How behavioural science can help tackle homelessness

Natalia Kasnakidis' essay earned a Distinction on the IPA's Applied Behavioural Economics course.

We are spotlighting some of the best essays from our MIPA qualifying courses and qualifications. Here, Anomaly's Natalia Kasnakidis looks at how behavioural science could be used to tackle London's homelessness crisis as part of the IPA's Applied Behavioural Economics course.

Homelessness is a growing issue in London. Shelter is a charity that aims to “help millions of people every year struggling with bad housing or homelessness through advice, support and legal services”. However, with limited budget and a crowded competitor landscape, it can be challenging for charities to cut through and get the support they need.

Behavioural Economics offers a wide scope of opportunities to maximise effectiveness and efficiency for charities like Shelter.

Here we’ll explore how a particular model of Behavioural Economics, the EAST Framework, could help generate more donations by making the act of donating Easy, Attractive, Social and Timely.

1. Make it Easy

Making a desired action easier significantly impacts how likely people are to take it. There are many opportunities across Shelter’s various touchpoints to increase donations by minimising friction in the process.

Defaults

People are strongly inclined to stick with the ‘default’ or pre-selected option (The Behavioural Insights Team, 2014). Shelter could change their website’s default donation option from ‘one off’ to ‘regular’ – as regular donations are of greater value to charities, since they provide a more predictable income stream. Making regular giving the easier choice may shift more people towards choosing that option.

Foot-in-the-door technique

However regular donation is a bigger commitment, so there’s a risk that leading with this more significant ask could negatively impact donations overall. In this case, I would apply the foot-in-the door technique – keeping one-off donations as the default but implementing follow-up communications that ask for a regular commitment. People are more likely to comply with a significant ask when they have previously agreed to a smaller one, as they are driven to act consistently with past behaviours (Freedman & Fraser, 1966). This has been observed both online (Guéguen, 2002) and in fundraising (Schwarzwald, Bizman & Raz, 1983), so those who have made a one-off donation should be more receptive.

The technique also creates opportunities in social. By following Shelter, people have already made that small, initial agreement. Instagram’s new donation sticker provides an ideal opportunity to capitalise on this by making it easy for followers to donate in-app. Shelter’s donation sticker should be the first post under the ‘Highlights’ bar and clearly labelled ‘Donate!’, rather than buried behind multiple Stories where only highly engaged followers will find it.

Reducing effort

Beyond Shelter’s owned channels, there’s opportunity to partner with popular subscription services and offer regular donations as a ‘bolt-on’. Incorporating registrations into a sign-up process that someone is already completing drastically reduces the effort required and could attract a wider audience that would not otherwise consider regular giving. 

The right brands to partner with would have mass appeal and, importantly, a price-point that frames the donation ask as a relatively small, incremental figure. A £2 monthly donation seems like a much smaller ask in the context of a £50+/month phone plan than it does on a £5.99/month Netflix subscription. This highlights the next big area of opportunity for Shelter. 

2. Make it Attractive

Pricing Psychology

One way to make the act of donating more attractive is to make the cost appear smaller. Price perception is affected by how the number is displayed (Shotton, 2018) and this opens up possibilities for Shelter’s donation page that could increase donations in both volume and value.

Order effects

Currently, Shelter’s website offers a number of pre-set donation options: £10-£80 for one-off donations and £5-£20 for monthly. Whilst listing these lowest–highest is commonplace in the charity sector, studies in commercial settings have shown that consumers will often pay a higher price when items are listed in descending order (Suk, Lee & Lichtenstein, 2012). Whilst this may, in part, arise from price-quality perceptions, it may also reflect a form of anchoring that could equally benefit charities. Randomly allocating site visitors to one of two price-order conditions would reveal any impact on donation value.

Anchoring

Anchoring is where the mere exposure to a number influences subsequent numerical decisions, regardless of whether that number is relevant or not (Shotton, 2018). Shelter’s competitor, Crisis, offers maximum pre-set donation figures of £250 (one-off) and £100 (monthly) – far higher than Shelter’s respective options of £100 and £20. Whilst it’s unlikely that many people are donating these amounts, simply listing these higher figures may be nudging people towards donating larger sums. It suggests that anchoring could yield positive results within the charity sector and I would boost Shelter’s upper donation figures to test this.

Salience

Simply removing the dollar sign from menus has been shown to boost sales by 8% (Yang, Kimes & Sessarego, 2009). And, when spending with contactless, people underestimate their spend by 5% vs. a 9% overestimation for cash spend (Shotton, 2018). Both occur because they make the cost less salient.

This insight could be particularly valuable for charitable giving where there is rarely a tangible or immediate reward for parting with your money. Online, Shelter should try removing the £ sign from their pre-set donation options. For offline fundraising, contactless technology provides opportunity to make donating both easier and more attractive.

Temporal discounting

Time-based contracts can be made to appear better value simply by shortening the timeframe they relate to, as people focus more on the amount than the associated timeframe (Shotton, 2018). For Shelter, presenting regular donations as a daily or weekly cost may encourage more people to sign up, or commit to higher amounts – for example, re-framing £20 a month as £4.60 a week, or 66p a day. This principle could be applied both to the donation page and to guide messaging in ATL comms.

Charm pricing

Prices that end in a nine (e.g. £4.99) are consistently perceived as better value than rounded prices (e.g. £5), since people give undue prominence to the left-hand digit. Charm pricing is rarely if ever used in this sector, possibly due to its association with ‘value’ brands. However, it’s increasingly being adopted by popular subscription services (e.g. Netflix, Spotify, Headspace) so it would be worth designing a small-scale experiment to understand its potential for increasing donations, along with any longer-term risk to brand perception.

Distinctiveness

There are several homelessness charities vying for support, so attracting attention represents another crucial dimension of ‘Make it Attractive’. Studies consistently show that distinctive items and brands are recalled more easily than those that blend in (Shotton, 2018). Shelter currently lacks a clear brand identity and gets lost among its competitors, so I would focus on developing a simple, impactful visual identity that subverts category norms and stands out from the crowd.

homeless charities lockup.png

Reciprocity

A final, simple, way to make the act of donating more appealing is to offer some kind of immediate reward – for example, the Royal British Legion’s poppy or an equivalent for online donations that could be displayed on social platforms. Not only does this play into the human drive for reward and tendency towards reciprocal behaviour but it also makes the behaviour appear more popular, by signalling it to others.

3. Make it Social

Make the act look popular

We are social creatures and naturally inclined to behave in ways that are consistent with others. Studies by Robert Cialdini have shown how this can be leveraged to encourage certain behaviours – but also that it can reinforce problematic ones. Charities are particularly at risk of inadvertently doing this in their attempt to emphasise the need for support.

Shelter’s campaign messaging should frame the volume of donations in a positive way, communicating progress made from donations rather than the problems arising from insufficient funds.

As with the Poppy appeal, there are also many implicit opportunities for social proof within the customer journey. Shelter’s website currently features a list of ‘today’s donations’. However, this is currently static, limited to showing only five donations and appears far down the page. Instead, it should be a live, running tally showing ‘recent donations’ and positioned alongside the donation tool – emphasising popularity and making this more prominent at the point of decision-making. I would also test a second tracker of ‘highest donations’, to understand any anchoring effect this could have on the value of those donations.

This principle could also be applied at fundraising events, by ensuring there is always cash in the bucket or a running digital tally for contactless donations.

Tailoring social proof

Cialdini’s work also shows that we are most influenced by people who are like us, so social proof messaging should be tailored to specific audiences. The subscription partnership mentioned earlier provides an ideal opportunity to do this, prefacing the appeal with a message such as ‘many of our customers like to add a charitable donation’. This approach has been shown to increase both the number and value of charitable donations in wills (The Behavioural Insights Team, 2004).

The Bystander effect

Charities should be wary of the bystander effect: the counter-intuitive finding that broader appeals for help make it less likely that individuals will intervene, due to a diffusion of responsibility (Darley & Latané, 1968). So, whilst the action should appear popular, the appeal itself should be as specific as possible and create a sense that people are being asked individually.

Localised appeals could work well for ATL comms and digital, whilst personalisation could be highly effective in appropriate channels (e.g. direct marketing). These techniques have the added benefit of attracting attention, as our brains automatically pick out personally relevant information from the wealth of inputs that our subconscious is continually processing – a phenomenon known as the ‘cocktail party effect’.

4. Make it Timely

To make small budgets go further, Shelter’s marketing activity should target people at times where their behaviour is more susceptible to change:

  1. People whose ages end in a nine appear more likely to reappraise their lives, as they approach the end of a decade (Alter & Hershfield, 2014).
  2. Life events such as marriage, parenthood or retirement that disrupt existing habits (Shotton, 2018).

These groups are shown to be more open to adopting new behaviours, so could be good candidates for regular charitable giving. Targeting activity in this way should not only yield a greater conversion rate but also provides opportunities to enhance effectiveness with tailored messages of social proof.

Finally, there’s a particular time of year where people’s habitual behaviour is often disrupted: Christmas. Not only are people spending more freely than usual but they may also be more likely to reflect on their lives – and perhaps more inclined to give back, particularly to a charity that helps keep a roof over people’s heads. UK charity income trends support this, showing that more people donate in December with increased support for ‘homeless people, housing and refuge shelters’ (Charities Aid Foundation, 2017) – so this could be a good time to concentrate marketing spend.

Conclusion

The EAST framework highlights ample opportunities for Shelter to generate more donations by making the act of donating easier and more attractive, whilst leveraging the social nature of human behaviour and targeting specific moments when people may be more susceptible to influence. Many of these insights can be implemented with minimal spend and used in combination, to compound the effects and maximise ROI. However, they should be first tested individually, to identify what works and understand any potential negative impact to donations or longer-term brand-building.

Natalia Kasnakidis is an Account Director at Anomaly. This essay earned her a Distinction for the IPA's Applied Behavioural Economics course, which is next running in London in May and champions a different social cause in each city.

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Last updated 22 January 2020

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