Hidden forces drive every decision. How can you make behavioural economics your competitive business advantage?

The bank was perplexed. Its new digital self-service flow was faster, requiring fewer pages and steps to complete. Yet customers kept bailing out before they confirmed payment, often turning to the call centre instead. The bank brought in the Advanced Behavioural Economics team to help.

We studied real customers’ behaviour and discovered the process had become too streamlined. Customers balked not because they were confused, but because they were afraid of making an irreversible mistake and losing money. While the call centre took longer, customers felt having a human on the line gave them an “undo button.” So we proposed a counterintuitive intervention: add an extra step to the digital process, before transaction confirmation. This new “review and protect” page summarized the transaction in plain language, featured a prominent edit button, and reassured customers that if something looked wrong, they could cancel within minutes. We tested the redesign and found that transaction completion rose, call volumes fell, and customer confidence surged—because the digital workflow now felt reversible.

That’s behavioural economics in action.

Uncovering the hidden forces behind our decisions

Behavioural economics is the science of the hidden forces and heuristics that shape the decisions people make and the actions they take—forces such as framing effects, emotions, and choice overload. It recognizes that people (and organizations) don’t always make decisions or choices based on rational assessments and calculations.

Behavioural economics can help organizations tackle a range of growth- and service-related challenges, unlocking paths to improved sales and customer experiences. It can transform strategy development and innovation, drive efficiencies and cost savings, and even help companies improve their risk management and organizational resilience. Its insights can drive better business outcomes and the adoption of rigorous, evidence-based methods of learning, problem solving, and decision making. And its interventions can often be surprisingly subtle, gently nudging people in the desired direction.

Complete “nudge programs” enable organizations to uncover and deploy behavioural economics insights across end-to-end business processes, product development, and customer experiences.

BE FIRST with Deloitte’s Advanced Behavioural Economics team

Deloitte’s Advanced Behavioural Economics team works with organizations to introduce and embed a new way of thinking and problem solving, a way that’s rooted in the scientific method, experiment-driven, and evidence-based. Through our BE FIRST methodology (see graphic) we identify decision-making root causes, design interventions to create sustainable behavioural change, and validate impact through experimentation to provide organizations with confidence that changes will deliver meaningful results. The result? Organizational strategies and decisions shaped not by powerful personalities, historical precedent, and intuition, but by behavioural insights and experimental results.  

The BE FIRST methodology comprises three phases:

1. Behavioural Diagnostics. We first establish an understanding of the current behavioural landscape, beginning with a review of relevant academic research. Then we analyze any existing behavioural data to identify patterns, anomalies, and inflection points to generate empirically-grounded hypotheses about behavioural barriers. We conduct structured, systematic interviews with internal stakeholders in a way that minimizes bias and draws out facts, not opinions. Finally, using advanced research tools, we collect behavioural data (e.g., behavioural observations such as conjoint analysis, eye-tracking studies, or diagnostics surveys).
2. Intervention Ideation. Diagnostics complete, we generate a sequence of carefully orchestrated interventions or “nudges” designed to change behaviour cost-effectively, using a combination of expert workshopping techniques and the systematic application of behavioural frameworks. We further review academic literature to learn how similar interventions have or haven’t worked in the past, and to inspire net new interventions that haven’t been tested before. We systematically investigate counterintuitive hypotheses that violate conventional wisdom (e.g., too much choice results in fewer sales), and map proposed psychological mechanisms and moderators for each potential intervention (e.g., reducing users’ cognitive loads, harnessing the power of default choice).
3. Experimental Validation. To determine whether a designed intervention works, we test it using randomized controlled trials or other forms of experimentation in lab and field settings as appropriate. Lab settings afford the opportunity to control both the environment and the test subjects, rapidly iterate intervention variants, and understand why an intervention works and refine it before deployment in the field. Field settings, by contrast, better enable the measurement of actual behavioural outcomes and business KPIs under more naturalistic settings. Testing behaviourally informed messaging frames and choice architectures against their business-as-usual equivalents is one example of how an intervention might be tested in the field.

The Deloitte advantage

Deloitte’s global Advanced Behavioural Economics team comprises a network of PhD-trained decision scientists dedicated to bringing the scientific method to bear on organizations’ business challenges worldwide. To date, we have worked on over 300 projects with clients across the public and private sectors, in an array of contexts, cultures, and regulatory environments.

We do more than simply apply existing behavioural insights to challenges: we carry out primary research together with our clients to generate fresh insights and make new discoveries about behaviour. Our focus on experimental methods, behavioural diagnostics, and choice architecture enables us to build comprehensive nudge programs that anchor strategy to behavioural barriers, and measure impact by looking to real-world behavioural change.

Learn more

Want to learn more about how Advanced Behavioural Economics can help your organization overcome business challenges? Contact a member of our team today.