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Why Santa needs some Choice Architecture

Over the weekend I went to the local shopping centre with my wife and 10-month old child for our first family photo with Santa. We were lucky – our daughter had slept well, and is pretty good with new people, so there were no tears (maybe next year?).

But one thing became obvious – that no one had given serious thought to how a consumer would choose from the myriad of photo packages. The way the photo packages were presented to us caused so many issues: a poor customer experience, longer queue times as every family in front of us struggled to decide on which option to pay for, and likely lead to lower revenue for Santa and his helpers. And this could be an easy fix. So, what could they do to fix this? The answer is Choice Architecture.

Choice Architecture: Controlling the context to influence decision-making 

Choice Architecture came out of Thaler and Sunstein’s infamous book “Nudge: Improving decisions about health, wealth, and happiness”. It refers to the practice of organising the context in a way that influences how people make decisions. This is a reflection that the decisions people make are heavily influenced by the context in which we make those decisions e.g. eating healthier food is influenced by where in a café the healthy food is located; our willingness to accept financial risk is influenced by the way the risk is framed. 

By understanding that context influences decisions, and how context influences decisions, “choice architects” can make deliberate choices about the context that influence real world behaviours. In practice, choice architecture happens all around us. By placing fruit and veg at the front of a supermarket and chocolate bars on the way out, someone has made a deliberate decision to influence what I buy. By placing bus stations at certain intervals, increasing the frequency of buses in my area, and developing an app to track where my bus is, someone is deliberately trying to influence my decision to catch a bus.

What makes Choice Architecture particularly powerful, is when “choice architects” utilise the latest findings from behavioural science – in a deliberate, rigorous way – to influence behaviour. Research has shown that people’s behaviour is more predictable than we many people realise; and that the influences on our behaviour can’t always be detected by asking people what affects their decisions, but by observing what people actually do and how they respond.

Salience: Making the desired option the most visually obvious


One of the simplest solutions is to make the most desirable choice stick out on the page. This can be done through use of imagery, borders, font size and colour, amongst other options. This stems from the fact that the brain is inherently lazy – with a preference for the option. Making the option more salient doesn’t just increase attention, it makes the option easier to process..


For example, Vodafone guides people towards a preferred mobile option, Unlimited, by changing the outline colour to make it more salient. NB: this also works because they’ve focused on one option, instead of highlighting multiple competing options..




Social proof


When making decisions, we are heavily influenced by the decisions of those around us. By utilising social proof we can indicate what a typical decision is and increase the likelihood that a customer will make a similar decision.


For example, in this situation Santa’s photographer could have indicated which option is their most popular option (assuming that’s the option they want to promote), or which is their most popular option amongst a certain type of customer. We were a family of three – what option would most families our size have chosen? We’ve got three sets of grandparents and a range of uncles and aunties we might want photos for – what do people in a similar family dynamic choose?


Decoy product


Another option that may have worked is through the use of decoy products – the inclusion of a similarly priced but inferior choice that makes you away from choosing a lower value option and makes the higher priced option seem like a better deal. This works because value is a subjective experience and is based in the context in which a decision is made. Change the context, and you can change someone’s perception of value.


Perhaps one of the 43 photo packages could have acted as a decoy product to a more expensive product offer?




Anchoring


How do we know something is good value? Obvious really – we evaluate what we get for what we pay against some other value that springs to mind. Anchoring works by deliberately being that anchor value that springs to mind – for example a $5 coffee sounds great given that I’m anchored to pay $5 for coffee in most cafes. A $7 coffee sounds like more dubious value – unless I’m sitting in an airport or at a café overseas where the coffee around me costs an average $7.


This effect has been famously documented by behavioural economist Dan Ariely, using the example of The Economist subscription. In this example, the inclusion of an inferior subscription offer – an offer that few people chose – would have resulted in an increase in revenue of 43%. The inferior subscription offer wasn’t intended to be chosen, but merely makes a more expensive subscription offer appear to be better value and hence more desirable.


In this case, they might’ve anchored me by pointing to the cost of a typical family photo sitting (say $200).



Summary


Some of these examples are more plausible than others. What would make the difference is taking control of the Choice Architecture – being very deliberate about what is presented and presenting in a way that works with how our minds actually make decisions. If employed correctly this can be a win for customers who get a better experience and feel better about their choices, and a win for the organisation who is bringing in greater revenue for existing resources.


By Cole Armstrong 15 Mar, 2024
How do we create persuasive touchpoints that make a difference? By considering how simple ways of reframing our messages, using insights from psychology and behavioural science, can create greater motivation to act.
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If I asked you to think back about an event, maybe a holiday or your last plane trip, your last dinner out, or a shopping experience, what would you remember? If I asked you to describe the experience, chances are you’d feel pretty confident about your memory, or at least some of the key elements. It turns out though, that confidence you’re feeling - it doesn’t relate to the accuracy of your memory. Faulty memories You’re not losing your mind, it’s just that your mind is playing tricks... sort of. We’ve spent quite a bit of time using eye tracking technology through our client projects. It enables us to see a participant’s behaviour – what they actually see and engage with - and the journeys people take through a physical environment, like a mall or retail setting. One project saw participants navigating a store with eye tracking glasses, getting items off a shopping list. As soon as they’d completed their journey, we asked which way they’d walked. 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JCDecaux is one of the largest Out-of-Home businesses worldwide; in New Zealand it specialises in high quality Large Format and Airport touchpoints. JCDecaux is committed to delivering research-led validation to its partners regarding Out-of-Home effectiveness and looks for partners who can deliver neuro or behavioural methodologies that can deliver on this objective.
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