3 experiments that Skyrocketed Energy Savings, Cut Emissions by 40% and Boosted Savings >90%
Using power of defaults and awareness to change consumer behavior
This week’s post is a little different as it's not from traditional tech products. We will share how you can use the power of defaults and awareness to drastically change consumer behavior and increase your metrics.
Experiment 1: Reducing energy consumption by 200% through Meter Placement
Context: Suburb near Amsterdam with single-family houses built simultaneously, showcasing varying energy consumption patterns.
Problem: Despite similar construction and demographics, certain houses exhibited significantly lower energy usage compared to others, defying explanation.
Experiment: An investigation revealed that houses with electric meters installed in the front hall consumed one-third less electricity than those with meters situated in the basement. The meters with visible placement allowed occupants to regularly observe energy usage, while those in the basement went unnoticed, leading to higher consumption.
Impact:
Houses with visible meters experienced lower electricity usage, fostering conscious energy conservation.
The experiment underscored the influence of environmental cues on consumer behavior, highlighting the importance of visibility in promoting energy-saving habits.
Learning: if you want to drive positive behavior change, make the consumers aware of the data. The sheer awareness of data will itself drive the change without nudges
Ways to apply this learning in a few select companies:
Squarespace - Business Website Builder - provides an insights page with impressions, contact us clicks, and errors with the HTML to drive up editing/updating of their website to get more leads.
Uber - making the riders aware of your rating helps build safer and well-behaved riders to help boost their metrics
Spotify - making listeners aware of their top-listened music and statistics through Spotify Wrapped drives increased engagement and list creation.
LinkedIn - For Content Creators exposing your impressions, profile visits tied to the content you create give the creator more data on what type of content resonates with their audience.
Experiment 2: Public Disclosure drove 40% reduction in Chemical Emission
Context: Introduction of the Toxic Release Inventory legislation in the U.S., mandating companies to report hazardous air pollutant emissions.
Problem: Chemical emissions remained unchecked despite legal compliance, posing environmental risks.
Experiment: Following the public release of chemical emission data in July 1988, local newspapers published lists of "top ten local polluters," exposing companies' emissions to public scrutiny. Although no legal repercussions followed, companies faced public scrutiny and reputational risks.
Impact:
Within two years of disclosure, nationwide chemical emissions decreased by 40%, reflecting the power of public information.
Some companies voluntarily committed to emission reduction targets of up to 90% in response to public pressure, illustrating the transformative impact of transparency on corporate behavior.
Ways to apply this learning in a few select companies:
Dating - Before joining a video dating session, warn the users that these calls are moderated for profanity, nudity, and inappropriate behavior - even if you don’t have any moderation put in place reduce “flagged” calls by 20%
Mobile Gaming - having a “top 100” leaderboard drove non-engaged users to come back to your product and compete to be ranked.
Apple - iPhone sends you how much time you spend on your screen every week - the user knowing this will come at the end of the week doesn’t want to surpass your screen time and will minimize using their phone as much.
Experiment 3: Default Pension Participation Increases Savings >90% in the UK
Context: Low employee participation rates in pension savings programs in the UK prompted government intervention.
Problem: Low adoption rates of pension savings programs hindered financial security for employees.
Experiment: The experiment focused on altering default settings for pension participation. Employees were automatically enrolled in the pension program, with the option to opt out if desired.
Impact:
Before the default setting change, pension participation levels were in the single digits.
The introduction of the default setting led to approximately 90% of employees remaining enrolled, demonstrating the power of normalizing desired behaviors.
Learnings: The experiment emphasized the significance of default settings in shaping individual decisions, highlighting the effectiveness of psychological interventions in promoting beneficial behaviors.
Ways to apply this learning in a few select companies:
Fintech - default reinvesting dividends to increase AUM
B2B SaaS - default an extra seat at checkout to drive up collaboration and AOV
E-Commerce - Amazon opts you into a subscription when you buy essential products (i.e. toilet paper, vitamins, toothpaste, etc.)
Dating - create a default introduction message that is sent to new matches to maximize response rates
These experiments underscore the potency of environmental cues, public disclosure, and default settings in driving behavioral change and fostering sustainable practices. Share your thoughts or similar experiences in the comments below. Let's continue to harness the power of information and behavioral nudges for positive impact! 🌱