Image source: BankSimple on Flickr
We all know good communications should be grounded in research and knowing your audience. But what about incorporating what makes people tick? The Ad Council recently caught up with Victoria Adams, Lead Associate at Booz Allen Hamilton who is an expert in this space and is doing some fascinating work in the field of behavioral economics.
Ad Council: How long have you been working in the BE field and what got you started?
Victoria Adams: We have been working in BE for about five years. As a professional economist, I have had a long running interest in BE issues. At first, I was very skeptical. But as the evidence piled up I had to accept that there was something to it. We work in two areas. We help our clients: (1) understand BE and identify how they might use it; and (2) design programs that take advantage of BE insights.
AC: Would you agree that BE is not new to marketing and communications? That is, economists have long looked to the marketing world for insight (like “three for the price of two,” or the impulse buy rack at the supermarket).
VA: Definitely–there is nothing new under the sun. Advertisers and marketers have been doing this forever–economists just caught up. That being said, economists can add something. BE is more than just advertising. It is a way of understanding why and when advertising works. The whole premise of BE is that we are rational decision makers (i.e. we all want something and try to figure out how to get it).
Advertising uses these ideas to nudge people toward one product or another. BE tries to understand why and what are the consequences of these decisions on market behavior. In the long run, the increased understanding we have from these insights will help us be able to understand markets much better.
AC: Can you give an example of how you’re integrating BE principles into program design?
VA: We have found that one of the easiest places to add BE is in redesigning information flow. How and what information is communicated and in what order is very important. If you present people with a little bit of information at a time you tend to get different answers.
For example, we’ve worked with the IRS to show how information flow can be used to encourage compliance and reduce fraud: if you ask a filer to sign their name at the top of their tax return rather than the bottom, they’re less likely to commit fraud.
AC: Talk to me about the work you’re doing using lotteries and prizes.
VA: That’s another easy way to use BE principles—the use of lotteries to create a different decision-making environment. Several states are now allowing credit unions to use “savings lotteries” as a way to encourage savings. So, instead of buying a lottery ticket, a person pays $1 for a government bond and puts that in their savings account. They are then eligible to sign to enter a lottery, based on the pool of everyone else’s savings. This changes the frame of savings—you’re getting people to save but giving them the incentive of a reward.
This is the kind of thing I see growing in government over the next five years. There are some legal/regulatory hurdles to get over (e.g., many Federal agencies cannot give money to individuals) but I think it will become a generally accepted technique.
AC: It always surprises me how money—literally pennies–can motivate. I’m thinking of the one cent tax on plastic bags in Washington, DC and how it’s dramatically reduced bag use by customers.
VA: I think what’s going on is you’re labeling the behavior as bad. And you’re asking someone to do something. So, people are more deterred by the collective wisdom that plastic bags are bad for the environment than the one cent tax. I’d like to see them try just a prompting question–“Do you to use plastic bags? They’re bad for the environment” and see if that that doesn’t work just as well.
AC: How can you make sure it’s actually working? What sort of evaluation metrics do you use?
VA: We develop all BE initiatives as experiments. We start small and if they work, scale up. The key is experimenting. Recently, a colleague asked me about using spot bonuses as a way to encourage employee-sponsored volunteering. Should you give someone five dollars for volunteering? A gift certificate? Or let them enter a lottery? I told them I have no idea: test it. Too often people complain and say something didn’t work. But you need to find out why—did you offer goods when people really wanted money? Things like that.