Nudge your way to travel program success

Bowl-of-nuts-thoery-used-to-examine-corporate-travel-behavior

In 2017, the Nobel Prize for Economics was won by Richard Thaler. Thaler’s achievement? Recognizing that people are not always entirely rational, and can by pushed into different courses of action through behavioral economics, or “nudges”.

Thaler came up with the theory after observing the reaction of his dinner party guests when he took away a bowl of nuts. He was depriving them of choice, but ultimately, they were happier because they had room to eat dinner instead of filling up on the nibbles.

It works in other scenarios too.

The British tax collection agency, the HMRC, sent 100,000 taxpayers a letter which included the line “nine out of 10 people in the UK pay their tax on time”. It claims to have increased tax revenues by £210 million as a result.[1]

It’s easy to think of analogous situations in business travel where we could apply the same technique for similar benefits. For example, rather than punishing employees for going outside travel policy, why not highlight the number of people that have been compliant, and how much they saved the company as a result?

A 2012 real world study looked at how hoteliers could get guests to reuse their towels more often.[2] Guests were faced with three different signs asking them to reuse towels: the first said “Help save the environment”, the second said “Partner with us to help save the environment” while the third said, “We’re doing our part to save the environment. Can we count on you?”

The third sign was by far the most successful of the three and is an example of what is called reciprocity-by-proxy, where people feel a sense of indebtedness when someone has done something on their behalf.

You may already be using some of these techniques in your program, perhaps unknowingly using the science of nudges. If not, let’s see how this could work in a travel program.

Take advance booking. We can use management information from the travel management company to work out how much booking earlier saves the company. We can share this knowledge with a traveler trying to book too close to departure using a well-timed custom notification, and say that the traveler’s line manager has already helped save the company X dollars. It may not help with that particular trip, but could help shape future behavior.

Scarcity of something can increase something’s perceived value: a huge number of studies corroborates this.[3] This is something that many online travel agents leverage to sell leisure flights. How many can say they have not felt the sense of urgency to book faster, when they see that there are only two seats left at a low fare?

We can also use this knowledge to encourage optimal behavior in corporate travel programs. An example might be to inform travelers that only one hotel room with free breakfast and WiFi at the preferred hotel is available: hotels booked later might not have those benefits. You may already be employing some of these techniques without realizing it, but if not, it may be time to turn to the behavioral economists and start nudging your travelers.

[1] https://www.telegraph.co.uk/finance/personalfinance/tax/11147321/Five-tricks-or-nudges-HMRC-uses-to-make-you-pay-210m-extra.html

[2] Reciprocity by Proxy: A Novel Influence Strategy for Stimulating Cooperation, Noah J. Goldstein, Vladas Griskevicius, and Robert B. Cialdini

[3] Scarcity Effects on Value: A Quantitative Review of the Commodity Theory Literature, Michael Lynn, 1991