Silent Decision-Makers: How Defaults Guide Decisions

Are you enrolled in a retirement plan, 401k or pension? If your answer is “no” you might want to check again. It’s possible your company enrolled you automatically. 

Why?

Because when employers automatically enroll employees, participation in retirement plans by nearly 40%.

It’s down to a powerful behavioral science mechanic called defaults.

What is the Default Effect and how does it work?

Defaults are pre-set choices that take effect if a customer does nothing. Studies have shown that people rarely change the default settings. Microsoft found that 95% of people kept all default settings, even for critical features like autosave.

When it comes to thinking, people are lazy. Defaults provide a mental shortcut and signal what we’re “supposed” to do in a given situation. Since defaults don’t require people to make any effort, they can be a simple but powerful design tool.

For example, Amazon’s default purchase option is “Subscribe & Save”. It’s always pre-selected in the checkout area. If the user does nothing and checks out, they'll get a monthly subscription for paper towels instead of one shipment of an 8-pack.

6 Types of Defaults

Although the concept of defaults is easy to grasp, applying them can be more complicated. There are six types of defaults to consider when designing your customer experience.

1. Mass Defaults

Mass defaults apply to all customers, without customizing for individual features or preferences. A common example would be an online checkout process that autoselects “2-day shipping” for every customer.

This might a more expensive option for the customer, but it’s pre-selected because the company knows most people won’t change it.

2. Benign defaults

Benign defaults are a brand’s best guess about what a customer wants. The authors give an example of benign defaults:

“For example, the shoulder straps on Maxi-Cosi car seats can be threaded through either of two sets of holes, a lower set for newborns or a higher one for older children.

Which setting should be the default?

Using the higher strap setting could endanger a newborn, as the straps won’t hold her securely. Yet the lower one would be uncomfortable for an older child. Here the benign default is obvious. Most customers purchase this type of car seat for newborns.”

3. Hidden options

In this case, the default is presented as the only choice, even though there are alternatives. These “hidden options” are available, but often hard to find.

4. Smart defaults

These defaults are based on customer data, either at a personal level or as a part of a customer segment. Often these are designed with geographic or demographic information.

For example, if you’ve filled out a profile for an investment site, and the system knows you’re a 22-year-old who makes $19,000 a year. In this case, they can present you with a different set of default options than a 55-year-old partner in a law firm making six figures.

5. Persistent defaults

Persistent defaults use a customer’s past choices to dictate their future defaults. For example, if you always choose a window seat on an airplane, an airline might automatically assign you a window seat.

6. Adaptive defaults

Adaptive defaults update themselves in real-time, acting as advisors to help people find a perfect set of features.

For example, when shopping for a car online, users could be asked if they’d like a sports, comfort, or economy-associated option. As the customer chooses options, the rest of the options change based on the information they’re sharing in real-time.

The Default Effect in the Real World

The most cited example of the impact of defaults is in the area of organ donation rates. In countries where citizens are automatically opted-in to an organ donation program, most people are organ donors. But in those countries where people are asked to opt-in to organ donation, fewer people join.

For example, in France, an opt-out country, 99.98% of people are organ donors. In Germany, where people must actively opt-in to donate, only 12% of people are organ donors.

How the Default Effect Can Change How People View You

In a 2012 study, researchers found that the presence of a default can change what we think of a person who opts out.

For example, consider someone whose state has an opt-in organ donation policy. This person then chooses not to become an organ donor. In this situation, observers perceived the non-donor to be a morally “bad” person.

Under an opt-out policy, people who asked to be removed from the donor program were perceived as having even worse morals than those who didn’t opt-in.

The research team saw this social pressure affecting people’s behavior in real-time. In the study, when subjects were watched by other people while making their choice, they were more likely to become an organ donor.

The Bottom Line

The default effect is one of the most powerful principles in behavioral science. We have to be thoughtful about what default choices we include. Set the default options to the path you want users to take. Most customers won’t hunt for hidden options, read the owner’s manual, or make considered choices.

As Charles Arthur wrote in his article “Why the default settings on your device should be right the first time”:

“95% of users don’t change a damn thing.
…if you think that most people are going to voluntarily download and install a different web browser for their new phone, or download a different app to do email from the one that came on their computer, you’re dreaming.”