By Michael Blanding, December 2011
Published Dec 01, 2011
Earlier this year, Michigan grocery-store owner Tim Harding T'95 read about a recent study by Punam Anand Keller, Charles Henry Jones Third Century Professor of Management. The research presented a concept Keller calls "enhanced active choice," which rethinks the way businesses present choices to employees or customers to sign up for programs offering benefits such as wellness screenings or retirement savings.
Ordinarily, a company will offer a paragraph of information describing why participants should subscribe to the program, and then include a "yes" or "no" box, sometimes opting them in or out by default depending on the desired outcome. Keller has found, however, that by including information about the implications of each choice next to the check box itself rather than in the introduction, an employer can increase sign-up rates dramatically.
After learning more about Keller's research, Harding decided to try the technique on an employee health assessment that his family-run chain of grocery stores offered employees. For several years, the vice president of Kalamazoo, Mich.,–based Harding's Friendly Markets had offered the program as a way to both improve employee health and cut health insurance costs for the company. After a major effort, the company was able to improve participation rates from 61 to 81 percent, but still fell short of its goal of 90 percent participation. "We did two years of putting financial incentives in place, but after our rampedup effort, the goal seemed unreachable," says Harding. "For this application, Punam's approach seemed spot on."
Creating a new sign-up sheet, Harding included two choices: The first said, "Yes, I will take the assessment, receive a $25 gift card, have my medical coverage contribution waived for one week, talk with a Bronson Hospital medical professional, and better understand my personal health." The second, said, in part, "No, I do not want to take the assessment and receive a $25 gift card and have my medical coverage contribution waived for one week and talk with a medical professional and better understand my personal health." Just by changing the way the question was asked, Harding was able to increase participation to 116 out of 127 employees—a rate of 91 percent. "It worked almost like you'd draw it out on a chalkboard," he enthuses. "I know that in a couple of cases, people didn't really financially understand what they could get, but when they were able to see it in a different format, they were like, 'Oh yeah, I can do that.'"
Keller says she was impressed by the way Harding implemented her research, which he did on his own without contacting her first. "I think it's great. He read it, thought about how he might use it, and found a perfect context," she says. "He could have been satisfied with what he had, but he didn't abandon his goal." An email he sent her about the successful application is one of several she has received since the research was disseminated. "I really believe the best ideas are really, really simple and should be totally generalizable," she says. "As long as an idea is really successful in terms of return on investment, I know it will market itself."