In a WARC Best Practice paper, How Amazon, Netflix and Google use behavioural science to simplify the user experience, Richard Chataway, a Vice President at BVA Nudge Unit UK, observes how techniques such as auto-completing queries and the use of recommendation engines are derived from aspects of behavioural economics like System 1 thinking, heuristics and choice satisficing.
“Consumers want experiences that cost them the least cognitive effort,” he notes; being able to deliver those drives revenue for the platforms that employ them.
And, he adds, creating those experiences depends not on modelling or forecasting, but “ongoing, real-world testing” to understand consumers.
“The key for any company looking to innovate is to make some form of experimentation a constant,” he states.
The most innovative companies run thousands of experiments every year and while most are destined to fail they still provide insights for progress – and the big wins more than compensate for the failures.
Even something as apparently simple as the shade of blue used to show results in the Google toolbar is a result of testing over 40 different shades to see what generated the most clicks, Chataway points out – and this optimisation is estimated to have generated over $200m in additional annual revenue.
“Businesses seek competitive advantage above all else, and a scientific approach to changing behaviour can drive progress and innovation to deliver that,” he says.
“But whether that is achieved by academically robust experimentation, or simply adopting a mindset of continuous testing and learning, hypothesising and deducing – and accepting failure as part of a ‘growth mindset’ – is largely irrelevant.”
Sourced from WARC