Profitable Nudges: A Guide to Behavioural Economics with Sonia Friedrich | #392

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Sonia talks nudges and sludges and reveals the science behind the decisions customers make every day

Sonia is a behavioural strategist and Global Keynote Speaker. She has been called a ‘Revenue Rockstar’ and Growth Hacker. She works with Fortune 500 companies and start ups to add the edge with behavioural science for immediate impact to the bottom line. Sonia is also the Global Strategic Partner for behamics -leaders in AI + BeSci for eCommerce and on the Faculty for KPMG Upside Founders Program.

In this episode of Add To Cart, we are joined by Sonia Friedrich, Behavioural Science Strategist at Sonia Friedrich Consulting.

My guest today is here to explain how ecommerce brands can increase profitability by understanding what’s going on in customers’ brains.  Sonia Friedrich is a behavioural science strategist with a background in business marketing.  She works with academics, data scientists and tech experts to harness the power of behavioural economics for businesses and brands and works with clients such as NewsCorp, AstraZeneca, Volvo and Nespresso.  In this chat, Sonia reveals the world of nudges and sludges, she tells us how a friction audit works and she shares the website feature known as the $300 million dollar button – has your site got one?

“If this picture doesn’t load for this pair of shoes you’re selling, that just cost you $34,000 dollars today”

Sonia Friedrich

Nudges and sludges

“In the whole world of behavioural science now, there’s the conversation of nudges and sludges, you know? A sludge is something that is actually not in a human’s best interest, where you’re trying to deceive. A classic example of what we see all the time is how difficult it can be to unsubscribe from something. And, you know, Friction is actually built in, so it takes you longer to unsubscribe, so you keep paying money and just give up. 

So behavioural science and behavioural economics isn’t about that. It’s actually about how you make an easier journey for a customer because, as we all know, seven out of 10 people leave an e-commerce website. And you go, well, why are they leaving? You know, and there’s over a trillion dollars sitting in abandoned carts around the world. And you go, well, something’s going on where somebody had an intention to purchase something and they just let it go and I know I do the same. 

So how do we make that journey easier for you and apply nudges for that space?”

A change in behaviour

“We could go and buy a suit around the corner and we see a similar suit that is on sale. 

Let’s say it’s $5 off, and it’s a 15-minute car ride to get the $5 off. It costs you more time and money in petrol and your time, and you’ll drive that extra distance to get the $5 because the bargain is what has gotten you in the door. 

And then while you’re there, you buy a shirt, a tie, a pair of socks, and some shoes, and suddenly you’ve actually changed your behaviour and potentially gone to a different retailer because of a nudge, something that has gotten you and our fear of missing out on the deal, it makes us do irrational things all the time.”

5% reduction in returns 

“Where this began, and one of the ones I love the most, is actually to do, to try and avoid those product returns. And so now let’s say if you choose a size 10, 12 and 14, let’s say, there will be a pop-up which says, you know, do you realize that this is going to take you about 32 minutes at home for you to try them on and actually, you know, see which is your best size or you could just check the size chart right now and it will take you three minutes. 

There are different dynamic ones, but we have had a 5% reduction in product returns overall from these dynamic nudges. And for those businesses, again, the cost and implications of that are significant.”

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