Nudging your customers.

The tipping point for behavioural marketing

I was delighted to be asked recently by the organisers of Hotelympia, to host one of the stages at their annual trade show in London. And thus, last week, I found myself interviewing a series of entrepreneurs in front of a wonderfully engaged audience of hospitality professionals and investors.

I’ll share more of the insights in future Drake Escape videos, but one in particular sparked some thoughts that I’d like to air now. It was my first interview of the day, and it was with Adam Castleton, co-founder of a business that works with hotels, pubs, restaurants and retailers on in-store music and visuals.

He shared some great insights, like how increasing the music tempo during a meal encourages people to eat faster, while lowering it makes queuing feel less onerous; how store cameras can see someone walking towards a display of entertainment equipment, fade down the music in that zone, and fade up the speakers themselves, giving the shopper direct control over the sound; how facial recognition could measure the mood in a busy bar and learn which music at what volume will create the atmosphere you want; how mobiles and apps logging in to a hotel’s wifi could recognise customers and use their social profile data to personalise the music and electronic signage as they walk through the building.

This subtle combination can help them feel happier and more relaxed, can provide a more memorable experience, and can gently “nudge” them towards different behaviours, with measurable commercial results.

“That sounds incredibly futuristic” I said, “How long do you think before we start to see these things in real life?”

“We’re already doing it.” He replied, and in confidence, told me where.

Richard Thaler and Cass Sunstein first popularised the concept of the behavioural “nudge” in their eponymous book in 2008 and, while its ideas have spawned several policy think-tanks and trials, its main impact so far appears to have been restricted to the most hotly fought and publicly contentious areas of politics: electioneering through social media – viz. Cambridge Analytica et al.

Lobbyists, politicians, election specialists and some governments, have all recognised three hugely important developments: massive online personal data; machine learning technology; and behavioural economics theory; and are bringing them together to try to influence and shape how people act, and indeed, how people think. But so far, most commercial brands and businesses have steered clear, either because they don’t understand the scale of the impact these techniques can have, or they’re concerned with the ethical implications, and maybe rightly so.

The fact remains however, that personal data is becoming increasingly ubiquitous, detailed and accessible; AI technology is becoming faster, better and more affordable; and behavioural science is becoming more relevant, robust and commercially valuable every day. We are rapidly approaching a tipping point where consumer-facing businesses, and the suppliers and partners who serve them, will need to make big decisions, and potentially big investments in personalised nudge-based marketing and customer experience strategies. My personal guess is that they will become mainstream within the next two years, and almost mandatory for thriving businesses within three to five, whether we’re ready or not with legislation and ethical policies.

So, if this is a topic that your senior team have yet to seriously discuss, let me gently nudge you put it on the agenda fairly soon.