When David Cameron became Prime Minister of Britain and formed his coalition government in May 2010, he knew that for his government to succeed and make meaningful impact, he had to collect more taxes, cut the rate of dropouts from further education, boost citizens take-up of business support schemes, increase recruitment level and performance of minority groups, among other public policy concerns. He also knew that laws, regulations and public communication campaigns were not making the desired impact in persuading British citizens to embrace the vision of his government. He knew he needed more subtle ways to influence their behaviours. And deep down in his consciousness, he was convinced that using insights from Behavioural Economics could do the job. So, he established UK’s Behavioural Insight Team, also known as the Nudge Unit in July 2010.
The mandate of the team was the following:
- Make public service more cost effective and easier for citizens to use.
- Improve outcomes by introducing a more realistic model of human behaviour to public policy.
- And whenever possible, enable people to make better choices for themselves.
The Prime Minister declared that the team would be shut down on its second anniversary if it failed to make a ten-fold return on its cost and affect, at least, two major policy areas.
Surprisingly, within the its two years, the team which was staffed with psychologist, economists and civil servants familiar with the workings of government and was advised by Richard Thaler, the 2017 Nobel Prize winner for his contribution to Behavioural Economics, achieved monumental success as follows:
- Improved tax repayment rates by generating 30 million pounds of extra revenue annually.
- Reduced by 150,000 the number of repossession intervention by bailiffs and also saved 30 million pounds in the process.
- Added 100,000 people to organ donation register.
- Persuaded 20% more people to consider switching energy provider.
- Doubled the number of applicants to the British Army.
In 2013, the UK’s Behavioural Insights Team became a social purpose company co-owned by the cabinet office, Nesta and its employees. It now helps governments of different countries solve a range of public policy problems; such as obesity, social mobility, productivity and other social issues. Its success has encouraged Australia, Singapore, Germany, USA and other countries to establish their own Nudge Units. Business organizations are not left out. The power of Behavioural Economics principles in influencing people’s decisions and actions is now firmly established globally.
What is Behavioral Economics?
Behavioural Economics is a new social science on the bloc that combines ideas from Economics, Psychology, Neuroscience and Sociology to explain how people make decisions and behave. Unlike traditional Economics, which assumes that humans make logical and calculated decisions, Behavioural Economics asserts that humans are hard-wired to make irrational decisions and engage in irrational behaviours.
It says that the way human beings process information is the culprit. And it identifies two systems in our brains that we use: System 1 is the brain’s fast and automatic mode that requires no effort from the person involved. It is instinctive and intuitive. And system 2 is the brain’s slower and analytical mode where reason dominates. Unfortunately, system 1 is much more influential than system 2 in real life situations. Humans nearly always resort to it when confronted with a decision. This explains why human beings are more prone to irrational decisions and behaviours than rational ones.
Behavioural Economics teaches us that even though it may take the human brain three to seven milliseconds to identify a picture and read a word aloud from a page, cognitive biases place limitations on its ability to analyze issues in order to reach rational decisions and take rational actions.
Defined as failure in our thought processes due to miscalculations, external influences or personal experiences, cognitive biases are the reason we are also prone to what behavioural scientists call intention-action gap. Even when we know that behaving in a particular way is not in our best interest, getting ourselves to do otherwise is often a herculean task. Smokers know that smoking is dangerous to their health; yet, they cannot bring themselves to stop it. The main message from Behavioural Economics to PR professionals is this: Cognitive biases predispose human beings to make irrational decisions and behave irrationally. Therefore, effective Public Relations is only possible when communication is structured to overcome or reduce these biases and prompt the target audience to act in a desired manner.
How It All Began
Much of what we know in Behavioural Economics today comes from the works of two great scholars. The first is Daniel Kahneman who was awarded a Nobel Prize in 2002 for his ground breaking work in applying psychological insights to Economic Theory, particularly in the areas of judgement and decision-making. His book, Thinking Fast and Slow is the summary of his research works.
Richard Thaler and Cass Sustein got us another great book on the subject in 2008, titled: Nudge: Improving Decisions about Health, Wealth and Happiness. It is said that David Cameron was inspired by this book to set up UK’s Behavioural Insight Team or the Nudge Unit. Richard Thaler won the 2017 Nobel Prize in Economic Sciences for his contribution to Behavioural Economics.
Research on Behavioural Economics has been going on for a couple of decades now. This has culminated into hundreds of books and articles. But it is the works of these two great minds that have made the most impact by popularizing and drawing global attention to the new field.
Why Public Relations Needs Behavioral Economics
I believe that Public Relations needs behavioural Economics more than any other field of human endeavour. Most times, PR practitioners are called upon to persuade or influence the way the target audience of an organization thinks, makes choices and behaves. It is unfortunate that most PR professionals still approach their work with a publicity mindset only, believing that by providing more information or creating more awareness for an organization, product or service, the target audience will make rational decisions and act in the best interest of the organization. They fail to realize that knowledge alone does not alter behaviour. A publicity-driven campaign that aims to change behaviour is doomed since it is not based on a solid understanding of the drivers of human behaviour. Simply telling people what they should do or should not do rarely changes behaviour. Behavioural Economics is telling us very clearly that behaviour is shaped by several factors which must be considered if any meaningful change is to be achieved. The Public Relations’ graveyard is littered with the tombs of behavioural change campaigns that failed to acknowledge the drivers of human behaviour.
Public Relations’ Remit Expands
The advent of Behavioural Economics has brought with it the expansion of the remit of Public Relations. It has taken Public Relations back to its root in Social Sciences. And it has opened up a whole new, profitable area of practice known as Behavioural Change Communication. Christopher Graves saw it coming. Not long ago, he stepped down as the Global Chair of Ogilvy PR to become the President and Founder of Ogilvy Center for Behavioural Science which aims to improve marketing effectiveness by developing a better understanding of why people make decisions.
Applying Behavioural Economics in Public Relations
The basic philosophy of Behavioural Economics is that people should not be forced to decide or behave in a certain way. Rather, they should be encouraged or nudged to do so. To nudge is to give some form of indirect suggestions, either in messages or in design, that influence people to make certain decisions or prompt them to act in a particular way.
The following key principles, when applied correctly, can help PR professionals achieve that through Public Relations campaigns and in other dealings with stakeholders of their organizations:
- Loss Aversion
Behavioural Economics teaches that humans tend to be twice as much motivated to avoid losses than to secure gains. People will most likely rather take risks to avoid loss than do the same to obtain gain. So, instead of framing your messages or message to highlight what your target audience stands to gain, it is better to emphasize what they stand to lose. For instance, researches have shown that when developing messages to increase voters’ turnout during an election, messages that trigger a sense of loss work better. A good example is: “Don’t miss out in determining your future”, ‘Have your say on who represents you.”
- Social Norm
This means that we are heavily influenced by the actions of people around us to the extent that we want to act as they do. A PR message that tells a target audience that others are performing certain behaviours increases the likelihood that they will do likewise.
In 2014, UNDP and its partners launched “Baidu Recycle” campaign with a mobile app that allows Chinese households to have their e-waste items picked up at their doorstep for safe recycling with a click of a button. Within a year, the app arranged for the safe recycling of over 11,429 items, according to a United Nations report, Behavioural Insight at the United Nations: Achieving Agenda 2030. This achievement was made possible with a simple message that used social norm – “Join the 250,000 people who are already helping to preserve our planet.”
Social norms can have tremendous impacts on behaviour largely because we are strongly influenced by what others do. We don’t want to be out of step with our peers, our neighbours and the world. It sets up what society expects from people, and they are moved to meet the expectations.
Researches in Behavioural Economics have shown that humans respond quickly to incentive. Whether tangible or intangible, rewards provide an incentive for behavioural changes
In her October 2017 article in Harvard Business Review, The rise of Behavioural Economics and its influence on Organizations, Francesca Gino reports that General Electric, in its bid to address the issue of smoking among its workforce, which the company believed impacted them negatively, collaborated with Kevin Volpp and his team to conduct randomized controlled trial experiment. Employees in the treatment group each received $250 if they stopped smoking for six months and $400 if they stopped for 12months. Those in the control group received no incentive. Interestingly, the treatment group had three times the success of the control group. And, surprisingly, the treatment group remained without smoking 12 months after the incentive was discontinued.
Our attention is more likely to be drawn to what is new, prominent, colourful, dynamic and relevant to us than to what is not. This explains why the use of images and symbols that speak to a people is more likely to win their attention and lead to a change in their behaviour. It also explains why making a call-to-action on your website more colourful and germane to your target audience is more likely to prompt them to take the action.
Personalization of messages works for the same reason. When you use names and not generic greetings in your emails and other correspondence to your targets, you increase your chances of getting them to do what you ask for.
Embed these principles in your messages, channels or in your choice of platforms, and in your overall campaign, and you stand a chance of moving your target to act in a desired manner. Simply advocating why your target should adopt a particular behaviour may only register minimal or no success at all. Only Public Relations campaigns that adapt to, and consider, the context of its target audience, especially in terms of what drives their behaviours, and frame messages that appeal to those drivers succeed.
The PR Professional as a Choice Architect
The PR professional is a choice architect. A choice architect has been defined as a skilled and intelligent professional who uses data, social science and his own intelligence to figure out what is really good for people, and then nudges them toward that. He helps organizational leaders, employees and other stakeholders to make choices that are beneficial to the organization, the society and the individual himself. This places on him the responsibility to be ethical in all his actions and communications.
Behavioural Economics is a double-edged sword that can be used for good and evil. Therefore, Public Relations ethics should be the guiding light that directs you on how to use it for the good of all. In conclusion, never get tempted to think that Behavioural Economics is all in all. It is still a developing social science. A lot still needs to be known about how to use its principles to enhance Public Relations work. But one thing is certain: It has come to stay. And the days when the primary knowledge and expertise of the PR professional was in media relations management are over. As more of our communication becomes direct to the audience, there is no option left for the PR professional but to become an expert in this new science of how people actually think, make decisions and behave. It is a sure way to remain relevant.