In behavioural sciences, Nudge theory promotes positive reinforcement and indirect suggestions as techniques to affect the behaviour and decision-making of groups or people.For instance, Placing chocolates near the billing counter in a supermarket is the simplest and most common nudge in practice. Inversely, Sludging is anything in a process, the term is often used interchangeably with nudging , that hinders users. For instance, a simple board of ‘do not waste food’ with photos of malnourished kids near the mess dustbin makes one think twice before wasting food. (Or) When there is an additional cost for plastic bags at stores, you’re less likely to purchase one, thereby reducing plastic consumption.
Nudge Marketing
Nudge marketing is the process of sending marketing communications that appeal to an individual's psychology in order to urge desired behaviour. In simple words, marketing in such a way, the customer makes the decision making process heuristic. A heuristic is a mental shortcut that helps people solve issues and make decisions more quickly. The rule-of-thumb tactics reduce decision-making time and enable people to perform without continually pausing to consider their next move. The most important aspect of nudge marketing is to ensure that the nudging remains unknown to the customers. Higher the incognito better the customer stimulus to the nudge. shhh!!!
Amazon.in, The most preferred online shopping website of India is a typical example how nudging looks simple but a more lucrative way of business augmentation. Amazon.in remembering your card details might not look like a big deal, but If you had to remember your card details after 12 while mindlessly scrolling through Amazon's virtual store, you may be a lot less likely to purchase whatever splurge items you added to your basket. This is called convenience nudging. Urgency nudge can be badges, pop-ups or notifications that urges customers to buy earlier. Limited time deal or Deal of the day offer is a simple nudge to push customers to buy by creating a mirage of the desirables going out of stock soon. Similarly, Specifying the number of stocks left is yet another method of urgency nudging. Amazon basics and amazon’s choice is a form of Reassurance nudging.
The most efficacious and way out in front nudging used by Amazon.in-Amazon prime services pushed from two ends. Customers who wanted amazon prime video were enticed with prime delivery benefits, while those who wanted prime video services were lured with prime video services, resulting in a large client base for one of the India's biggest OTTs .
How to begin Nudge marketing in a business
Have you ever wondered why Internet Explorer(to be retired in June 2022) is still in use when there are so many more advanced internet search engines? How often have you visited a restaurant and ordered the same food without even looking at the menu? How many times did you remove voluntary donation(Bookasmile!!!) while booking your online ticket from a ticket booking website? These are simple instances of the power of default in action. The power of default explains the tendency for an agent to generally accept the default option in a strategic interaction. Thus, whenever an offering is set in default likelihood of it being selected is high. At the same time, It is imperative to keep the default mode to require less effort and with more incremental benefits.
The primary step of any nudge marketing is to nudge this power of default. The task of nudging should be done so as to leverage the power of default by driving it to the most efficient and lucrative end of the business.For instance setting the price of medium sized popcorn close to large popcorn(The decoy effect), assuming the medium sized popcorn as most preferred default option, is a simple nudge on default power.
Nudge wisely
In modern businesses, nudging is used both for positive and negative outcomes. For instance under the Zerodha’s Nudge feature investors are warned when they're about to break basic trading rules such as trading in risky illiquid instruments and penny stocks. While at the same time many social media sites and OTTs nudge using unethical means just to increase the indulgence and screen time. In many countries, Nudging technique with the power of default have lead to increased organ donations. The same technique can be used to accomplish our personal goals independent of the size of the goal. Thus, Nudging is the future of advertisements and modern marketing and it is crucial to practice nudging in an ethical as well as lucrative form.
ABOUT THE WRITER
B J K RAJKUMAR
Pursuing PGDM at IMT-H
A constantly evolving person interested in Global politics and debating.
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