Choice Architecture, a principle that psychologists have studied for decades, is the concept that describes how the presentation of information affects people\u2019s decision-making. Framing is the tone you use to present your options. How you frame the choices changes your results. These two concepts can help you present your goods or services to customers in ways that influence them to respond the way that you want and drive more value ($$$$) for your organization.
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For example, if you want to move people to subscription service on a product or service, start by rewarding those who do it.\u00a0Maybe it\u2019s a discount on the product or an extra service for subscription customers. You have given them a choice and framed it as a bonus if they agree to it.<\/p>\n
It works the other way, too, in cases where you need to get customers to stop doing something. For example, a few of my old accounts still had a paper statement come to the house. Every time I got one, I thought, \u201cI should switch to electronic statements”. Then, I forgot about it. When the company threatened to start charging me to have a paper statement, guess who logged on and made the switch?<\/p>\n
Menu Design Matters to Your Customers\u2019 Choices<\/strong><\/p>\n Framing and Choice Architecture also come into play on menus. We can guide our customer\u2019s decision-making with how we design our menus. (Now, when I say menu, many of you are picturing what you receive when you are seated at a table at a restaurant. That is one area where menu design matters, of course, but I am using the term in a broader sense.) Think of it as how you structure your offer to make it most attractive to your customers.<\/p>\n We discussed this concept in more detail on\u00a0our Intuitive Customer podcast<\/a>\u00a0when we had a special guest, Dr. Jeff Parker, PhD, the Assistant Professor of Marketing from the University of Illinois, Chicago.<\/p>\n Dr. Parker has published many research articles on the psychological principles behind menu design. One, in particular, speaks to\u00a0how customers make decisions based on the information they encounter in a menu<\/a>. The research explored whether how you categorize information on a menu leads to different choices.<\/p>\n In Dr. Parker\u2019s research, he and his research team wanted to know what happened when you grouped menu items in a certain category (note: in Dr. Parker\u2019s research, they are using the term menu to apply to a food menu).\u00a0For example, if you listed all the lower-calorie food options together, how would that affect customers\u2019 choices? Secondly, how would that compare to simply labeling the menu options with their caloric content and not group them? In both cases, the total calories would be listed next to the menu item.<\/p>\n They discovered when only calorie counts were available and the items were not grouped in a \u201clow-calorie\u201d section, people made healthier choices. However, when they grouped the low-calorie options and labeled them as ‘healthy’, people chose them less.<\/p>\n The Power of Organization<\/strong><\/p>\n So why didn\u2019t grouping the lower-calorie, healthier items inspire the customer to choose more healthy items? Dr. Parker says it was because people began their \u201cwhat-do-I-want-to-eat?\u201d decision by screening options based on their labeling. When they read the ‘healthy’ header on the lower-calorie options, they rejected them all first thing. Dr. Parker thinks it is because many people think that for the menu item to be healthy it must also mean that it doesn\u2019t taste delicious or it won\u2019t be as filling as the unhealthy options.<\/p>\n In other words, they were screening out options in the first stage based on simple criteria and \u2018healthy choices\u2019, did not make the cut.<\/p>\n Dr. Parker\u2019s research uncovers the power of organizing information to drive people\u2019s decisions. People make decisions in stages, particularly when they are sorting through numerous options. As Professor Hamilton points out in the podcast, if you ask people in a restaurant if they want to eat healthily, many (if not most of them) will say, “Not really, no”.<\/p>\n