Congratulations to Professor Richard H. Thaler for winning the 2017 Nobel Memorial Prize in Economic Science!
Last week, Richard H. Thaler won the Nobel Memorial Prize in Economic Science for his contributions to the behavioral economics field. Our approach to putting behavioral economics into action is largely built on Thaler’s contributions in economics, and we couldn’t be more excited to see him celebrated. Fiveworx parent company, Lirio, and our sister company in the finance space, Finworx, also rely heavily on Thaler’s work in behavioral economics to drive positive actions and better outcomes through effective communication.
Thaler’s efforts, along with research from other brilliant minds such as Daniel Kahneman and Amos Tversky, have guided how Fiveworx analyzes utility customer preferences, determines their unique energy personas, and tailors communication to address their specific biases. Without the substantial body of behavioral economics research from Thaler and his peers, our highly personalized and relevant communication might not be possible.
But what do Thaler’s work and behavioral science have to do with utilities? Well, his work has proven that people do not all behave the same or as we might expect. To understand people and drive them toward real action, we must focus on the individual and what truly motivates them to behave in certain ways. That understanding helps us develop effective ways to nudge them and encourage beneficial behavior.
So, utilities trying to build relationships with customers and/or influence them to participate in certain programs can’t just look at account profiles or meter data, they must also look at the person behind the meter. Sending blanket communications to all customers is not an effective way to motivate them to act or build stronger relationships. To drive customers into action, utilities need to look at the factors that influence customers personally, such as fundamental values or political affiliation, to help shape communication.
To truly personalize customer engagement and encourage action, utilities can leverage behavioral factors like those outlined by Richard Thaler. That’s a large part of our approach at Fiveworx. We help utilities get to know their customers through energy personas determined by behavioral factors, sending messages tailored by machine learning to truly motivate and nudge each customer to act. Behavioral science helps us deliver the right message to the right person at the right time.
For more information on some of the factors that drive Fiveworx’s approach to communication, check out our latest white paper: Why Personalization Matters.