No More Nudges
Behavioural Economics took flight only to come crashing down with a bang.
Failure to replicate even the most basic of findings has started to raise eyebrows and questions.
I can personally attest to this. I wasn’t immune to the allure of cognitive biases and the quick and easy interventions they offer – a.k.a nudges. I fell in love with the field and its potential and immediately started testing nudges in the real world and specifically in fundraising.
The majority of the tests failed to replicate the advertised effect, or the effect was weaker than expected, Even worse, it backfired. I took full responsibility: maybe I hadn’t understood the effect well enough. Maybe I hadn’t considered the context parameters well enough. Or maybe my execution just wasn’t the right one for that audience.
I never once thought that cognitive bias –nudges–was a bogus effect to begin with. Until recently.
A more comprehensive examination of the original studies showed that some of the findings had been systematically misrepresented. And we’re not talking about findings around an obscure nudge that no one has ever heard of. We’re talking about the most famous nudge of all: loss aversion, whose authors won a Nobel Prize.
When the most widely accepted nudge is in doubt, you should really start questioning everything.
All this seems like the final nail in the coffin for Nudge theory. Is the field useless?
No.
There are plenty of great researchers and great insights out there. And there are observable biases in human decision making. What we need is more humility combined with more thinking time. For example, the business problem – 2nd gift conversion or sustainer conversion or donation page conversion – matters, a lot. Ideas based on theory matter, a lot. And perhaps most important, human differences matter, a lot. Why do we expect the same intervention to have the same effect on everyone?
This all leads to an important distinction, behavioral science is not behavioral economics. The latter is a small subset of the former. Behavioral science isn’t parlor tricks or one-size-fits-all solutions. It’s a multi-disciplinary approach to which we must add humility and think time.
We need to accept there are no shortcuts to changing human behaviour. Maybe what sounds too-good-to-be-true is just that. Our preference towards quick and easy solutions and our tendency to avoid excessive effort has temporarily blinded us.
But now, we all know better. And here’s what I’ve known for the last 5 years in the context of fundraising:
- Most nudges – implemented in a one-size-fits-all vacuum- seem to produce inconsistent, unreliable results.
- There are deeper behavioural science insights we can rely on that better explain and predict giving e.g. your donors’ identity, their commitment to your organization, their personality.
- Fostering your donor’s volitional motivation, the one that comes from within, is key to fundraising success. You can achieve that by taking into account who your donor is (identity & personality & preferences) and by tailoring your communications to match it.
- Pressuring donors into giving only works in the short-term and it’s a very myopic fundraising strategy.
- Listening and acting upon donor feedback is a goldmine which has the potential to transform both donor-organization relationships and your overall strategy.
The problem with all this? They are not quick fixes. They take a lot of planning, work and effort. And that’s why they are so easily ignored.
Kiki
8 responses to “No More Nudges”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Fascinating, and sobering, take Kiki. So… you’re saying good fundraising takes planning; there are no magic shortcuts. Might you be saying what we know from behavioral economics is not the same as the broader field of behavioral science. One is tool; the other gestalt. We have to get the latter right to truly benefit from the former? Is your advice to engage in as much research as possible – surveys, analytics tracking engagement, phone calls, in-person visits — to get to know your donors better? That makes sense to me! Thank you.
That’s right, Claire. We just have to recognise, it takes effort. We can’t expect one small intervention to change the face of fundraising. It requires extensive literature review of a specific issue, insights work, and in-market testing. And maybe the most difficult of all: systemic changes so we can put the insights to practice. Wouldn’t it be a shame to miss out on a great strategic application just because the CRM can’t handle another field? Unfortunately, more often than not, that’s the reality. So it takes a lot of work to understand the field better but also to adapt our processes.
Highly recommend this book by Henrich. So much research (on nudging and everything) is done on WEIRD people & that’s a minority of the world’s population, and there are amazing differences in how people think and feel. Go figure! Joseph Henrich reveals all in his ambitious theory-of-everything book, The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous.
Thank you for the recommendation, Harvey. To add to that, it’s not just the cultural differences in cognitive biases that shouldn’t be ignored but also the individual ones. Within the same culture, you might see different responses to the same nudge based on people’s personality traits for example. Like I said in the post, we shouldn’t expect the same intervention (nudge or not) to have the same effect on everyone.
Great post and important alert to all of us, “users of research”, to be wary of the limits of behavioral research. Yet, to avoid unfairly criticizing the original authors of these findings (e.g., Prospect Theory), one probably needs to also recognize two things. First, many of these authors did not propose all the “silver-bullet insights” (or “magic shortcuts”) that were disseminated in the last few decades (sometimes superficially) derived from their theory. Second, the awareness and knowledge of the general public for the existence and influence of “nudges” in general has increased significantly in the last decades (e.g., due to media featuring this type of findings, several best-selling popualrizing books on the topic, etc). So, would it be unconceivable that what worked in the 1980s (note: Prospect Theory was published in 1979), does not work today anymore…? If so, the replication failures we witness today may be more an “evolution” in behavior (consumers/humans becoming more sophisticated) than a mistake or oddity in the original research? Make no mistake, the lack of replication means there is a reason to be concerned about the “fuss” and “hype” around nudging. However, pointing fingers at the original researchers is another thing, in my opinion…
Great questions, Nuno. No one would blame the researchers if the public misapplied their findings as silver-bullets. Unfortunately, what we discuss here is researchers misrepresenting the original findings and the effectiveness of a certain intervention. As for your second point, I expect familiarity will definitely change the effectiveness of such interventions. However, the wider public has only very recently become aware of the field despite Herbert Simon talking about bounded rationality in the ’50s. I’m not sure if a decade of awareness is enough for “evolution” to kick-in. I might be wrong. In any case, this would be another reason for additional thinking and research.
Kiki I seem to remember that you and I had a similar conversation years ago when my manager and director were expecting to see ‘immediate’ responses from our new ‘nudge’ testing. (I shall not name the charity here).
Trying to convince upper management to allow time and keep the course is a difficult challenge in this world of – fast food, instant response to social media posts, mobile phones where all of your contact options are available 24 hours a day, etc.
Unfortunately in the digital world of online promotion and donations the nudges are much more difficult to measure than they are in good old fashion personalised printed direct marketing mailings.
All those years ago you and I were correct in our application of the nudge in that particular situation – so much so that the charity is still using the method.
Useable answers are not immediate – even nudge testing takes time and multiple attempts to properly measure
oh yes, tech advances are challenging our patience; it’s wearing thinner and thinner. We’re not patient enough for a slow browser to open a page. How can we possibly wait for proper test results? I’m joking of course but there’s just not enough repeated testing, or longitudinal testing in the field. It’s a once and done deal, usually. I’m not sure if it can solely be attributed to lack of patience. Equally bad is the lack of application of insights we know are improving performance because there’s a lot of hassle involved: the status quo, rigid beliefs, performance targets and inflexible processes… Some of this could also explain the testing issue.