Ryanair gets customers to buy travel insurance!

This is a snapshot of Ryanair's website. Ryanair is an Irish low-cost airline which went public in 1997 and since then their revenue has seen a big increase. However, it seems as though Ryanair uses sneaky tactics on their website to get customers to pay for 'extra add-ons' without them realising. 

Ryanair have managed to get more customers to buy travel insurance. This is due to the choice architecture on Ryanair’s website. Choice architecture is the way in which the choices we make are influenced by the way in which the choice is designed and presented (Thaler & Sunstein, 2008). From the picture above we can see that under ‘buy travel insurance’ is a drop-down box where the default option ‘please select a country of residence’ opts in customers for travel insurance. To opt out customers have to scroll through the list of countries and select ‘no travel insurance required’. The use of a default option has a sizeable impact on what is chosen (Johnson, Steffel, & Goldstein, 2005). In this case, customers may easily not notice that they have the option to opt out and not buy travel insurance. Most customers will automatically click on the drop down box and select their country of residence therefore acquiring extra costs that they might not need. This is very clever/ (sneaky) of Ryanair and different from other opt in techniques that I have seen as most of them involve checking or unchecking boxes. Therefore, the default option on the website enables Ryanair to get a specific outcome from customers, which is to buy their travel insurance. 

Research supports the effectiveness of default options in altering the decisions people make.  Johnson, Steffel and Goldstein (2005) asked 161 respondents whether they would be donors using one of three default conditions: an opt in condition where the default was not to be a donor, an opt out condition where the default was to be a donor and the neutral condition with no prior default. The results revealed donation rates being about twice as high when opting out as when opting in. Hence showing the default had a dramatic impact on the respondents’ decisions. The researchers then went on to analyse the rate of agreement to become a donor across the European countries with different defaults (opt-in for organ donation and opt-out). The results showed (Figure 1) that the four opt-in countries (on the left) had lower consent rates than the six opt-out countries (on the right) and nearly 60 percentage points separating the two groups. This shows that default options affect the choices we make and most importantly that opt-in techniques are effective tools in getting people to pick a certain option. This a tool that many companies like Ryanair can use in order to manipulate and control the choices their customers make. 

Figure 1: Effective consent rates by country

References

Johnson, E. J., Steffel, M., & Goldstein, D. G. (2005). Making better decisions: From measuring to constructing preferences. Health Psychology, 24(4), 17-22.

Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving decisions about health, wealth, and happiness. New Haven, CT, US: Yale University Press, New Haven, CT.