By Dan Monheit, Co-Founder & Strategy Director - 05.05.2016
We suck at making choices and we don’t even know it. Every day we underestimate, overpay and make decisions that, even at the time, we know we’ll regret.
Sure, we’d like to think of ourselves as logical, rational beings. We live in an age where we’ve got fingertip access to all the information we could ever need to make accurate assessments and perfectly informed choices. But we don’t. Time and again we choose hot chips over chiseled abs, the next episode of House of Cards over a decent night’s sleep, and new shoes today over a comfortable retirement tomorrow.
Despite our best intentions, we’re only human, and part and parcel of that is being subject to a series of little glitches (or ‘heuristics’ for those in the biz) that shape the way we process information and ultimately, the way we make decisions. Most of these glitches happen without any conscious thought. They’re automatic shortcuts, designed to help our brains cope with the infinite number of choices we need to make on any given day. And while helpful for the most part, they do bring some unintended consequences, or trade offs. At the top of this list, is the fact that many of the decisions these glitches guide us towards actually make no sense at all.
Consider organ and tissue donation rates in Australia. More than nine in ten of us will be taking our organs and tissue with us when we die. This is despite a shared common knowledge that they could be used to keep a bunch of other people alive if we so let them.
Our sub 10% donation rate doesn’t just sound bad, it really is bad. In fact, by global standards it’s horrendous. Consider our counterparts in places like Austria, Belgium, France, Hungary, Poland and Portugal, all of which have organ donation rates of 98% or higher. That’s right, between 98 and 100% of eligible people in these countries do donate their organs and tissue when they die.
It would be easy to conclude that we’re an island filled with selfish, insensitive assholes; but thankfully, the polls suggest otherwise. More than 75% of us do have a preference for donating our organs and tissue when we die. The problem, you see, is not with the people. The problem is with a faulty process that exploits one of our decision making glitches; our default bias.
In Austria, Belgium, France, Hungary, Poland and Portugal, as soon as you get your driver’s license you’re a donor, unless you specifically decide to opt out. In these countries, donating is the default. In Australia, as we know, it’s the other way around — the default says you’re out, unless you specifically decide to opt in. This tiny difference has created a tremendous, tragic gap — 9% donation rate, not 99% — between the intentions that we have and the outcomes we eventually create.
And herein lies the power of default options, which, like it or not, dramatically shape the way we make decisions. They provide a nudge, or a guiding hand towards the recommended, or at least the easiest choice.
If default options can have an impact this big on how we make choices around something as serious as saving lives, imagine how easily default options sway our actions when we’re choosing things as trivial as hors d’oeuvres, credit cards and shipping options.
McDonald’s knows it. Walk into any store around the world and order ‘a Big Mac meal’. Even the newest employee on the block will have been trained to ask if you ‘meant a large’.
Google knows it. That’s why they’ve paid Mozilla and AOL hundreds of millions of dollars over the years to become the default search engine for anyone using those browsers.
Every SAAS company, from Xero to Adobe to Hubspot knows it. Jump straight to the ‘pricing’ page on any of their websites and you’ll be drawn to a ‘recommended’ or ‘popular’ option.
‘Defaults’ are so powerful because we’re lazy, and busy. We make thousands of choices a day, and it’s exhausting. Default options give us a little respite, a little shortcut. And because of that, we tend to choose whatever is set as the ‘default’, ‘recommended’, ‘popular’ or ‘trending’ choice, way more often than we rationally, objectively should.
Knowing how effective default options are, we’d be crazy not to look for a preferable one wherever we’re asking customers to make a decision, be that a suggested time for an appointment, a method of payment for our services or a specific wine that matches the mains.