Rotman Management — Spring 2017

136 / Rotman Management Spring 2017

That’s great; but the downside is, almost half of them

(48 per cent) are saving just three per cent; and, another 27

per cent are saving four to five per cent. Only 16 per cent had

a savings rate of six per cent or more. To put this in context, if

you ask a financial counsellor how much you should save for

retirement, most of them will say 15 per cent, at a minimum

— and many will say 18 or 20 per cent.

This is the dark side of nudging: You might be nudging

people to do the right thing, but you might not be nudging

them far enough to get them to the desired long-term out-

come. Essentially, if this continues, we will have a bunch of

people who think they are saving enough money for their

future; and, when the time comes, they will only have saved

about one-third of what they require — maybe even less.

Describe how the broader field of Motivational Psychol-

ogy differs from nudge marketing.

Nudging implicitly assumes that without the nudge, the

person is going to do the ‘wrong’ thing. In contrast, Moti-

vational psychology focuses on creating a lifestyle where

the consumer is empowered, can think for herself and is

supported to set the right goals — and more importantly, to

strive towards those goals. That is obviously much more dif-

ficult than just getting someone to do something one time.

If, as you indicate, nudges rely on a one-dimensional

model of consumer behaviour, what does a better model

look like?

Let me be very clear: I’m not saying that nudges are a waste

of time, by any means. What I’m saying is, they should be

part of a broader solution; they can’t be the majority of the

solution.

Let’s return to the realm of saving money. If I really

want to have enough money saved for my retirement and

to have a sustainable lifestyle, no one single thing is going

to get me there: I not only have to contribute on a regular

basis, but I have to manage my buying habits properly; I

have to adequately use the things I already have and have

a proper budgeting procedure in place. I have to do a lot of

different things.

If you think about this in Motivational Psychology

terms, you suddenly realize that problems like this have

complex solutions, and we have to think about all the dif-

ferent things that can lead consumers to save money. One

really good thing about Behavioural Economics research

programs is that they provide a very clearly-defined para-

digm of measurement. In most cases, there is one particular

action that is being measured. With Motivational Psychol-

ogy, I can’t really design one large experiment to measure

lifestyle changes, because there are so many different

things going on — and the outcome will only be revealed in

the future. However, what I can do is give the consumer the

tools and support that they need — and then let them take

charge. If someone isn’t interested in saving money, no mat-

ter how often you nudge them, they’re not going to want to

save money. They have to decide for themselves that, ‘this

is important to me’. That is the core idea behind the Motiva-

tional Psychology approach to changing behaviour.

In other research, you found that many leading brands

today behave like ‘organized religions’. How so?

Every religion has three core components: A set of values

and beliefs; a set of rituals or practices; and a community.

The practice of traditional religion has been on the decline

for decades, with fewer and fewer people participating in

organized religion. The question is, what are people doing

instead? What is the substitute?

I have found that brands are coming in and taking over

this empty space in people’s lives — and that’s not necessari-

ly a bad thing. There are lots of positive things about being in

If someone is not interested in saving money, no matter how

often you nudge them, they won’t want to save money.