What are Behavioral Nudges and Why do They Matter?
Behavioral Nudges are messages that leverage psychological principles to reduce choice overload and drive purchase behavior. Choice overload occurs when there are too many options a person must choose from, resulting in stress or frustration.
Behavioral Nudges are derived from psychological theories that explain how people make decisions. According to behavioral economist Daniel Kahneman, there are two systems in the brain responsible for decision-making:
- System 1: The unconscious, reflexive, and quick decision-making side of the brain. This side of the brain relies on cognitive biases, habits, and psychological nuances, which means these decisions are often irrational.
- System 2: Reflective, deliberate, rational. This is the problem-solving side of the brain.
Behavioral nudges seek to appeal to System 1 way of thinking, in order to help shoppers make quicker, more well-informed decisions
Behavioral nudges, appealing to System 1, provide digestible information that is easy to see. This prompts shoppers efficiently through their buying journeys. Leveraging System 1 can thus be combined with a prompt to nudge or influence behavior.
Using Fogg’s Behavior Model to Optimize Behavioral Nudges
With that in mind, Crobox’s technology is derived from the theory behind the Fogg Behavior Model (FBM). We use this model to ensure our Dynamic Messages are the most effective at driving behavior.
In order to ensure the prompt-success of your nudges (in this case, your Dynamic Messages), you should understand your customers’ motivation, and give them the ability to carry behavior out in the most accessible, seamless way.
Our behavioral nudges aim to increase motivation and ability while offering a prompt. For example, if there’s a behavioral nudge on the PLP, this is shown as a Dynamic Badge. The badge draws attention to a specific product, which increases ability by bringing more visibility to the product. The message copy will increase motivation because it will be grounded in a behavioral principle. While the copy acts as the motivator, the badge itself acts as the prompt, giving the shopper the nudge they need to learn more about the product by clicking on it.
In short, behavioral nudges fall within the graph’s optimal prompt point, meaning they are prompts that draw attention and increase the motivation to choose.
Behavioral Nudges with Crobox
At Crobox, Behavioral Nudges leverage various behavioral principles such as the Endowment Effect, Social Proof, Scarcity, and more, part of some of the key behavioral principles that we translate into the retail world and leverage in our Dynamic Badges.
So why do they matter?
Behavioral nudges facilitate decision-making because they tap into the System 1 way of thinking. In doing so, they streamline your shopper’s buyer behavior and eliminate hesitation. They also present more information about a product in an easy and digestible way that will most likely get your shoppers clicking from the PDP to PLP and often towards checkout or add-to-cart.
Moreover, behavioral principles are key to understanding your shoppers’ psychographics, and can eventually be used for psychographic segmentation.
Psychographics are the psychological makeup of your customers. Understanding which Behavioral Nudges drive your customers to click on products will help you create psychological profiles about who your customers are and (most importantly) why they buy.
In short, Behavioral Nudges generate information about your shoppers’ motivators.
Some things to keep in mind:
- Crobox’s Behavioral Nudges are not present on every product on a product listing page. Generally, these badges only show on 10%-20% of products to ensure their effectiveness.
- Behavioral Nudges are not related to the physical attributes of a product, but the product’s psychological attributes.
Behavioral Nudges shouldn’t be intrusive. They should aim to reduce choice overload. They should be absolutely customer-centric; meaning your copy should draw from psychological theory and cognitive biases. And they should be truthful (a “Popular” badge will only be applicable to the ten most viewed products in the last two weeks).
In the end, Behavioral Nudges matter because:
- They streamline the customer’s journey
- Give more information about what’s special about a product/s in a digestible way
- Draw attention to certain products
- Generate psychographic data that can be used to construct psychological profiles and for psychographic segmentation
- Personalize the customer journey based on what messaging appeals to which customers