Mar 29, 2019
This is the end of our series on
nudges and choice architecture – we started with an introduction to
the concept in episode 35 and have worked our way through all the
aspects of the NUDGES acronym: incentives, understanding mapping,
defaults, giving feedback, expecting error and now wrapping it up
with structuring complex choices. Be sure and download your free
worksheets on all of the aspects of nudges by becoming a
In this behavioral economics
podcast, I talk about structuring complex choices. I also revisit
mapping and the five steps to understanding mapping, because it is
the foundation of complex choices. This episode is also our final
application of the air conditioning example. I also dig into
several other examples to illustrate this concept and how it all
ties into ways to make your business better.
- [02:41] Mapping is the
foundation for complex choices. Thaler and Sunstein describe a
mapping as “the relation between choice and welfare” and use a
simple example of choosing a flavor of ice cream.
- [03:16] Some tasks like
choosing an ice cream flavor are easy. Others are more difficult.
The path from the choice to the outcome is called a
- [04:25] The task of the choice
architect (that’s you) is to set up a system that helps make the
map as clear and easy to use as possible.
- [04:37] The five
steps I created and identified in understanding mapping were: 1)
encourage thoughtful review and open-mindedness, 2) break it down,
3) make it relatable, 4) help them get there and 5) call to
- [05:12] When you get into a
more complex choice, there is a need for filtering and removing
- [07:12] The compensatory
strategy works for easier choices or choices with less options, but
not with more complex choices. Instead, you need what is called
elimination by aspects.
- [07:32] By choosing a few
aspects that matter, you use those to narrow the field.
- [08:47] When you eliminate
everything over a certain arbitrary line, you could miss something
that is just outside the parameters. This is the risk we take with
elimination by aspects and the constant battle of complex
- [09:25] The internet has given
us tons of resources to help simplify our complex
- [09:57] A presort can help us
when looking at a menu. This way we can eliminate the options that
we don't care about.
- [11:20] When people are
presented with too many options they don't buy. We get overwhelmed
with too many choices.
- [14:16] We only see a lot of
choices as a benefit when they are properly handled such as going
to a toast restaurant with all of the spreads and toppings
- [14:52] Cold Stone Creamery
uses a form of anchoring and adjustment to help with their complex
- [15:41] Showing how aspects can
come together can help people make a more complex choice. It can
help them eliminate things they know they don’t want when they are
properly categorized. When looking at your own business, it is
important to recognize if you have an inherently complex choice or
if you are needlessly creating a complex choice.
- [15:50] The final air
conditioning example. Complex choices can be made unnecessarily
complex. Our AC choice became more complex because we needed to
upgrade the heater.
- [18:34] It's important to
present the options in a way that doesn't talk you or your customer
out of business.
- [19:06] Don't be afraid of
silence with complex choices, because people need time to
- [19:25] Using behavioral
economics in business is much more than messaging, branding, sales,
or any single aspect. To incorporate it properly, it's important to
know all of the concepts and how they work together.
- [21:40] A paint color example
where using swatches makes the color choice much easier than names
- [23:50] A fun exercise where I
give names of companies and how their methods could be applied to
- [24:03] This technique will
help you shake things up and get out of your comfort
- [25:09] An example using The
- [25:48] Try to look at the
cursory decision and ask if you are trying to solve the problem in
the right way.
- [26:00] Companies that do a
great job structuring complex choices.
- [30:17] Remember to think about
ways you can reduce complexity as well as how you might add
complexity to your business.
- [30:41] Seven episodes felt
like a TON to put into a series, so thank you for those of you who
have tuned in for the whole thing - and for letting me know how
much you enjoyed it.
- [31:08] All businesses are
based on choice. It's your job to structure those choices in the
best way possible, using a map so the customers know what is in
their best interest, aligning the incentives to set up a default –
and give feedback along the way for all those errors you expect
people to make.
Thanks for listening. Don’t
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