To put this in more relatable terms, let's look at a few real-life examples. 

Remember when everyone was obsessed with step-tracking apps? I was one of those people walking in circles around my kitchen at 9:55 p.m. to hit 10,000 steps before bedtime. On the surface, it was great! People were moving more and, as a result, making strides towards their health goals. Unfortunately, for some, the step trackers or calorie trackers led them to focus more on the numbers flashing on their screens and less on the health benefits behind those numbers, leading to a fixation that made them feel stressed or guilty when they couldn’t hit their daily targets.

Something similar can happen with loyalty programs. A friend of mine and I recently had a conversation about a coffee shop we both like. She told me she had to delete the coffee shop’s app because the reward points she was getting from buying coffee made her a bit too competitive. She started going to the coffee shop just to earn reward points, almost like an addiction. She quickly realized that she was raising her expenses for the sake of rewards. Goodbye, app.

These examples show how well-intentioned incentives can sometimes lead to behaviors that aren’t quite in line with our real goals. 

Contrast this with a habit-changing app I recently tried called Habinator. While I used to be good at having 10,000-step days, now I struggle to take half as many. This app combines habit tracking with motivational techniques (e.g., progress visualization and goal chunking) to help you change habits and build new ones. 

When working toward my 10,000 steps goal, the app helps me reflect on the meaningful impact this habit has on my life. It also helps me recognize how small, everyday actions can add up—even when it's unrelated to my goal of walking a specific number of steps. Most importantly, it’s taught me that setbacks aren’t failures but a natural part of building new habits. In this context, the app’s nudges feel genuinely supportive, reinforcing my goals and helping me feel both empowered and in control of my progress.

How about car insurance companies that offer discounts for safer driving, tracked via an app? Or health insurance companies that offer discounts for workouts? Yes, I hear you; this is starting to sound a bit Big Brother-ish, but if it means safer roads and healthier bodies, maybe it’s worth finding an appropriate balance. At least they aren’t asking me to set a goal to drive recklessly or have a sedentary lifestyle to earn points, right?

So, what’s the challenge for organizations, credit card or otherwise, today? It’s about walking the fine line between motivation and manipulation. The key challenge is to use behavioral insights in a way that fosters genuine, ethical engagement without nudging people into behaviors that may not be in their best interest. But how do we distinguish between a helpful nudge and a push in the wrong direction? Well, it’s all in the details. 

How Small Changes Can Make a Big Difference

When it comes to my credit card company, there are at least two concrete things that they can do to navigate consumer engagement more ethically. The great thing is that they can do this while also improving their position by differentiating themselves from other companies and making their customers (including myself!) feel like we are not just another number in their “profit” column, ultimately building a more positive and sustainable client-provider relationship.

Redefine Success Metrics

One thing that the credit card company can do is to shift its focus from short-term gains (e.g., increasing spending) and redefine what success looks like. They may need to consider other metrics that will help them prioritize customer well-being and long-term engagement. 

For example, they can focus on the percentage of customers who successfully meet their savings goals or reduce their debt over time. This approach not only helps position them as a customer advocate but also aligns with growing consumer expectations for responsible corporate behavior. Additionally, it can help them foster trust and retain customers for longer periods of time, ultimately saving them money.

Design for Positive Impact

The credit card company can also use behavioral science to design interventions that create positive impacts. For instance, rather than setting a spending target, they can create a campaign that encourages customers to manage their spending within a budget, offering rewards for responsible use or meeting personal financial goals like saving or debt reduction. 

While it might seem counterintuitive to say that encouraging their customers to save might help a credit card company (after all, they make money from customer spending, right?), there are actually ways in which focusing on this might help the credit card company’s bottom line. First of all, customers who have savings may be less likely to fall into debt or may be better able to manage debt, which is financially beneficial for the bank (e.g., not defaulting on a debt payment, which saves the bank the associated costs). Additionally, those who are encouraged to save might also become more engaged with other products or services offered by the bank (e.g.,  investment accounts or savings plans), increasing cross-selling opportunities for the bank. Finally, focusing on helping customers achieve financial stability can foster greater loyalty and retention.

Another useful tool is goal-setting, a powerful method in motivating behavior without tying it to consumer spending. Instead of encouraging me to set a spending goal, they could reward me for making my payment sooner. This not only helps customers like myself achieve better financial outcomes, but it also builds long-term loyalty by aligning the company’s interests with mine, all the while helping their bottom line.

The key is to design engagement strategies that support customer well-being, not just drive profits.

If you’ve been following along, you’ve probably noticed by now that companies don’t have to choose between making a profit and doing right by their customers—the two can (and should) go hand in hand. Sure, the occasional sneaky tactic might drive short-term gains, but acting ethically isn’t just the right thing to do—it’s also a smart long-term business strategy.

Learning from Other Brands

Some companies are already using behavioral science in ways that genuinely benefit their customers. For instance, apps like Money Guided and Kamina have integrated behavioral insights to help users build healthier financial habits. 

Money Guided nudges users to reflect on their spending habits and set realistic financial goals, like saving for emergencies or planning for big purchases. Meanwhile, Kamina uses gamified elements to engage users in learning about financial literacy, offering rewards for completing educational modules that teach smart money management skills.

These approaches create a sense of partnership, fostering trust and aligning company success with users’ financial well-being. By emphasizing education and self-improvement, rather than promoting spending for the sake of spending, these apps build stronger relationships with their customers and contribute to long-term positive outcomes.

By aligning their strategies with consumer well-being, these companies build a reputation for ethical engagement that strengthens their brand over time. When customers trust a brand, they’re more likely to stay loyal, engage deeply, and even go that extra mile to support the company’s values.

So where does that leave us? I think it’s time to start rethinking how we use behavioral science in consumer engagement. Instead of using it to nudge people into buying or spending more, let’s use it to help people make better choices that align with their own goals and values.

It’s time for organizations to rethink their engagement strategies and ensure they align with the best interests of their customers. As consumer awareness grows, so does the demand for transparency, authenticity, and ethical behavior.

Ask yourself: is your organization using behavioral science to help or to exploit? Are you driving behaviors that are genuinely beneficial for your customers, or are you nudging them toward choices that may cause harm in the long run? The difference between these approaches is not just about ethics—it’s about long-term success for both your customer and you!

Imagine a world where your bank nudges you to save for a rainy day, your favorite Italian restaurant rewards you for choosing the veggie option once in a while, and your fitness app encourages you to prioritize mental health as much as physical movement.

At the end of the day, it’s about building relationships, not just transactions. Companies that genuinely empower their customers—rather than pushing them toward spending more—earn something far more valuable than short-term sales: trust. And trust, unlike promotional rewards, doesn’t expire at the end of the month.