Behavioural economics: Nudge them into switching

Colin Strong

Consumer reluctance to switch brands is irrational, but by using behavioural science to drive acquisitions, people can be nudged into action, overriding the brain's desire to procrastinate.

Despite the encouragements of marketers and politicians, some markets, such as retail banking and utilities, seem to be far more resistant to churn than others. For example, according to GfK's Financial Research Survey, only 3% of us change bank account in a year. It seems remarkable that consumers are not willing to make relatively simple changes to generate what can amount to substantial cost savings, particularly in times of financial constraint. And despite the Payment Council's Current Account Switching Service launch in September 2013 in the UK, making it easier to switch current accounts, there has only been a very moderate increase in churn.