StudioGerART | Behavior change
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NudgeLab for RSM – how to structure your proposal?

The idea of NudgeLab is to drive behavior change. To do that, you need to know what the current behavior is and how you would like to change it. The proposal helps us understand how to do that and how you’re going to measure your success while doing so. Please find a guideline to structure your proposal in five steps.

1 Identify the trend

I have coached many students in the past couple of years and one of the things I have noticed is that you want to have a positive impact on society and nudge people to behave responsibly: help people become healthier to fight obesity, exercise more, eat less meat and more fruits and vegetables. Or you want to the world to become more sustainable by use renewable energy, produce less waste, reuse products, buy garment that is not manufactured using child labor, and so on. I think that’s adorable and applaudable. That’s why I want to give you NudgeLab as a platform to learn how to drive responsible behavior.

First, I want you to take a step back and identify a trend relevant to you, to society or business, and that you want to impact with a desired behavioral change. What is the mark you want to leave?

Of course, it is not mandatory to drive responsible behavior; you’re free to drive any kind of behavior. If you want to drive consumers to pay in cash instead of using cards or other electronic means to avoid the finance industry or tax authorities to track them, be my guest. Although, I will look at the ethical and moral side of your desired behavioral change. I won’t allow you to try and get people to smoke, kill, abuse, sign up for violent groups fighting for causes good or bad, or display racism or illegal or sexually inappropriate behavior.

2 Make it small

Second, I suggest that you identify one behavior in the trend that you want to impact. This is to have a balance between being relevant (for yourself, society and the timeframe of a Master thesis) and preventing you from boiling the ocean (trying to attain a goal that is unattainable by its sheer size). Examples are:

  • Fighting obesity -> reducing sugar consumption -> drink less soft drink (e.g., Coke) -> replace by water (not by fruit juices because it is at least equally bad)
  • Fighting obesity -> fighting snacking -> eat fewer crisps with saturated fats -> consume alternatives such as fruits or vegetables
  • Fighting obesity -> exercise more -> encouraging easy exercises, e.g., walking, taking stairs
  • Stop child labor -> create demand for products labelled “produced without child labor”
  • Halt global warming -> reduce greenhouse gasses -> reducing meat consumption -> address concerns about protein intake -> create awareness of non-meat alternatives e.g., beans
  • Halt global warming -> reduce greenhouse gasses -> encourage the use of public transportation instead of cars

You see that the goal setting of behavioral change ranges from generic (society level) to specific (individual behaviors that we may be able to influence).

3 Define the target group and situation that you want to impact

In the previous part you have defined the intended behavioral change. In this part you’re going to add more detail to it, by answering at least the following two questions:

  1. Who? Who is the specific target group of the behavioral change? For example, if you’re addressing nutritional habits to fight the global pandemic of obesity, you can address many target groups, e.g., people who are already obese and struggle with their diet, with compliance, with developing healthy nutritional habits, but you can also be preventative and address people who are not yet obese, but a risk groups, or not even a risk group but parents of young children exposed to sweets and candy.
  2. Where? Where is the environment that the current and desired behavior displayed? For example, do you want to impact consumer behavior at point of sale in store? Have them visit different stores, aisles, shelves? Do you want to change behavior at home; grazing, stocking, moments of eating or snacking? Do you want to impact online behavior, behavior of kids at school, and so on?

The nudges that you’ll design, may vary depending on the target group, situation or environment.

4 Understand current behavior

Fourth, I want you to understand the reasons for the current consumer’s behavior from a theoretical point of view. This does involve an initial overview of “consumer theory”.

For example, if you want to fight obesity by encouraging healthier nutritional habits, you’ll have to understand a few things first: why do consumers eat what they eat today, is it mere ignorance and habit and complacency that they eat other things; established rituals, heuristics, habits and practices, or is it a barrier towards eating healthier behavior (“I don’t like the taste and texture of fruits and vegetables”). The two situations may result in very different nudge designs.

In fact, eventually your thesis will include two (intertwined) overviews of theory:

  1. One which helps us understand the reasons for current behavior. You will start to address this in your proposal and refine it in the thesis itself.
  2. Another which helps us understand how we may change this behavior towards the desired behavior. You will only address this in the thesis, not in the proposal.

I believe those two are different yet interrelated and we can’t do the second without the first.

5 Set the ambition

The last step in the proposal is to define what does success look like? If you expect the entire population of meat eaters become vegan because of your nudge strategy, you’ll probably be disappointed. When are you happy? How many converts would you call a success? This will, in the final proposal and the thesis, inform the KPI (Key Performance Indicator) and it will help you do the driver’s analysis (the mandatory regression analysis part to see what has driven success). Express the ambition in SMART terms: specific, measurable, attainable, relevant and time bound (alternative definitions can apply). The attainability also applies to the timeframe of the thesis project.

After the proposal

Many of you may have been under the impression that you need to identify your nudges in the proposal, or that you must read extensive theory and write about that. Wrong! I don’t expect nudges, nudge programs or theory in the proposal; that will come after approval of the proposal and in the thesis. I want the proposal to set a clear problem statement and SMART objectives. I encourage you to read a lot yet primarily to be inspired for a clear and relevant problem statement.

 

How to encourage reading diversity?

By Gerard Loosschilder and Lára Hilmarsdóttir

We love book stores

We love bookstores because they drive reading diversity. Inviting shelves near the entrance with the top-10 bestselling items. Tables with new titles and authors mixed with old genres; stickers calling out “staff’s pick” helping us to decide what to pick up next; fellow patrons silently browsing or offering their unsolicited advice. They all help readers expand their horizons. That’s why Lára worked in a bookstore for years where she was a beacon to visitors handing out reading suggestions. That’s why Gerard can’t stop himself from coming out of bookstores with yet another pile.

Who would have thought that ways to drive reading diversity can also be a way to limit it? Gaffeo, Scorcu, and Vici studied the Italian book market in 2008 and they found that a few books become best­sellers at the expense of many other books selling poorly. There is a trend towards herd behavior making people read what others are reading. As a result, the winner takes all and success breeds success.

Lára witnessed this trend first-hand, of the book market converging to ever fewer genres and titles. We believe that it makes readers poorer, robbed of all kinds of artistic and cultural treasures. They are unlikely to experience the same variety of characters and story-telling. Fewer authors will be able to make a living from writing and will have to look for another way to earn. Not only would it be a loss to the book market and to culture; it would be downright boring. We believe that booksellers should use their influence to encourage reading diversity.

That’s why in her master thesis, Lára tested three different nudges to drive reading diversity focusing on other-than-bestsellers and turned them into campaigns using point-of-sale materials, testing them in the bookstores of the American Book Center in Amsterdam and The Hague, The Netherlands. She tested her campaigns in two consecutive two-week periods; a control period with no point-of-sale material and a test period with the material.

You may also like this less-famous crime author

It is a variation to a well-known nudge: based on her preference for one author or genre, the patron of a bookstore receives a suggestion for another author or genre. It is based on the theory of ‘temptation bundling’: an individual is encouraged to engage in ‘should’ behavior by linking it to ‘want’ behavior. ‘Want’ behavior is behavior that one already displays and enjoys. ‘Should’ behavior would be good for the individual’s welfare. Similarly, ‘should’ products offer great benefits but are harder to opt for, which is why they are bundled with ‘want’ products. Readers are encouraged to buy books from authors or genres that they are not likely to pick up, by bundling them with books that they already read.

This nudge is turned into point-of-sale material placed in the crime fiction section of the American Book Center in Amsterdam. Crime fiction has gained a lot of traction over the past years and several authors have emerged as consistent bestsellers. John Grisham, Jo Nesbø and Lee Child were selected to be our ‘want’ authors, using them to point customers to the works of less-known yet high-quality crime authors. Together with management of the bookstore we selected three titles and authors to be our ‘should’ products: The Spanish Game by Charles Cumming (2006), The Ex by Alafair Burke (2016) and I Saw a Man by Sheer Owens (2015).

Although of high quality, they are not promi­nently featured in book reviews and marketing materials, and they do not sell well.

To determine if the point-of-sale material drove sales numbers, we compared the sales of the titles across two periods; a control period of two weeks without the point of sale materials versus a test period of two weeks with the materials. In total, a total of 12 copies of the three books were sold in the test period (~.86 copies a day) versus nine copies in the control period (~.64 copies a day). The numbers are low but the difference is significant: the point-of-sale material did indeed help to sell a few more copies of less famous crime writers than we would have expected in its absence.

You may also like this genre with similar traits

This variation of temptation bundling encourages patrons to try books from a genre that may interest them but that they currently are not likely to read. The interest may come from a similarity of traits. We offered patrons a bundle deal if they bought a historical fiction book together with any book from the fantasy/sci-fi section. Books from the fantasy/sci-fi genre (‘want’) have a loyal buyer base and already sell well. The genre of historical fiction (‘should’) does not sell well and management wants to boost it. Management thought that fantasy/sci-fi readers of could be interested in historical fiction because of the historical elements that characterizes both genres.

Three titles were selected: Wolf Hall by Hilary Mantel (2009), The Last Kingdom by Bernard Cornwell (2004) and Outlander by Diana Gabaldon (1991).  To further prompt sales, a €2 discount was offered on the titles if purchased with a fantasy/sci-fi book.

The point-of-sale materials were put in both American Book Center stores, The Hague and Amsterdam. The layout and the placement of titles across the stores is different. In Amsterdam, fantasy / sci-fi fiction and historical fiction are placed close to one another on the same floor so patrons can easily locate the suggested historical fiction titles. In The Hague, the titles are spread across sections. The Last Kingdom is in Military/History, Outlander is in Romance and Wolf Hall is in regular fiction. That’s why we believe that the effects of the campaign may be stronger in Amsterdam than in The Hague.

 Number of copies sold
in the control period in the test period
Amsterdam 2 10
The Hague 11 15

Statistical test indicated that the lift in sales is low yet significant and it is stronger in Amsterdam than in The Hague. So, pointing out a similarity between two genres can nudge lovers of a popular genre to buy books from a less popular genre.

Look at the effort the author has put in it

A third program that was run follows the effort heuristic. This heuristic says that the more effort consumers think that the creator has invested in producing an object, the more they will value the object. Effort is here a proxy for the quality.  Non-fiction books are particularly well suited to marketing based on the effort heuristic as they are often the result of extensive research, craft, and effort. The challenge is to express the author’s efforts in a meaningful way.

This nudge was only placed in the Amsterdam store of the American Book Center. Six titles were selected from existing inventory: Time Travel: A History by James Gleick (2016), History’s People: Personalities and the Past by Margaret MacMillan (2015), The Unwinding: 30 Years of American Decline by George Packer (2013), Solo Faces by James Salter (1979), Island at the Center of the World by Russell Shorto (2004) and Nimona, a graphic novel by Noelle Stevenson (2015).

The titles were selected by the staff of the American Book Center who were asked to pick-out books based on the amount of effort they perceived the author had put into writing a book. They are no best-sellers, received little attention, and are not highly rated in book reviews. The effort heuristic was implemented by placing marketing material next to the selected titles on shelf. The material informs the patron of the effort invested by the author in creating the book: research, artistic endeavor or other efforts.

The impact of the nudge was modest: 12 copies of the suggested books were sold in the test period versus eight copies in the control period. Part of it may have been an inventory problem “The Unwinding: 30 Years of American Decline” by George Packer sold out completely in the test period. The reason why this particular title sold so well during the test period may not have been because of the nudge but rather because it was a highly topical book at the time as the test period coincided with the 2017 US presidential elections. Therefore, we cannot be sure if the sales figures for this title are the result of the nudge we created or because of other factors. The main lesson learned is to make sure to have sufficient inventory of a suggested book when putting it on any kind of promotion.

Nudging helps to drive reading diversity

In her thesis, Lára has done some real-time experimentation with nudges that may drive true reading diversity: not just of bestselling items, but of book titles, genres and authors that are less obvious. There are several limitations to the experiments (limited number of titles; short test cycles; no detail about daily sales). Nonetheless, the lifts in sales volume do show that nudging has potential to drive reading diversity. Temptation building seems to be particularly promising, even when the temptation bundle involves no discount. We suggest book sellers use nudges to drive reading diversity in the interest of the book market, authors, genres, and of culture in general.

Acknowledgement

The authors wish to thank the management of the American Book Center, with stores in Amsterdam and The Hague, The Netherlands, for the opportunity to run the experiments in their stores.

About the authors

This blog is based on the Master Thesis of Lára Hilmarsdóttir MscBA (Master of Science in Business Administration): “Applying choice architecture in book retailing to nudge reading behavior”, Rotterdam School of Management at Erasmus University, student number: 344634, date of submission: December 1, 2016. Dr Gerard Loosschilder was Lára’s thesis supervisor and Dr. Dan Schley was her co-reader. The copyright of the thesis rests solely with the author, Lára Hilmarsdóttir.

Consulted work and references

On the Italian book market

Gaffeo, E., Scorcu, A. E., & Vici, L. (2008). Demand distribution dynamics in creative industries: the market for books in Italy. Information Economics and Policy, 20 (3), 257-268.

On herd behavior

Chen, Y. (2008). Herd behaviour in purchasing books online. Computers in Human Behavior, 24 (5), 1977-1992.

Walls, W. D. (2014). Bestsellers and blockbusters: movies, music, and books (pp. 185-208). In V. A. Ginsburgh, & D. Throsby (Eds.), Handbook of the Economics of Art and Culture, Volume 2. Oxford: North-Holland.

On temptation building

Milkman, K. L., Minson, J. A., Volpp, K. G. M. (2014). Holding The Hunger Games hostage at the gym: an evaluation of temptation bundling. Management Science, 60 (2), 283- 299.

Milkman, K. L., Rogers, T., & Bazerman, M. H. (2008). Harnessing our inner angels and demons: what we have learned about want/should conflicts and how that knowledge can help us reduce short-sighted decision making. Perspectives on Psychological Science, 3 (4), 324-338.

On effort heuristic

Kruger, J., Wirtz, D., Van Boven, L., & Altermatt, T. W. (2004). The effort heuristic. Journal of Experimental Social Psychology, 40 (1), 91-98.

Reading list from the nudges

Crime

Charles Cumming (2006) “The Spanish Game” https://www.amazon.com/Spanish-Game-Charles-Cumming-2006-08-06/dp/B01K94070O/

Alafair Burke (2016) “The Ex: a Novel” https://www.amazon.com/Ex-Novel-Alafair-Burke/dp/006239049X/

Sheer Owens (2015) “I Saw a Man” https://www.amazon.com/Owen-Sheers-Novel-2015-06-24-Hardcover/dp/B01GBBFATW/

Historical fiction

Hilary Mantel (2009) “Wolf Hall” https://www.amazon.com/Wolf-Hall-Hilary-Mantel/dp/0312429983/

Bernard Cornwell (2004) “The Last Kingdom” https://www.amazon.com/Last-Kingdom-Saxon-Chronicles/dp/0060887184/

Diana Gabaldon (1991) “Outlander” https://www.amazon.com/Outlander-Diana-Gabaldon/dp/0440212561/

Effort heuristic

James Gleick (2016), “Time Travel: A History” https://www.amazon.com/Time-Travel-History-James-Gleick/dp/0307908798/

Margaret MacMillan (2015), “History’s People: Personalities and the Past” https://www.amazon.com/Historys-People-Personalities-Massey-Lectures/dp/1487001371/

George Packer (2013), “The Unwinding: 30 Years of American Decline” https://www.amazon.com/Unwinding-Thirty-Years-American-Decline/dp/0571251293/

James Salter (1979) “Solo Faces” https://www.amazon.com/Solo-Faces-Novel-James-Salter/dp/0865473218/

Russell Shorto (2004), “Island at the Center of the World” https://www.amazon.com/Island-Center-World-Manhattan-Forgotten/dp/1400078679/

Noelle Stevenson (2015), “Nimona” https://www.amazon.com/Nimona-Noelle-Stevenson/dp/0062278223/