Choice Architecture — Present the options, create a nudge
The noble task of deciding the options’ description and how to impact consumer choice with that.
Here is the third article in a series where I am exploring the architecture of choices. The first article gives you a hint about how this story began. The second article reviews the right number of options topic. In this article, you will find out how describing options’ attributes can influence the consumer decision.
The MPG Illusion
There are many technics to describe each option we are presenting to the user. We can also influence them with our words choice, and the way benefits or attributes are listed. I want to refer here interesting research from 2008 in the automobile sector that explores how using “miles per gallon” as a measure of fuel efficiency leads people to undervalue the benefits of replacing the most inefficient automobiles. The MPG Illusion theory shows us how is it possible to influence the consumers to make decisions that are not the best ones. Especially if it looks good at a glance and the consumer doesn’t care to understand them before making the final commitment. It worth a second look if you’re into this topic.
And, can we call it a nudge? I would say not in this case, because it seems it was not a deliberated act to trigger people to choose one option instead of another. However, if we choose to describe the attributes to lead our users to opt for a particular option, we have a nudge.
Creating the nudge
In our case, it was clear that the way we will describe the options should be significantly different. We already agreed on having the choice to move forward in the flow without insurance. On the one hand, there is not so much to add on it — it is self-explanatory. On the other hand, the bank aims to sell their insurances, so we were before a potential nudge to work on it. We had two more options that needed to be informative, clear, and appealing.
For an effective nudge, the visual differences between the available options needed to be subtle but visible, minor, but significative. But transparent and not misleading. It looks like I am contradicting myself here, but that is the direction to achieve the perfect way to communicate the options and incorporate the right trigger.
Visually we decide to represent all options is a very similar way that allows the user to compare them without effort. The next challenge was to determine what attributes to include and how. For that, we had a little help and inspiration from a research article that explores how partitioning attributes in online search interfaces change the valuations of those attributes — and impacts subsequent choice. I am talking about the Shaping online consumer choice by partitioning the Web from Jolie M. Martin and Michael I. Norton.
After several studies with multiple choices, they found that attributes displayed as separated categories tend to receive higher decision weight than properties aggregated under umbrella categories. These effects indicate that the user understands this attributes organisation as a ranking of importance.
Improving the small details
Based on this, we decided to list the most relevant attributes — price, coverage, and interest rate — in the most transparent manner for the user to lead him to a smart and responsible choice. We also translate the financial information to users understand the impact of their choices in their wealth. With this type of communication, we reduce the cognitive effort associated with processing information.
Of course, we included an option for the user to check all the bureaucratic information. However, we decide to highlight the crucial one for a comparison between them and the ultimate decision. As I said in the previous article, the financial sector as a particularity, Consumers faring worse with many options rather than fewer because of the topic complexity. The same applies to the evaluation of the attributes. As a result, we choose to limit the number of properties by valuing the financial impact.
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References
Thaler, R. H., & Sunstein, C. R. (2009). Nudge: Improving decisions about health, wealth, and happiness.
Larrick, R.P.; Soll, J.B (2008). The MPG Illusion. Science. 320 (5883): 1593–4. doi:10.1126/science.1154983. PMID 18566271. S2CID 206511466.
Martin, J.M.; Norton, M.I. (2009). Shaping online consumer choice by partitioning the web. Psychology and Marketing. 26 (10): 908–926. doi:10.1002/mar.20305.
