2013-09-10



Combining behavioural science with sustainable design could be a powerful game changer in shifting consumer behaviour

Over the past two years, a growing number of conferences, papers and articles have looked beyond the technique of nudging people to change their behaviour. The question is: what comes next now that nudging is not seen as the silver bullet? Judging on both questions and answers from the leading voices in the field, the journey beyond nudging offers promising solutions to the challenge of getting people to behave more sustainably.

First, consensus on the importance of return on investment seems to be evolving. This deserves strong applause. Quite simply, this indicates a steady movement away from buzzword bingo towards strategic decision-making creating real-world value for as many people as possible. Beyond nudging lies the world of applied behavioural science or, alternatively, the domain of behavioural design.

The Behavioural Design Lab in London is one of the most promising institutions working on this front. A bold multidisciplinary collaboration between Warwick Business School and London Design Council, the Lab combines insights from behavioural science with design thinking to help different organisations fulfil their goals, with a particular focus on social development and urban development. For instance, take this innovative project aimed at retrofitting draughty and energy inefficient homes in Crawley, West Sussex, with the aid of behavioural insights such as framing and default settings.

The potential for synergy between energy consumption and behavioural design is significant. If big data and other technologies are taken into consideration as well, further possibilities arise. This is evidenced by a new collaborative project between Warwick Business School and Honeywell Building Solutions. The ambition is to reduce the energy consumption of organisations by applying a combination of relevant technology and behavioural design. If this, and similar projects within the energy sector, are able to deliver real value, behavioural design could play an important role in the future of the industry.

In the US, the world's largest behavioural design experiment is taking these insights to the next level. The American energy software company, Opower, uses a powerful combination of big data and behavioural design to make consumers use less energy. The company works together with the psychologist Robert Cialdini – one of the world's leading experts on persuasion and influence – to increase the number of consumers actively taking part in various energy conservation programmes.

Cialdini is the man behind the idea of the power of social proof – also being applied by the Behavioural Insights Team in its recent efforts to decrease the rate of late income tax payments. Opower has developed personalised home energy reports that consumers receive together with their usual bills. These indicate how much power a given person is using compared with his or her neighbours. This application of social proof works out well, and Opower expects to save enough electricity this year to power a city of 250,000 people for 12 months. The principles behind the experiments are described in detail in this academic paper.

But the powerful integration of behavioural design and big data is even more promising. The arrival of sophisticated smartphones and far more advanced meters have made it possible for Opower to offer its customers much more personalised advice on how to save energy. The state-of-the-art meters supply customers and Opower with increasing amounts of detailed data about the power use of the household. Since the data is in real time, the customer has the ability to detect energy waste and doing something about it immediately.

These projects all demonstrate the power of behavioural design, especially when combined with technology such as big data. In line with nudging, it is vital to reject the concept of "homo economicus", the theory that people are purely rational and self-interested actors regardless of situation or context. But, additionally, behavioural design is about the systematic effort to maximise return on investment while simultaneously exploiting the benefits of multidisciplinary thinking.

Having praised the promises and potentials of behavioural design, neither nudging nor behavioural design contain any quick fixes and rigorous analysis is still the most important precondition for desired behaviour change.

In a recent interview, Opower's behavioural marketing manager, John Balz, offers thoughtful considerations on future challenges. In his opinion, we need more behavioural designers equipped with the necessary leverage inside powerful organisations to rock the business boat in the same way Opower has. Furthermore, he asks us to pay much more attention to the importance of behavioural design delivering actual products, experiences, programmes and policies that add real value to the customers. No doubt that success on these two parameters is essential for the future of behavioural design – be that in sustainability or elsewhere.

But there is no need to kill the optimism and enthusiasm about the evolving behavioural design magic beyond nudging. Therefore, those people working hard to turn cold homes warm in Crawley get the final word: "In the future, this won't be unusual. Right now, it feels revolutionary."

Christoph Burmester is a journalist and management consultant whose work focuses on the business and government application of behavioural economics. He works as a behavioural designer at /KL7 located in Copenhagen.

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