Banff Aspen Lodge has an interesting environmental incentive program. If guests stay two or more nights and prefer no housekeeping service in this hotel, it offers a choice of options for the guest’s consideration:
- Option 1: The hotel will make a donation of $4 on behalf of guests to the Banff Community Foundation, which supports environmental initiatives in their community. To select this option, guests insert the Green Card into the entry door lock.
- Option 2: Enjoy one complimentary beverage at the Whitebark Cafe, which is located in the lobby. To select this option, guests insert the Yellow Card into the entry door lock. A complimentary beverage coupon is delivered to the guest’s room.
I suspect someone carefully designed a choice architecture with a psychological intervention to nudge guests to choose “No” housekeeping service. This program will be effective because…
- Three options are provided (housekeeping vs. environmental 1 vs. environmental 2). It differs from the choice architecture commonly observed in the behavioral economics in which two competing options are provided. Having three options may relieve the guests’ burden, which decreases their intentions to defer choices.
- Only two environmental options are highlighted. As guests read and think about “how” to protect environment, the chance they select one of the two environmental options may increase.
- Two environmental options reflect the two motivations why people should behave environmentally friendly; helping others (charitable giving) and helping themselves (economic incentive).
- Finally, when guests select one environmental option, they do not speak or write down but simply insert a card into their own entry door lock. This simple behavior has no peer pressure.
This environmental incentive program might be more effective than making a commitment at check-in, a scientifically proven intervention in the prior marketing paper.
Influencing behavior change is an ongoing challenge in psychology, economics, and consumer behavior research. Building on previous work on commitment, self-signaling, and the principle of consistency, a large, intensive field experiment (N = 2,416) examined the effect of hotel guests’ commitment to practice environmentally friendly behavior during their stay. Notably, commitment was symbolic—guests were unaware of the experiment and of the fact that their behavior would be monitored, which allowed them to exist in anonymity and behave as they wish. When guests made a brief but specific commitment at check-in, and received a lapel pin to symbolize their commitment, they were over 25% more likely to hang at least one towel for reuse, and this increased the total number of towels hung by over 40%. This research highlights how a small, carefully planned intervention can have a significant impact on behavior. Theoretical and practical implications for motivating desired behavior are discussed.
On the first day of the marketing class, I found and presented an impressive post on the design marketing lab site during the self-introduction on the design marketing lab site. The post was ‘A CHOICE ARCHITECTURE TO REUSE HOTEL TOWELS’. I’m going to write the difference in my thoughts before and after the marketing class.
The above post contains a study that increased the towel reuse rate through behavioral economics. It emphasizes how small and carefully planned interventions can have a significant impact on behavior and shows the effect of “dedication.” I’ve seen a similar case in a book called “Nudge.” When the hotel guest said “Please reuse the towel once for the environment.”, it had little effect. But when he said “The towel reuse rate for room 601 is 80 percent”, it’s reuse rate was much higher than the former.
Through this example, I felt that people copied other people’s behavior. According to marketing class, this case is applied to cognitive learning, and among them, it is likely to be applied to observational learning. Observation learning is observing and imitating the behavior of others. Rather than simply asking for reuse 1, when others say reuse, I feel like I should reuse it and do it. There were not many changes, only a few words were changed and presented. But there were many differences in the degree to which they affected consumers’ behavior. I could feel the greatness of behavioral economics here.
Is it really for consumers when we try to change their behavior through intervention? Wouldn’t it conflict with consumer needs? Applying this to the above case, it can be said that what is for the environment is for the consumer. This is because no one wants to live in a destroyed environment. Let’s look at it in terms of needs. Consumers who are interested in the environment and value savings may not conflict with their needs, but may conflict with the needs of consumers who are indifferent to the environment? Isn’t this contrary to the original purpose of marketing to meet the needs of consumers and generate profits?
At the beginning of the marketing class, the effect of behavioral economics in terms of the environment was enormous, so I thought it was only good. However, as I encountered the cases of various companies in class and accumulated knowledge, I considered the realistic situation. Most companies operate for sales and profits, not for environmental conservation. In this case, I wondered if behavioral economics could be said to be a 100% good strategy. This is because if the company presents conditions that are favorable to itself that it did not intend to do, a situation can occur that deceives consumers.
If I were the CEO of a company, I think I would hide the shortcomings of our products/services as much as possible and reveal the advantages as possible. I think everyone will, not just me. If we induce only a favorable response to our products/services through intervention, it can be a kind of “Gaslighting” and consumers’ right to know can be violated.
According to the loss-avoidance theory, people are more sensitive to loss than to profit. Therefore, they are bound to be more sensitive to disadvantages than advantages when using these products/services. That’s why companies hide their shortcomings and the vicious circle repeats. When we use products/services, we eventually realize the shortcomings of products/services. If you feel cheated after use, consumers will lose confidence in products/services and will no longer use it. Long-term sales of companies are guaranteed through word-of-mouth effects and an increase in loyal customers only when consumers’ satisfaction with products and services is high. In order to minimize shortcomings, I think it is best to create products/services that consumers want. The stage of identifying consumers’ needs is more important than the stage of producing products/services.
I think we can overcome these limitations with design thinking. Design Thinking understands the difficulties of customers and creates products that solve them. Customer satisfaction will be high because it is a way to innovate after properly understanding the customer experience. An example of design thinking is the Oral B children’s toothbrush ‘Gripper’. Breaking the stereotype that ‘children’s hands should be small, children’s toothbrushes should be small’, the handle part is designed large and thick based on observation, and a turtle shell-shaped protrusion is inserted into the handle. If you make a product without researching consumers, you will find a product based on stereotypes, and no matter how much you persuade consumers, they will not look at it. In order to be a product that consumers find and consume, we must identify what is practically unnecessary and what is needed. I can see why design thinking is in the spotlight at home and abroad as an innovative and creative business problem-solving method.
Since the theory of behavioral economics came out in the early 2000s, there is bound to be a limit to applying it now. I think design thinking, which finds the experience that customers want through vivid field surveys, can overcome the limitations of behavioral economics. While writing this report, I realized that the most important thing in corporate management is understanding of consumers.