Hi, I’m Astrid and I’m an organisational psychologist. In psychology, we study human behaviour extensively. In this series, I’m going spill the beans on some of the psychological secrets behind our behaviour. Please use it for good…
When you compare the percentage of people consenting to donate their organs in Austria, Belgium and France, with Denmark, Germany and the UK, the difference is enormous. In the first three aforementioned countries, the percentage is higher than 90%, in the latter three, it’s less than 20%. Does that mean that people in Belgium are a lot more progressive than people in Denmark? Is the mistrust in the medical field greater in France than it is in the UK? Absolutely not.
The difference is primarily driven by the way in which the choice has been presented to people. In the first group of countries, the default donation option is to donate; if you aren’t a donor, it is because you opted out. In the latter group, the default is not to donate, if you are a donor, it is because you opted in.
This example is a great example of choice architecture. The way choices are presented to us has a significant influence on the choices we make (or don’t make!). Behavioural economists have been having lots of fun with this notion. Do you ever wonder why, when choosing a product, you are often presented with three options (and not two?). Then consider this: In one experiment which took place at the cinema, people could choose between a $3 small popcorn and a $7 large popcorn. The significant majority of the people chose the $3 popcorn.
However, when a $6.50 medium popcorn was added to the mix, the majority of people chose the $7 popcorn! Suddenly the value for money of the $7 popcorn seemed more attractive – and more attractive enough to change behaviour. In the experiment, for only 50c more than the price of a medium, customers got a large – it was exactly the same small and large option, but a very different behavioural outcome. We call this the decoy effect.
We make choices in the context of the way in which the options are presented to us. Choice architecture is about organizing that context to drive our decisions. So when it comes to setting metrics for your Test & Learn or Lean Start-up experiments (or indeed for when you develop your product communications and value propositions to customers), it is critically important that you consider the choices which are being offered to customers. Make no mistake, the ways in which options are presented to customers will have an effect on your results (and should be explored!).
If you would like to speak with me about how you might use choice architecture in your next Lean Start-up experiment or new product development project, I’d love to hear from you: astrid@orangesquid.com.au