At the end of May, congress passed the Credit Card Accountability, Responsibility, and Disclosure Act. The act bans specific practices of the credit card industry and requires more disclosure and transparency. For example, a credit card bill must now display, alongside your minimum payment amount, how long it will take to pay off your current debt if you only make the minimum monthly payment.

The theory behind structuring your bill this way is that it will change your payment behavior. When you see that paying $18 per month will take you 5 years to pay off your balance, and you'll end up paying it 20 times over, you will likely increase your payment amount.

Structuring choices to guide behavior is an idea that has also caught the attention of President Obama. His budget proposal includes an automatic IRA plan. Employers are required to offer 401k or IRA plans and to automatically enroll all employees. In order to stop contributing, employees must opt out of the plan. As a result, the expectation is that more people will stay in the plan and save more money for their retirement.

These are examples of a new field of study called behavioral economics. Economic trends are believed to be driven by rational decisions and forces. Behavioral economics breaks this down further, theorizing that there are other human or psychological forces influencing consumers' economic decision-making behavior. But structuring opt-in choices to influence user behavior extends well beyond the field of economics.

Organ Donation & Opt-In Behavior

One of the field’s most famous proponents, Dan Ariely, pulled his marquee example of this phenomenon from DMV questionnaires. He pointed out that in a study by Johnson and Goldstein, the rate at which people opted to donate their organs in different countries centered around two poles. In some countries the rate hovered around 80%, while in other countries it was around 20%, and there was no in between. It might seem obvious to want to attribute this to some kind of cultural difference. But countries thought to be culturally similar (like Sweden and Denmark) showed widely different behavior (85.9% and 4.25% respectively).

As it turns out, what accounted for the difference was the way the question is structured on the registration form. In countries with high organ donation rates, people are opted in by default and must check a box to opt out of donating. In countries with low organ donation rates people must check a box to donate their organs. The Netherlands was an example of a country with an opt-in program and an unusually high organ donation rate of 27.5%. This is due to a large and expensive campaign to drive organ donation in the country. But overall, this study clearly demonstrates that the structure of the question has a definite impact on people's behavior.

Source: Johnson, E. & Goldstein, D. (2003, November 21). Medicine: Do Defaults Save Lives? Science Magazine, 302 (5649), 1338-1339. 

So are people really that gullible? Or are the forms using psychological trickery? No, the questions on the forms are clear, transparent and simple. The truth is people are being forced to make an extremely complicated decision, one that they don’t really want to make. So by phrasing the question in different ways we are, in part, making the decision for them.

Email Marketing & Opt-In Behavior

It’s easy to see how this could tie into your own email marketing program. Whether you use an opt-out, opt-in or double opt-in permission method could have a similar impact on how people respond to your messages. Granted, you’re not asking such a profound question involving deep reflection on the afterlife. Usually it’s a simple matter of whether to accept marketing messages, such as subscribing to an e-newsletter.

The obvious similarity here is that implementing an opt-out permission method will result in a larger list but one of lesser quality, because those who don’t want to decide will just stay on the list. The inverse is true of an opt-in or double opt-in method--those who don’t want to decide will just stay off the list. That is nothing new. But the danger of having a larger but lower quality list is that those who aren’t happy will eventually unsubscribe or complain, creating drag on your deliverability.

So what is making it difficult for some to decide? Whatever the reason, you can certainly make it easier for them by providing an abundance of information about what it is they are opting into. As they are opting in, give them:

a. The value proposition--what’s in it for them?

b. The precise frequency of your communications and options for opting in or out of different frequencies.

c. The content they can expect to receive with samples, and if possible options for opting in or out of different types of content.

Providing such contextual information and different options for opting in has a direct positive impact on the size of your email list. By providing more options you are widening your net to capture more subscribers. Maybe if people know they will only hear from you once per month they will feel more confident about opting in. Or, if they can choose to receive only 'building tips' and not 'lumber discounts', they will actually join instead of opting out altogether.

Re-engagement & Opt-In Behavior

Nowhere do these ideas ring more true than if you are doing a re-engagement or re-confirmation campaign. Not only is it important how you contextualize the choices you give, but it’s also important to think about what choices you will give.

Ariely conducted a study of the subscription process of The Economist. He gave his students two different forms (see illustrations below), asking them to choose between 2 or 3 options:

(a) online only for $59
(b) print only for $125
(c) print and online for $125

It seems idiotic to include option (b), but when it was on the form more people (84%) chose option (c). And when "print only for $125" wasn't an option, more people (68%) chose option (a). In the latter case, only 32% chose "print and online for $125". It’s clear that even though no one chose option (b) on the first form, it did influence people's decisions to choose the print and online offer.

Source: Ariely, D. (2009, May). Dan Ariely asks, Are we in control of our own decisions? TED.com, (video). 

This same phenomenon has been observed in re-confirmation campaigns. For instance, if you ask, "do you want to continue to be a member?", and include a ‘yes’ and a ‘no’ response (versus only a ‘yes’ or ‘click to confirm’) more people will respond ‘yes’. Not only that, but you’ll have more data about your members, which you can use to segment your list. You’ll have a 'yes' group, a 'no' group, and a 'don’t know' group, each of which you can target and communicate with in different ways.

The big takeaway here is that how we build our email marketing processes and opt-in forms has an influence on how choices are made. As always, transparency and options are key. But we should also always be closely examining our data, gathering as much data as possible, and questioning even rational behavior.

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About the Author

Laura Villevieille is a senior deliverability strategic consultant at Lyris.

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