‘Nudging’ is the runaway winner in the ‘how can I get my customers to change their behaviour?’ stakes. SMH writer Matt Wade reports that it was the Brits who first came up with the idea of creating governmental behavioural insight units aimed at improving the effectiveness of their public services. In essence, they use simple psychology when contacting clients to change their behaviour.
The NSW Government caught on pretty quickly, establishing its own unit which is generating savings in costs and efficiencies. For example, non-attendance for clinic appointments at St Vincent’s was an ongoing headache. But by changing text reminders to include phrases such as “avoid loss to the hospital or “loss to the patients at the hospital”, the no-show rate was slashed by almost 20%. With non-attendance costing the hospital $125 a pop, the $66,000 already saved has been a real tonic.
Wade reports a different trial focused on using carefully worded messages to encourage social housing tenants to pay off their rental debt, with 9.4% more tenants who received such a text doing exactly that. Similarly, trialling four different pap smear letters saw the most effective one – which used clear layout and language to emphasise testing benefits – result in a 30% screening rate increase. That’s an additional 7500 NSW women each year taking better care of their health.
So where and how should you start nudging your own clients to change their behaviour? An easy place to start is that common time waster for many small businesses – the tedious process of chasing slow-to-pay customers. Apart from being appallingly bad behaviour, clients who don’t pay on time take your focus away from doing what you should be doing – developing your business.
The logical place to start is a review of your invoices. Are yours pretty much the standard style – item numbers and totals surrounded by acres of white space? Then why not gently nudge your customers by including a positive message:
‘Thank you! Your prompt payment means we can spend more time doing what we do best: developing products that our customers love.’
‘Please pay within 21 days to ensure our good work serving our community can continue.’
‘Your timely payment is always appreciated; it’s why you’re a great customer to have.’
You get the idea.
But if nudging seems too much, a recent survey conducted by cloud accounting FreshBooks showed that a simple ‘Please pay within…’ or ‘Thank you for your business’ can increase paid invoices by more than 5%.