Nudging beyond comms: what marketers can learn from the Nudge Unit

At a time when marketing directors are seeking to reinvent themselves as Chief Customer Officers or Heads of Customer Experience, it might help to look outside of what is strictly defined as “marketing” for inspiration.

One such place is the Behavioural Insights Team, which works with the UK Government. And, as luck would have it, the head of the unit, David Halpern, has written a book, which I’d highly recommend. Inside the Nudge Unit tells the story of how the unit has fared since its inception in 2010.

There are lots of concrete examples of how small changes to the way letters are written and choices are presented can (and do) lead to more people taking the desired action. There are even some examples of how behavioural insights can inform successful advertising, such as the anti-smoking work done by my old agency, Dare.

But what’s really striking is the battle Halpern talks about to exert influence beyond such comms-based interventions. To succeed properly, he says, the unit had to influence policy.

Halpern is no marketer, but his challenge is familiar. Like those "new" marketers with their new-fangled titles, Halpern was essentially engaged in a battle to move his discipline beyond the crafting of messages – to a place where it could use insight and creativity to inform the product itself.  

If you believe that marketing should do this – that it is at least as much about shaping the experience a customer has with the brand as it is about spinning them a line – then there is real inspiration to be drawn from the examples he provides of where that challenge was met.

The key was marshalling human insights (born of behavioural science), hard data (drawn from an embrace of statistics) and creative ideas (in the form of lateral problem solving) –with impressive results.

I’m not going to summarise all of them here. One will suffice to illustrate the point.

In 2010, the economy was still struggling and banks remained highly reluctant to lend money to small businesses. This was seen by the Government as a vital blockage to economic growth. A problem no amount of quantitative easing seemed able to address.

Halpern’s new team was asked if they had any bright ideas. Like good behavioural scientists, they wondered first if there might be a way of making it easier for small businesses to get a loan. If the banks were making it difficult, and the small business owners didn’t trust them anyway, what other sources of finance might be more attractive? With a particular focus on the building trade, they looked at the trusted relationships small tradesmen already had – identifying lumber yards, hardware warehouses and hire centres.

Like good commercial marketers, they also looked at the hard financial data. And they discovered that another consequence of the economic stagnation was that large businesses were sitting on record levels of cash.

They put 2 and 2 together and then made a creative leap: they proposed a scheme whereby large chains in the sectors they’d identified could provide loans to their builder customers.

As you might imagine, persuading the hardware retailers and hire shops to branch out into finance wasn’t easy. It required lots of hard work, patient negotiation and support – from helping to calculate the potential returns to simply pointing out the data the retailers held on their customers and how much of an advantage that gave them when deciding how much to loan to whom. It also required some incentives. But, ultimately, this highly creative solution was implemented.

Its success may be hard to quantify in absolute terms. Suffice to say, the scheme was used to facilitate modest amounts of finance that would have made a huge difference to the businesses in question.

But the lesson from this story is not about the success of the scheme per se. Rather, it is about the way in which it was conceived and the argument for its implementation won.

To reiterate: it took human insight – not the sort that comes from focus groups but deep, psychological insight that comes from an understanding of the scientific evidence about what makes humans tick; it took hard data – not just numbers churned out on a spreadsheet but proper analysis, mining the data for clues to help solve a particular problem; and it took creative thinking – the ability to make a lateral leap and think the previously unthinkable. Plus, of course, it took conviction, intelligence and sheer hard work. They may have been making life easier for small tradesmen, but no-one said anything about that being an easy thing to achieve.

I suspect you won’t read about this case study much elsewhere. The headline grabbing stuff is about pension enrolments, energy industry transparency, job centre processes and e-cigarettes: all worthy of your attention. But this little intervention has all the ingredients of what it takes for marketing to make a real difference.  It’s clear, it’s simple – but it’s far from easy.