Behavioural insights case study: Increasing payment of overdue liquor licences

The behavioural challenge

Liquor Control Victoria (LCV) regulate the licensing, sale, and supply of alcohol in Victoria. One of their challenges is ensuring hospitality businesses that supply liquor are adequately licensed.

LCV asked the Behavioural Insights Unit (BIU) to apply behavioural science to the emails and letters sent out to prompt licence holders to pay their licence renewal when it is overdue.

The aim of this project was to:

• increase the number of overdue liquor licences paid by the final due date
• increase the number of liquor licence holders signed up to the LCV Liquor Portal.

What we did

BIU did a behavioural review of LCV’s emails and letters to identify places where behavioural insights messages could be added.

The new messages were designed to be trialled alongside a control (the existing LCV message):

1. The Positive message focused on the benefits of paying on time:

IMPORTANT: PAY NOW TO CONTINUE SUPPLYING LIQUOR AND AVOID FINES

2. The Consequence message included information about what would happen if the renewal was not paid (including the exact amount of the fine in the body of the message):

IMPORTANT: PAY BY 31 MARCH OR STOP SUPPLYING LIQUOR

3. The Visual + Reminder email had a picture to draw attention and highlighted the due date:

IMPORTANT: PAY BY 31 MARCH TO RENEW YOUR LIQUOR LICENCE

4. The E-license letter included information on how to pay and how to sign up to a Liquor Portal account (with a social norm about how most people have a Liquor Portal account).

These messages were posted or emailed to licensees who had not paid their licence renewal fee after the due date. Data was analysed by BIU to see whether there was a difference in the effectiveness of the messages.

What we found

Overall, the most successful message (the consequences message) led to 7.4 percentage points more recipients paying in full by the due date.

To break it down further, for the email messages:

• The Consequences email led to significantly more recipients paying in full by the due date (61.9%, compared to 54.5% of the control group).
• The Consequences email had the highest open rate with 82.2% of these emails opened (though this was only significantly different from the Visual + Reminder message).
• All treatment emails led to significantly higher click through rates to the liquor licence payment portal than the control group (57.9-58.2% of treatment participants clicked through, compared to 47.1% of control participants).
• The subject line for the Visual + Reminder message had a significantly worse click through rate, compared to the other subject lines – possibly because it contained an emoji, which licensees may have interpreted as overly casual/ untrustworthy.

For the smaller group of licensees who received a letter by post, there were no significant differences between the groups in terms of payment by the due date.

In terms of e-license sign ups, very few participants signed up during the trial period. The control letter group had the highest amount of signups (significantly higher than all the intervention groups).

What’s next?

LCV has taken the insights about consequences framing and positive message focus and applied them to later iterations of the overdue liquor licence message, and other messages. Visual elements from the behaviourally redesigned letter have also been incorporated. These behaviourally informed messages have continued to drive licence payments.

Thanks

We thank our partners the Department of Justice and Community Service, who generously gave their time and expertise.