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CONSUMER BEHAVIOUR

'Nudging' consumers is a common marketing tactic, but carries risk

By our African Marketing Confederation News Team | 2024

Study examines long-term impact of the method, which capitalises on psychology and prompts to encourage consumers to make a purchase.

Marketers have found ‘nudging’ to be an effective way to influence consumer behaviour. But new research suggests those who are prompted, either subtly or directly, to select a particular product or service may be quicker to abandon it. 

 

A recent study, published in the peer-reviewed Journal of Consumer Research, is among the first to consider the long-term impact of the widely utilised marketing tactic, which capitalises on psychology and carefully designed prompts to encourage people to make a particular purchase. 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 in Canada, says the research findings show nudging can have negative consequences for brands.

 

In particular, he points to subscription offerings, which are increasingly prominent across a range of products and services. 

 

“If you want someone to continue using whatever service you provide for a long period of time, it turns out that nudges backfire,” he says. 

Photo by Sora Shimazaki from Pexels

 

Maglio conducted two experiments to test three of the most popular nudging strategies to see how they affected long-term utilisation.  

 

In one experiment, researchers offered participants free membership to a website that provided a new ‘fun fact’ each day. In the control group, members were offered the choice between a Trivia Expert subscription plan or a Back-to-School membership option. 

 

Nudging strategy known as the ‘default effect’ 

 

Another group of participants were automatically opted-in to the Trivia Expert plan, but were given the option to switch, utilising a nudging strategy known as the ‘default effect’.  

 

In the final group, a third decoy option was added, titled Trivia Expert for Kids, which was designed to nudge the adult participants towards the Trivia Expert option. 

 

As with a previous experiment, all the options led to an identical product and both nudging strategies proved effective at influencing participants’ behaviour. But both had a negative impact on participant retention. 

 

“In the control condition, where they just chose between Trivia Expert and Back to School, they [logged in consistently] about 14 days in a row, and then they stopped,” Maglio says.  

 

“In both of the nudge conditions – default and decoy – they were only logged on for an average of eight days, so it’s a hefty drop-off after getting nudged [to the point of] losing interest in the subscription.” 

 

Despite the findings, Maglio suggests that nudging shouldn’t be abandoned as a marketing strategy, as its effectiveness in influencing buying decisions is well established.  

 

Instead, marketers think twice before leaning on such tactics “in situations where you care about longevity, or you want the customer to use your products for a long time”. 

 

You can find out more about the study here. 

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.