Mar 8, 2019
This week marks the halfway
point in our episodes on the types of NUDGES. We have already
covered incentives and understanding mapping. Today, is all about
defaults within choice architecture. When you think about choice
and defaults, you may think it only applies when there is a
preselected option on a list, but this is not the case. In every
choice there is always a default. In many cases, the default is to
do nothing…and that is still a choice, which is important for many
choice architects to remember.
I won’t be talking too much
about what a default is, but I will talk about how what I’m calling
“implied defaults” can be incredibly helpful when they are used
strategically. I’ll also talk about how customers appreciate them
and how they can benefit the company using them. In this behavioral
economics podcast, I also go over how defaults can apply to the air
conditioning example I have been using and how this concept can be
applied to your company or service and how it can even help you
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- [03:03] In every choice there
is always a default. In many cases, the default is to do
nothing…and that is still a choice, which is important for many
choice architects to remember.
- [03:32] When you are
constructing a choice for someone, it is important to remember what
their default is and how status quo bias will influence the
- [04:19] Air conditioning
example. The default is to do nothing.
- [05:09] The company should make
it easier for their customer to overcome this default
- [07:34] The unit size we need
is based on things that are already known…but they choose not to
mention any numbers at all until you are deep into the
- [07:43] This is a mistake
because first, there is no anchor. When there isn't an anchor the
anchor is zero. This is a terrible place to start.
- [08:12] Sticker shock is
created when people actually hear the cost.
- [09:24] When thinking about
defaults in choices, it is important to realize that each complete
choice can be broken down into a bunch of mini choices, and each
one has its own default.
- [09:58] When the choice is
presented, it can be properly worded to help nudge to a different
default than nothing.
- [10:50] The default when
quoting pricing for AC could and should be for the monthly payment
of a loan instead of the bulk cost.
- [12:05] I give an example of
where I move the default option in the offer from “not getting air
conditioning” (the true default) to getting AC on a 24 month loan
(the implied default). This is the power of framing.
- [13:09] How does a company
choose and understand what they should use as their
- [13:28] Understanding
incentives and how they impact the business is very important when
choosing a default.
- [16:55] Carrie Clarke of Next
Level Coaching does a great job framing with, “The ROI on coaching
is 700% and you will reach your goals 9 times faster than trying to
do it alone.”
- [18:28] Printing receipts is an
example where defaults can cost a business money.
- [19:52] The city of Tulsa,
Oklahoma reportedly switched all their printers to default to
double-sided printing, which they estimated saved them more than
$41,000 a year in unnecessary expense.
- [20:39] Our default as humans
is often to eat food in front of us and mindless eating can be a
problem. If the default plate is smaller, you will put less on the
plate and often realize you are full earlier.
- [21:51] Not defaulting to
adding straws and napkins to orders can reduce waste.
- [22:24] An Amazon subscription
example, which used a default.
- [26:01] Think about your
business. Do you have a product or service that people buy
- [26:38] An opt in versus opt
out can have a huge impact on choice.
- [28:05] Where do you have opt
ins versus opt outs in your business? Are there any features people
have to opt in for that would actually be best for them and
increase your profitability?
- [30:13] Think about what your
customers want and what will benefit them and what's going to
benefit the business before you set up that default.
- [31:03] GAP insurance is
usually an add on which is a hard sell. The advice I would give is
to bundle it with the initial quote and clients can opt out if they
- [33:46] Defaults are a powerful
and very simple nudge to apply. When used responsibly, defaults are
great and often appreciated by customers.
- [36:27] Implied defaults can be
incredibly helpful when they are used strategically. Customers
appreciate them and they can benefit the company using
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