Monday, December 30, 2013

Transport Resolutions with Tokens

As we approach the annual opportunity for New Year’s resolutions, I remind you of the resoluteness of consumer habits. The best predictor of future behavior is still past behavior.
     Yet, it can take only a small token reward to nudge people toward starting to do what they know is better. One example, from the realm of health care in a third world country, is described by researchers at Massachusetts Institute of Technology:
     Although parents in India generally recognize the importance of having their children immunized against diseases, they often neglect to do it. Recognizing this, the researchers divided a set of rural Indian villages into three groups:
  • Immunization was available, but no clinics were announced 
  • Clinics were scheduled, and the schedule was broadly publicized 
  • At the scheduled and publicized clinics, each parent who brought in a child for vaccination received a small quantity of lentils 
     The rate of immunization for young children turned out to average 6% for villages in the first group, 17% for those in the second group, and 38% for those in the third group. A small reward more than doubled the consumption rate.
     Other research indicates that it is, in fact, the modest size of the token which accounts for its effectiveness. If the incentive is large, the consumer comes to view it as a payment for compliance. The result is a reversion to the old habits as soon as the incentive is discontinued. Worse yet, the bigger the reward, the greater the possibility the consumer will perceive it as a bribe and consequently dig in her heels against change as a matter of honor.
     Harvard University researchers say that another important characteristic of effective tokens is that they can be used promptly. The bag of lentils qualified. Similarly, surprise gifts which give immediate pleasure have been effective in convincing children in economically deprived circumstances to prefer healthy foods. On-site experiences—such as the opportunity to meet the chef at a restaurant—can be effective tokens, since experiences are consumed more promptly than products.
     The small incentive nudges the shopper to take the risk of purchasing. Researchers at University of Chicago and Columbia University find that with financial investment decisions where the client gets stuck, it works to offer a small gift with each alternative because this moves the decision toward the riskier choice, breaking the tie. The researchers call this the “mere token effect.”

Click below for more: 
Give a Free Token to Shift the Odds 
Dissolve Decision Paralysis 
React When Faced with Reactance 
Nourish Good Shopper Rituals

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