Thursday
February 3
2011

Grant Tudor

Less Sodium, More HIV Tests: Nudging Consumers Toward Smarter Choices

In 2007, a hospital in Zimbabwe made a small tweak to its HIV testing and counseling approach: rather than rely on patients to request (or opt-in) for a test, providers implemented testing as a routine process unless patients declined the service (or opted-out). The results were staggering: HIV testing and counseling increased by 300 percent during the first two weeks of the program.

Population Services International (PSI) has taken its success in Zimbabwe and integrated defaults across its programs. Now, when a patient walks into a male circumcision clinic, he’s defaulted into an HIV test with full disclosure and an opportunity to decline. Most, however, decide not to. When it comes to decision-making, we tend to resort to perceived standards.

Influencing consumer decision-making is not a new art. Slogans and jingles and 2-for-1 sales have financed more than a few second homes. But each generation, it seems, grows less and less affected by marketing’s old tricks. Using behavioral insights, however, to gently “nudge” consumers in a particular direction is delivering surprising results. (See the seminal book “Nudge” by Richard H. Thaler and Cass R. Sunstein.) How messages are framed, how choices are structured – these minor details are responsible for major outcomes.

The private sector has done a notably good job of nudging so far: think of opt-out magazine subscriptions after a free trail; default 401(k) plans by employers; even appropriating middle-school battle tactics (not “cool if you do” but “un-cool if you don’t”). So, can some insights into the psychology of decision-making be used to tackle pressing social problems? How can behavioral strategies be brought to bear on the challenges facing practitioners at the BoP?

Take the savings conundrum. More often than not, the perennial New Year’s Resolution doesn’t even make it to February. We want to save money. But we wanted that amazing jacket just a little bit more. One Philippine bank endeavored to close the intention-to-action gap. Because automatic payroll deductions rarely exist in lower-income markets, the bank created its own behavioral intervention called SEED (Save, Earn, Enjoy Deposits): clients keep a locked box of savings inside their home to which only the bank has the key. The clients set the terms of the contract such as deduction amounts and withdrawal dates (jacket-exception clauses prohibited), but rely on the bank to enforce them. Savings rates – with a focus on microentrepreneurs – have risen by 80 percent.

If we can nudge consumers to save more, can we also nudge them to eat better? Slapping numbers on packaging certainly hasn’t worked. (What’s 300mg of sodium mean, anyway?) So the UK Food Standard Agency is trying something new: traffic light labeling. A red circle means high in sodium, an orange circle means medium and a green one low. Consumers respond effortlessly to color – so why not use it to navigate point-of-sale decisions? Indeed, the psychology behind color is not a new science; marketers have long known that red increases your heart rate, creating a sense of urgency – hence the background color on clearance sale signs. Or that purple is soothing, and thus used regularly with beauty or anti-aging products. Do we think about simple navigation nudges when marketing products at the BoP?

Though perhaps no nudge is more elementary (and perhaps more revealing) than harnessing our impulse to follow the herd. The state of Montana employed “social norm” advertising to reign in drunk driving. It switched from ineffective fear-based messaging (“Don’t let Montana be your last best place,” with images of tombstones and car crashes) to a simple message of “Most of us don’t drink and drive.” For the first time, the state saw significant decreases in drunk driving following the campaign. From HIV/AIDS organizations to environmental activists, fear-based messaging has a long and fraught history; but humans usually respond more strongly to perceived social norms than to fear. Perhaps we have something to learn from Montana?

These examples should spark our imagination: how might practitioners use simple behavior change nudges to increase malaria bed-bet use in high-incidence regions? Or encourage adoption of solar-powered electricity in rural areas? Or increase school attendance rates? Can strategies like defaults, voluntary enforcements, navigation signals and social norm messaging be employed at the BoP? Of course, they’re no panacea. As behavioral economists Loewenstein and Ubel argue in The New York Times, creative food labeling won’t stop the onslaught of cheap fast food. But given some notable successes, we’d do well to explore the possibilities.

Categories
Uncategorized