those selling services is to open their prospects’ and leads’ eyes to shortcomings in their businesses and to help build that feeling of things being quite severe.
We returned to the topic of using nudging in sales and marketing later on in the interview. Tommy shared some fantastic advice. Read on to find out!
How did your interest in nudging start?
“Nudging is trending now. But for me, it’s not about understanding different nudge techniques to control people’s behavior. To me, nudging is about understanding what it is in our psyche that makes us react the way we do in response to nudges and other methods used for controlling and influencing our behavior.”
“Nudging isn’t new,” Tommy says. It’s been around for a long time and employed by skillful designers, engineers, salespeople, and marketers but without reflecting much on it. He gives examples such as the center line on roads to prevent veering into the opposite lane, or small dishes in restaurant buffets encouraging smaller servings.
An example of a famous nudge is what the Schiphol Airport in Amsterdam did in the men’s bathroom stalls to prevent spilling. The nudge-inspired designers drew flies on the urinals to encourage the customers to pee in the center.
However, it’s only in the past decade that we’ve had access to the tools to truly understand why nudges work, thanks to imaging and scanning equipment like fMRI. Insights gained this way has led to research into the area and the publication of many new books. The term “nudging” has been popularized by books such as Nudge by Thaler and Sunstein and Thinking Fast and Slow by Kahneman (see the sidebar).
Tommy says there are multiple heuristics and biases that influence our behavior. They’re mental models that help us make simple decisions faster (“gut feeling”). He lists some common ones:
Loss aversion – Refers to people’s tendency to prefer avoiding losses to acquiring equivalent gains: it’s better not to lose $5 than to find $5. This is also the implication of risk aversion. Some studies have suggested that losses are twice as powerful, psychologically, as gains. You can use this principle in sales situations, which we’ll get back further on in this post.’
Anchoring – The “anchoring effect” names our tendency to be influenced by irrelevant numbers. When presented with higher/lower numbers, experimental subjects gave higher/lower responses. This is used in pricing to shift a buyer’s idea of what a good price is. In our post on value-based pricing, we used it in the tiered pricing example to “anchor” the higher price for the gold tier to make the medium “silver” option seem reasonable. Check out the in-depth guide to tiered pricing for even more examples of using anchoring.
Availability – This heuristic is a mental shortcut that occurs when people make judgments about the probability of events by how easy it is to come up with examples (Wikipedia). This is often used to create artificial scarcity of non-physical goods. You might have seen how some consultants who offer training through the web limit the number of virtual seats they sell just to inflate demand.
Optimism – Optimism bias (also known as unrealistic or comparative optimism) is a cognitive bias that causes a person to believe that they are at a lesser risk of experiencing an adverse event compared to others. Tommy gave the example of people about to be married rating their risk of divorce to zero or close to zero. They maintain it even when being told and shown evidence that 50% of marriages end in divorce.
Sunk-cost – Rather than consider the odds that an incremental investment would produce a positive return, people tend to “throw good money after bad” and continue investing in projects with poor prospects that have already consumed significant resources (Wikipedia). It’s easier to spend money than to revise your view and accept that you made a bad call earlier.
Effort – An object’s quality or worth is determined by the perceived amount of effort that went into producing that object. We used this principle when we designed a tiered offer in the value-pricing post. By describing items in detail, they seem more valuable than if we just wrote 2-3 words about them. A “hand-crafted” app will sell for a higher price than just an “app.” Make sure to read our guide to tiered pricing for more examples of using effort.
Fluency – Something that is processed or experienced more fluently, faster, or more smoothly than another, has the higher value. Or put differently, the more skillfully or elegantly an idea is communicated, whether or not it is logical, the more valuable it is. As I explained in the value-based pricing post, how you provide something is more important than what you actually provide. A sales experience that the customer perceives as professional, smooth and confident will boost their perception of the value they’re getting. A strong and visually appealing presentation will help you charge more, as we explain in the guide to tiered pricing.
Framing – Framing is the context in which choices are presented. By framing choices, you can influence the decision made. Framing can, for example, be used effectively with anchoring to influence a buyer’s idea of the average price.
Naïve diversification – When asked to make several choices at once, people tend to diversify more than when making the same type of decision sequentially. Tommy likens this to the adage of not putting all eggs in the same basket.
Peak-end rule – People tend to judge an experience based mainly on how they felt at its peak (i.e., its most intense point) and its end, rather than based on the total sum or average of every moment. Recall the saying: “They won’t remember what you said or did but how you made them feel.”
Recognition – If one of two objects is recognized and the other is not, then infer that the recognized object has the higher value with respect to the criterion (Wikipedia). People will value what is familiar over what is unknown. You can use this to your advantage by referencing things you know someone likes or know, by making comparisons for example.
What companies do nudging best? What are your favorite cases of nudging?
“Nudging works best if several of the heuristics and biases [listed above] are being used in sequence, reinforcing one another, during the buying journey or the use of the product,” says Tommy.
Tommy refers to Spotify’s Discover Weekly feature as a particularly smart use of nudges. The Discover Weekly feature consists of a playlist of songs picked for the user based on their previous plays and likes. It’s a convenient way to discover new artists that are similar to the ones you like.
Discover Weekly uses several nudges, according to Tommy:
- It’s a gift, making the customer feel indebted. It’s the same technique used by car salesmen offering prospective customers coffee or offering to try the car over the weekend, having to return it on Monday. This also triggers loss aversion.
- It emphasizes positivity and is a weekly surprise which makes it an extra attractive gift.
- It’s personalized which makes it particularly attractive.
- It arrives on a regular basis, having the potential to reinforce addictive behavior. A Spotify user could conceivably postpone or cancel plans to cancel their subscription for fear of missing out on future Discover Weeklies.
- It’s provided by Spotify, which is an authority, boosting the playlist’s credibility and trustworthiness.
- It’s limited in time, showing the number of days you have left to listen before the playlist is gone forever.
What advice would you give to a reader that wanted to start applying nudging to market themselves or their agency?
For companies and agencies considering using nudges, Tommy encourages them to think about the entire buying journey. Look for example at how your existing clients found their way to you. Then consider points where nudges can be employed to reinforce the behavior the agency would like to see. Make sure to understand what makes your clients tick. “Is their prime objective to find an agency that will propel their carrier through international awards or are they looking for driving sales?”, he says.
One common mistake among agencies is to start by pitching a brilliant solution. Then they miss the more powerful motivator of loss aversion. The best way to take advantage of loss aversion, Tommy says, is to look at the challenges the prospect is facing in their business. At this point, Tommy advises agencies against painting grand alluring visions of what their services can do for the prospect. “It’s always important to start where it hurts, addressing a painful business problem, to effectively appeal to loss aversion,” he says.
He gives an example of an agency pitching a company their ability to introduce their products on the French market. Instead of pointing at the possibilities, it’s better to focus on how much potential revenues they miss every year, by doing nothing, Tommy advises.
Tommy says it’s not uncommon and that prospects don’t know the actual problem themselves and your detective work is immensely valuable to the customer. “It’s when you dig into these problems you truly understand their business and what they need help with,” says Tommy. According to him, this is necessary for any collaboration between client and agency to work.
Nudging seems like a bit of a gray area ethically speaking and can be seen by some as manipulation. What are your thoughts on that?
“We humans spend a lot of time on making others do as we want — children, spouses, colleagues, friends and the rest of the world. To our aid, we use intuitive methods such as emotional and logical reasons. Form alliances. Being verbal. Choose the right timing. Give to take. Nag. Ask. Emotional blackmail. And many use nudging without even thinking of it. Nudging isn’t more manipulative than any other method used to get other people to do as you like. To me, it’s important to be truthful and not, for example, present an event as almost sold-out, if it isn’t. Just to attract more people,” says Tommy.
What ways can you picture using nudging in your business?
Post a comment below. I read all the comments.
Want to Learn More About Behavior Design and Nudging?
- Subscribe to our newsletter to make sure you won’t miss any future posts. We will revisit this topic again soon and discuss how you can use customer insight methods and behavior design to improve your own sales and marketing work.
- Check out our extensive guide to tiered pricing for more examples of nudging in practice.
- Tommy writes regularly on behavior design and nudging (in Swedish) at Byråbloggen.
- Check out the books in the sidebar. These are Tommy’s and my recommendations and discuss many of the principles mentioned in depth.
- If you’re in Stockholm, Sweden, check out the BOOM website for their upcoming free seminars on nudging.
- BC Gov Photos Province launches MRI strategy, funds increased number of scans via photopin (license)
- Tommy Lindström (by Peter Knutson)
- Photo by Eugene Dorosh from Pexels https://www.pexels.com/photo/photo-of-eiffel-tower-739407/