Nudge, Sludge and Fudge
Three techniques used to manipulate people to increase profits and reduce costs, and some notes on how you can use it ethically.
The first two, Nudge and Sludge are based on Choice Architecture, a discipline originally described by Richard Thaler and Cass Sunstein in their book Nudge: Improving Decisions about Health, Wealth, and Happiness. This is a mechanism for designing environments and processes to get to people to behave in a specific way. The third is more complex and much older.
Think bright yellow buttons creating a visual and tactile line down a platform. Aside from the value to sight impaired commuters, it also “nudges” all users to stand away from the edge of the platform. It also makes people aware of the floor, reducing the incidents of accidents and falls from slipping. Or a fly painted on the wall of a urinal, guiding users to aim better, and not spill or splash.
One famous example is where some countries set the law so that citizens are automatically enrolled as organ donors, and need to actively opt out to not have their organs on a donor list. The idea behind a nudge is to make it the path of least resistance, the easy option. We do it because its simpler than the alternatives.
Ethical: Making a safer choice easier. Unethical: Candy, toys at checkout for pester purchases
Sludge on the other hand is the opposite. Making something difficult or painful to guide people away from that action. Think of small spikes on railings to deter skateboarders, or deliberately uncomfortable public seating to reduce loitering.
Removing or burying contact numbers in hard to find places, making calling tedious with long wait times and untrained operators. Long winded repeated on-hold messages pushing you back to the website.
Ethical: Traffic calming measures. Unethical: Hiding poor business practices behind layers of deceit.
Fudge is where the details are changed of obfuscated to appear like one thing but is actually another.
Think about shrinkflation, the removal of 2 biscuits from the package to improve the volume to dollar ratio and thus the margin.
Or the use of your own behavior against you where you are in the habit of checking the price of a 1kg block of cheese to buy it at the lowest price, only to find at home (after how many purchase?) the 750gm block has been cut to a similar shape and replaced the 1kg. The price seems cheaper than usual, and you think you got a bargain until some math tells you the opposite is true. Or the product packaged in prime number portions so you can’t divide them across your family. Later the 1kg block is reintroduced as “Jumbo” or the prime number packaging changed to non-prime number portions and called “Family pack”.
Ethical: 10% tolerance in speeding fines. Unethical: Any time you use it for stealing.
At Triatin we can help you with Augmented BI to define and implement ethical choice architecture. Helping reduce the decision requirements of your team reduces decision fatigue and results in more optimal outcomes, while also guiding them away from “quick win” scenarios that put your companies ethics into question. For us decision support is not just about converting data to meaning, it is also about ensuring the best perspective as aligned with your corporate strategy and risk profiles. Call us to hear more about a highly competitive, low risk way to better understand your data. It’s what we do.