Can nudge theory help you embrace technology?

Have you ever brought shopping bags to the supermarket to avoid paying for plastic ones? Or purchased more from an online store because it offered free shipping over a certain amount? Well, these are examples of nudge theory – a concept that initiates behavioural change through incremental, incentivised (but often imperceptible) actions. With enough repetition, these changes stick. And according to Xero’s new One Step report, it can be a valuable tool to help small businesses embrace technology’s full potential, writes Rob Stone, Commercial Director, Xero Australia.

In a survey of more than 4,000 small businesses across six countries, the One Step study explored the behavioural barriers that influence digital decision making. It revealed that 29 per cent of Australian respondents consider themselves technology delayers (those who put off digitalisation), while just 19 per cent are active adopters of digital tools. So why – despite knowing the benefits – is there a reluctance to embrace tech’s full potential? Below, we break down the three most common mindsets holding small businesses back, and share tools related to nudge theory to help conquer these behavioural barriers.

Understanding the mindsets behind technology delayers

In the world of small business, putting off tech adoption can come at a cost to things like efficiency, time and productivity. And according to our One Step study, technology delayers often relate to three distinct mindsets:

It’s good enough: As a firm believer in the old saying, “If it ain’t broke, don’t fix it,” you’ve used the same technology for years to avoid the stress and hassle of switching.

It’s too risky: The idea of embracing new technology is daunting. What if it fails and you waste money and time?
It’s hard to choose: The rate of innovation, not to mention the numerous options out there, makes adopting new tech seem overwhelming.

Do you recognise yourself in any of these personas? If so, you’re not the only one. As a digital strategist and website designer, Melissa Willcocks helps small businesses of all sizes implement plans and tools to realise the long-term benefits of technology adoption. And more often than not, she encounters these mindsets when working with a new client.

“Initially, many small businesses don’t understand what kind of technology is available or how to use it. They think, ‘I don’t need this because my business is running fine as is.’ So when I start with a new client, we begin by looking at their business from every angle to tailor a strategy that will see them win more time back. It could be leveraging software to schedule social media posts, introducing customer service tools like an online booking system, or investing in accounting software to take care of their numbers. They often reflect after a year of working together and realise how much these little changes have helped them flourish,” she explains.

Taking small steps towards technology adoption

As Melissa notes, small steps make a meaningful difference when it comes to technology adoption. And to help you set foot on the right path, here are four easy-to-use tools:

Decision matrix: Visualise the pros and cons of different options with a weighted decision matrix. Start with what you value most in new technology for your business, and assess how each software or tool levels up.

Pre-mortem: Prevent and plan for risks with a pre-mortem. Consider a worst-case business scenario and work backwards, noting potential points of failure for your current (and alternative) technology. This can help you establish a clear idea of what risks are worth taking and those to avoid.

Cost-benefit analysis: When weighing up technology options, list down as many benefits as you can think of, and assign a time and monetary value to each (estimates are fine). This will help you rationally uncover quantitative and qualitative benefits to land on the right choice.
Q&A checklist: Spend time with technology adopters who make consistent, well-calculated tech investments. By asking questions and learning from their mindset, you’ll become more confident in your own digital decision making.

We all respond to change, risk and uncertainty in different ways. And when it comes to technology adoption, understanding our behavioural tendencies – and working to overcome what’s holding us back – leads us one step closer to benefiting from the full potential of digital tools.

Want more? Get the latest coronavirus news and updates straight to your inbox! Follow Kochie’s Business Builders on Facebook, Twitter, Instagram, and LinkedIn.

Now read this