How would you feel if you opened your energy bill and there was a smiley face next to your usage? Or you found yourself being compared to your neighbour? Would this influence you to use less energy?
The way our energy bills look are about to change in subtle, but important ways, with an American company Opower, about to start work in Australia with a major energy retailer.
Communicating to customers through SMS and energy bills, Opower - which describes itself as a “new customer engagement platform for the utility industry”- uses psychology and persuasion techniques to influence customers to reduce their energy consumption.
Consumers will no doubt have already noticed the steady increase in the size of their bills, due mostly to the cost of infrastructure to cater for peak demand.
In a bid to encourage consumers to use less energy (which will also lead to less spending on infrastructure), energy companies are turning to the content of energy bills themselves.
Psychology behind saving
A key tactic used by companies like Opower is what psychologists call “descriptive norms”.
Put simply, descriptive norms are what others are doing in a given situation. Descriptive norms can be very powerful at influencing behaviour because people generally want to be “normal” and do what the majority of people are doing in given situations.
Although the power of descriptive norms has been known for a long time, via social psychologist Solomon Asch’s conformity experiments and applications of early candid camera videos, their use for public good is only now becoming an increasingly popular tool for influencing behaviour.
Some of the best examples of the effective use of descriptive norms can be seen in experiments conducted by the UK’s Behavioural Insights Team in the fields of health, energy and tax.
In one application alone, the UK government raised an additional £200 million by simply rephrasing tax statements. How? By changing the wording of letters chasing unpaid tax to state that “94% of tax payers pay their tax on time”, which emphasises that paying tax and doing so on time is normal for the vast majority.
Changing behaviour
This simple change led to an increase in repayment rates from 50% to 85%, raised £200 million and saved the government a lot of time chasing people.
Another great example comes from UK researcher Steve Martin, who used minor editorial changes to signs at a medical clinic to encourage people to turn up to their appointments.
Instead of listing the number of people who have failed to turn up to their appointments and the amount of money it’s costing the government, the researchers put up a sign that stated how many people DO attend their appointment (95%). The result? An 18% decrease in no shows at the medical clinic.
So what about energy? In 2007, Wesley Schultz and others published a study focused on the power of descriptive norms in energy use, which showed some positive and not-so-positive results.
Keeping up with the neighbours
The authors of this study found that by telling households how the amount of energy they were using related to neighbours affected subsequent use.
The problem was that it affected use in both directions. Those who were using more energy than their neighbours reduced their use to be closer to the average.
Smiley faces
However, those who were using less energy increased their use, to also become closer to the average. The study also tested the effect of injunctive norms (approval or disapproval of the norm or behaviour) and showed that a smiley face (☺) helped keep the efficient users motivated and that a frowny face (☹) motivated high energy users to use less.
Guided by Schultz’s research, Opower is about to run trials in Australia comparing the energy use of the householder with “all neighbours” and “energy efficient neighbours”. Smiley and frowny faces are included.
While this sort of communication seems overly simplistic, a recent and peer-reviewed independent evaluation of their program has shown it to consistently reduce long-term energy use by 2%, in an environment where energy use is going up.
This is very attractive to an energy sector constantly upgrading infrastructure at great cost.
The lesson from this is that Australians should expect to know a lot more about how much energy their neighbours are using in the near future.
Also, in addition to descriptive norms, expect other psychology-based persuasive communication principles to make their way into other parts of government communication to influence behaviour for public good.