Behavioural Economics took flight only to come crashing down with a bang.
Failure to replicate even the most basic of findings has started to raise eyebrows and questions.
I can personally attest to this. I wasn’t immune to the allure of cognitive biases and the quick and easy interventions they offer – a.k.a nudges. I fell in love with the field and its potential and immediately started testing nudges in the real world and specifically in fundraising.
The majority of the tests failed to replicate the advertised effect, or the effect was weaker than expected, Even worse, it backfired. I took full responsibility: maybe I hadn’t understood the effect well enough. Maybe I hadn’t considered the context parameters well enough. Or maybe my execution just wasn’t the right one for that audience.
I never once thought that cognitive bias –nudges–was a bogus effect to begin with. Until recently.
A more comprehensive examination of the original studies showed that some of the findings had been systematically misrepresented. And we’re not talking about findings around an obscure nudge that no one has ever heard of. We’re talking about the most famous nudge of all: loss aversion, whose authors won a Nobel Prize.
When the most widely accepted nudge is in doubt, you should really start questioning everything.
All this seems like the final nail in the coffin for Nudge theory. Is the field useless?
There are plenty of great researchers and great insights out there. And there are observable biases in human decision making. What we need is more humility combined with more thinking time. For example, the business problem – 2nd gift conversion or sustainer conversion or donation page conversion – matters, a lot. Ideas based on theory matter, a lot. And perhaps most important, human differences matter, a lot. Why do we expect the same intervention to have the same effect on everyone?
This all leads to an important distinction, behavioral science is not behavioral economics. The latter is a small subset of the former. Behavioral science isn’t parlor tricks or one-size-fits-all solutions. It’s a multi-disciplinary approach to which we must add humility and think time.
We need to accept there are no shortcuts to changing human behaviour. Maybe what sounds too-good-to-be-true is just that. Our preference towards quick and easy solutions and our tendency to avoid excessive effort has temporarily blinded us.
But now, we all know better. And here’s what I’ve known for the last 5 years in the context of fundraising:
- Most nudges – implemented in a one-size-fits-all vacuum- seem to produce inconsistent, unreliable results.
- There are deeper behavioural science insights we can rely on that better explain and predict giving e.g. your donors’ identity, their commitment to your organization, their personality.
- Fostering your donor’s volitional motivation, the one that comes from within, is key to fundraising success. You can achieve that by taking into account who your donor is (identity & personality & preferences) and by tailoring your communications to match it.
- Pressuring donors into giving only works in the short-term and it’s a very myopic fundraising strategy.
- Listening and acting upon donor feedback is a goldmine which has the potential to transform both donor-organization relationships and your overall strategy.
The problem with all this? They are not quick fixes. They take a lot of planning, work and effort. And that’s why they are so easily ignored.