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Behavioural economics: Nudge them into switching
Includes video content
Recommended by Warc editors
Colin Strong, Admap, March 2014, pp. 14-16
This article describes how behavioural science can be used to overcome brand loyalty and nudge consumers into switching.
This article describes how behavioural science can be used to overcome brand loyalty and nudge consumers into switching. Even though consumers can save money by switching, few do in many categories. There are several key commercial considerations in this: hyperbolic discounting, where potential discounts are less salient to the consumer; regret aversion, where people fear making the wrong choice; and loss aversion, where people fear losing money (this can also stimulate switching). Data collection capabilities can be used by companies to enhance their customer service, allowing consumers to compare their circumstances to others, and get the best deal. Developments in this area may be particularly useful in low-churn categories.
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