Mar 15, 2019
This behavioral economics
podcast is another foundations episode where we discuss the E in
NUDGES: expect error. I think this might be my favorite of all the
types of nudges. This is really the reason we need nudges at all –
and why choice architecture even exists. Choice architecture takes
a lot of time, effort and strategy to do well and having a
background in nudging is essential to helping your customers and
employees make good choices.
If we humans did not make errors, we would not need help in
making decisions. We would be able to evaluate all the possible
options and make an informed decision every time. Because we don’t
and can’t…we need choice architecture. And it is all built on
expecting those errors to properly build in nudges. In this
episode, I talk about different types of errors with real life
examples and how to apply this information to your life and
- [05:02] If humans didn't make errors, then we wouldn't need
help making decisions.
- [05:16] We need choice architecture, because we don't evaluate
all of the possible options and make the most informed decision
- [05:36] When it comes to errors – we can expect humans to err
on nearly anything. No matter how brilliant someone is, they will
still make errors throughout their lives.
- [06:01] Quote from Nudge:
“Beethoven wrote his ninth symphony while he was deaf, yet he would
frequently misplace his house keys. How can people be
simultaneously so smart and so dumb?” This is what makes us
- [06:42] Errors come in many fashions – as I said it can be as
simple as forgetting your keys or leaving the card in the ATM.
These are actually part of a subcategory of error called
- [06:57] Postcompletion errors occur whenever we have a task to
do, and once it is partially done, we mentally check it off the to
- [08:41] The list of potential errors is truly endless.
- [08:59] The dinging noise your car makes when you don't have
your seat belt on is a nudge, because manufacturers expect you to
make an error at some point.
- [09:24] Check engine and filter lights are also nudges.
- [10:31] Try to incorporate all of the senses when creating a
- [10:52] Any time something is not consistent enough to become a
habit (check out episodes 21 and 22 if you need a refresher) it is
a prime candidate for error.
- [11:15] Consistency is key in business.
- [11:35] A good example of this is taking medicine every day at
a consistent time.
- [13:06] Subscription models are really useful when an error is
expected. They help the customer do what they are supposed to do,
and it gives the business a built in reason to follow up and stay
- [13:33] In the case of an air conditioning unit…it is important
to have the ducts cleaned on a regular maintenance schedule.
- [14:16] I would recommend regular check ins with their
customers – on more than just maintenance tips. That way, you can
check in more than just once every three years (which is longer
than you want to go if you want to remain top of mind).
- [15:24] People want heat when it is cold and AC when it is hot
(this is availability bias – episode 15).
- [15:33] Send an annual check in or reminder in the fall and
spring. The AC company could also create some type of certification
program to prove that the unit has received recommended
maintenance. This could help when selling a home and realtors could
also be partners.
- [16:42] You get all this benefit from a little strategic
foresight and understanding of when people will make errors, so you
can step in and be the solution.
- [16:56] In any company, there are bound to be tons of places
where people will make errors – both employees and customers. Dig
deeper and look for more opportunities to solve errors before they
- [18:28] Staff at the Ritz-Carlton have the ability to make
things right for customers without having to ask for
- [20:06] When you are trying to anticipate errors to nudge, you
should be looking all over the company – not just at customers, but
employee processes as well.
- [21:39] Busy or overwhelmed brain, which we talked about in
episode 32. This is where postcompletion error comes in.
- [22:21] Our conscious brain can only focus on so much and the
subconscious is making the vast majority of our decisions using
rules of thumb (as you know – this is the basis for behavioral
economics). When we get busy, we become overwhelmed and have more
errors than usual.
- [22:34] Things that aren't habits are easily forgotten, but
habits also get forgotten. Try to be present in the moment or nudge
your team or employees to remember.
- [23:19] Too many nudges can become one more thing to not pay
attention to. Try to get into the mindset of your customer or
- [24:10] Things like auto-pay and subscriptions can be helpful
- [24:51] Stop trying to change the behavioral errors and force
people into a system that doesn’t work. Instead look at what you
can be adding into the process to make it easier.
- [26:15] Changing the nozzles for different drugs and anesthesia
helped reduce common errors. Checklists in hospitals are also good
- [27:06] A busy brain and commonly repeated tasks are a breeding
ground for errors.
- [28:37] Any time you say someone “should” be able to do this or
“they know better” or if you have multitasking staffers…they are
prime candidates for nudges.
- [29:09] Products to solve a problem. Customers are willing to
pay for a solution to a problem that helps them avoid making an
- [32:59] Gmail has come up with
some clever nudges such as asking if you have an attachment if you
write the word “attachment” in the text of your message and there
is nothing attached, and putting ignored emails back at the top of
- [33:32] The next category involves understanding a hot state
and a cold state. When someone is in a cold state, it is easy to
say they will do something (or not do something) but then when they
are in their hot state…it is a lot harder to stick to the
- [34:10] Find things that can be done in a cold state to prevent
behaviors from happening in a hot state.
- [35:32] Programs like Save More Tomorrow have been used to
increase the amount someone will pay into to their retirement using
- [36:30] Staying top-of-mind and why consistency is key in
- [37:13] It's important to stay consistent with your business
and have regular touch points with your potential customers. Put
your customers in a drip campaign and send out your newsletter on a
regular basis so it becomes part of their routine.
- [38:12] Remember, people make
mistakes and it is your company’s job to find a way to make it
easier for them to use your product or service. You cannot expect
your customer to do that for you.
- [38:54] Follow your customers to see how they interact with the
- [39:59] Pourable laundry soap spouts are a result of
- [40:31] Look at your company or product for errors that take
place and ways to place a nudge as a reminder.
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