Categories
Climate Crisis

Caution ⚠️ – Green nudges can backfire!

40% of ecommerce customers increase their return shipments when informed about the negative environmental consequences of product returns! 

This is what a team from the Universities of Frankfurt and Mannheim showed in a large-scale, randomized field experiment (published here by Marketing Science, a top peer-reviewed journal). This study really stands out due to its sample size (> 100k consumers!).

That ‘s the bad news (for a summary of nudges backfiring, check out this overview). But there is also good news:

  • 👍 The dual green nudge (example in the graph below) did not affect conversion rates and overall sales negatively. 
  • 👍 The researchers were able to effectively target the green nudges to the consumers most likely to react positively, using causal machine learning. 
  •  👍 Green nudging “seems to be particularly effective for consumers who would otherwise return at an above-average level”, as the authors put it.

Also, as the authors point out, the consumers where the nudges backfires may not be anti-sustainability monsters, but simply customers that are unintentionally reminded by the nudge that returns are possible. 

So, what’s the takeaway? If you’re going to nudge, nudge wisely! This study is a good reminder that not all green nudges are created equal—some might just nudge customers straight to the return label. But with a little finesse and some causal machine learning magic, you can turn those nudges into a win-win: happy customers and a happier planet. Let’s keep it green, but also keep it smart. 🌍✌️

Categories
Online fundraising

My first lesson in online fundraising

Some charities give potential donors lots of flexibility when donating online (see below for example 1 by Wikimedia). After all, people love flexibility, right? Then why would anyone limit donors’ choices, e.g., by pre-filling the online donation form like Unicef does it with a very structured form (see example 2 below)? Ideally, you would give donors maximum flexibility by leaving everything up to the donor, as GoFundMe does it (see example 3), right?

Well, I used to think the same way, because consumers would tell us in focus groups and interviews how much they value freedom and flexibility. 

However, when we would actually test both alternatives separately (i.e., one group of consumers would only see a very flexible choice and another group of consumers would only see a very structured choice), in every single case, more consumers would choose the structured choice

Initially, our clients and we were so shocked by these counterintuitive results that we invested in a brain scan study to find out what secret thoughts drove consumers’ choice. As we have described in an article on LinkedIn, structured choice (what we often call “bundled portfolios”) clearly outperforms the “build-it-yourself” or flexible choice in terms of mental “attention” required. “Attention” is mentally demanding and leads to choice stress, which ultimately lowers the attraction to buy. 

How much lower? Well, since this issue came up in many of my projects as a management consultant for leading telecommunication and insurance firms, banks, utilities, etc. I was able to test this about ten times. The results: By deploying a flexible choice for consumers, you leave between 40% and 80% of revenue on the table as opposed to a structured choice. Those tests were conducted in the context of commercial subscription products (something I shared on LinkedIn here). 

Does this apply to online donations? Initial evidence says yes: A/B pre-tests with online donations I have conducted suggest very similar outcomes!

For now, let’s note my first cardinal rule for online donations:

Do not give donors too much choice in the donation form (even if they tell you that they want that choice).

Stay tuned for more rules to come…