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- [00:04]
A
Few British companies have grown at the same pace as Octopus energy. In the 11 years since launching, the organization has become the UK's number one energy supplier and now generates over £12 billion in revenue. Now, because Octopus Energy are a utilities company, they sell gas and electricity, you'd probably expect that this success is down to predictable rational reasons. Cheaper price, better customer service, easy to use, apparent. But that's not really the case. Those things are true, but that's not the reason it grew. Instead, Octopus grew because it did things that competitors would consider totally irrational. For example, they let customers customize their hold music, they give out free electricity on certain hours, they send flowers to happy customers and electric blankets to those in need. And they even let customers spin a wheel of fortune with every meter reading. These are not textbook proven methods of growth, but they are backed by behavioral science. Today on Nudge with Octopus, Pete Miller, we will walk through the psychological principles that grew one of the UK's fastest growing organisations. When someone asks AI for a solution, a product, a service like yours, does your business come up? Does AI suggest you does? Well, most companies have no idea and by the time they find out, they've already lost a deal or the sale to someone who did. HubSpot A E O helps you show up in those moments with the right answers buyers are looking for before the first click and before the first form is filled out. That's the moment HubSpot A E O is built for. Check out HubSpot.com, the agentic customer platform for growing businesses. Hello, you're listening to Nudge with me, Phil Agnew and I'm delighted to be joined again on the show with Pete Miller.
- [02:00]
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Hello Nudge listeners. I'm Pete Miller, I am a designer and I am the very first employee at Octopus Energy. So I have spent the last 10 years or so on my job, which is to create a brand that is trustworthy, lovable and engaging in an industry where those qualities are relatively scarce.
- [02:22]
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For the past 130 years in the UK, Brits have been struggling with a very peculiar giving monthly meter readings. You are supposed to each month read your gas and electricity meter. And you're supposed to do that because it allows you to get the best price on your bill. And yet many people do not do this. Even today, with millions signed up to use automatic meter readings, there are still millions of others in who continue to not give accurate meter readings.
- [02:52]
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Roughly half of Octopus customers don't yet have a smart meter. So a smart meter is a meter that takes your electricity or gas readings and immediately just sends it to your energy supplier so that they can process your bills. You know exactly what you've used and kind of everything is simple and straightforward. Roughly 50% of our customers don't have one of those. They have a meter which is often outside, locked in a cupboard. If you're in London, it's probably raining, there might well be spiders. There's a weird key that is used for nothing else in your home except for unlocking that particular meter. And your energy supplier is going to ask you to go and find that key, which you've never seen before, go outside, fight the spiders in the rain and send a meter reading just for the pleasure of sending you a bill.
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It's a behaviour that most don't enjoy. Despite the potentially high penalties. The Citizens Advice Organisation reported that Brits are paying 125 million at least, in unnecessary fees due to unreliable meter readings. The real number is probably much higher. It's just very hard to measure. And yet many, many people still do not reliably read their meter. Economic penalties were not changing behaviour, so Pete and his team came up with something different.
- [04:01]
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We introduced something that was literally just a little bit of. A bit of fun into this journey where customers, they can go through our app or onto the website and enter that meter reading. Every time they do that, they get to spin a little wheel and it's like literally, with your finger, spin that wheel and it's like the Wheel of Fortune game show, where the wheel will spin around and start to slow down and it will end up on a. On a prize of some kind. Some people win nothing. Some people can win up to £1,000 off their energy bill, all these kind of points which they can spend in our online shop called Shoptopus, because we like octopus puns, but it's a little way to kind of make something that's a little bit onerous. Rewarding.
- [04:42]
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This bit of fun is backed by reliable behavioural science. B.F. skinner, back in 1938, studied how variable rewards, the chance of winning a prize, can make a behavior more habitual. Skinner did his studies with rats, but genuinely, it applies to humans as well. He placed rats in a box with a lever. When the rats pressed the lever, they received a food pellet. He then experimented with different reward schedules. Sometimes the pellet came every time the lever was pressed, sometimes it only came out randomly. So you could press the lever once, pellet might come out, press it 10 more times, no pellet, and then on the 11th, another pellet. The rats that Received rewards on a random, unpredictable schedule, pressed the lever far more obsessively than those who got a guaranteed reward every time. Uncertainty, it turned out, was far more compelling and far more likely to build a habit than certainty. And just like the rats from the 30s, I. I find myself compulsively leaving meter readings and spinning that wheel today. Not because I'm guaranteed a valuable economic incentive, but because I have the chance of getting a variable reward.
- [05:52]
B
And what has been absolutely fascinating is this is one of the first things every Octopus customer mentions to me whenever they realize I work for Octopus Energy. They're like that wheel of fortune. A, I spin it all the time. B, I never win. And we realized that never winning thing was actually a really big part of the experience after we launched it. We do a real process of, like, get something out, see how people use it, and then change it. We realized there was a problem here where customers are mostly losing, and that doesn't feel great. Right? And so what we did then was there's a brilliant TV show in Britain called qi, and the QI elves dig up all these wonderful, obscure facts about really obscure things that you couldn't even possibly imagine, and they weave it into a game show. We approached the QILs and asked them for all of their facts about either energy, octopuses, the sea, anything kind of broadly related to the world we kind of operate in. And they gave us hundreds of facts back. And so now, even if you lose, we just give you a little reward of a little bit of a nugget of insight, a little gift of knowledge. Even if you lose, you still win in some way. So it's a small consolation, but it's a consolation that hopefully makes even the experience of losing turns you into a little bit of a winner.
- [07:10]
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Lucy Shen, a psychologist from the University of Chicago, conducted a very interesting study in 2015 with 87 participants. These participants were either incentivized with a small guaranteed $2 reward for doing the task or a 5050 chance of receiving either $1 or $2. So the second scenario is obviously worse. However, those in the uncertain reward condition, those who had the 5050 chance, completed the task at a 70% rate. So seven out of 10 completed the task, Whereas those who had the guaranteed reward, well, they only completed it at a rate of 43%. Octopus could give every customer who submits a meter reading a few pennies off their bill, but that wouldn't encourage behavior. Instead, they give Brits the chance of winning much, much more.
- [07:57]
B
The way a lot of brands approach technology is to Just remove friction. You try and make a process as simple and as straightforward as possible. And I think the Wheel of Fortune is a really good example of actually adding in something. It's completely superfluous, but it really changes the emotional response to that journey. It gives people a little dopamine hits, a little bit of fun something a repeat game they can keep trying away at, they can keep having a go at. And so it's a completely superfluous extra step that completely changes the number of people who participate in it, how they feel about it. And even if they lose, it means they're more likely to play next time.
- [08:39]
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It's an interesting idea. Adding friction can actually make an experience more enjoyable. According to Pete, the Wheel of Fortune isn't the only way Octopus have added friction. By the way, they have done the same with their Black Friday deals. So typical frictionless offer of a Black Friday deal is say, to give 50% off for all new customers. Over the Black Friday timeline, however, Octopus Energy came up with something that required a little bit more engagement. They called it Pink Friday.
- [09:07]
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We said, well, why don't we turn it around? And instead of a week of offers where just, you know, you get these kind of crazy discounts, let's do a week of surprises and gifts for customers where, you know, day one, we'll give free videos away with a streaming partner. Day two, it'll be little, literally boxes of octopus chocolates, little chocolates in the shape of an octopus. And, you know, we've got 5,000 of those, and when they're gone, they're gone. And day three will be completely different offer, but each one will be slightly different. A different piece of, you know, a different reward. And so you're kind of like getting something for nothing. I think in a world like energy is not a high margin, like sector, like, we make a tiny margin on our customers. The idea is to have a lot of customers who stick with us a really long time and we make a little bit of profit. And for us, trying to eke out like a sale here and there, but over time, we lose the trust of the customer or they feel like they're just being sold to it. They're just a commodity. That's really counter true of our whole goal is to create a customer who, they feel like they're getting value from us, they're being rewarded. They're being. They're like really valued as an individual. And I think Pink Friday is exactly that approach is like, how do we turn it into a rewarding mechanism instead of like an exploitative one.
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There's a behavioral science principle known as the power of free. Humans love free things. In studies from 2007, Americans were offered either a Hershey's Kiss for $0.01 or a Premium Lint Truffle for $0.15. Now, a Hershey's Kiss for those in the UK is sort of a low quality chocolate Lindt truffle, as we all know, very high quality, very enjoyable. So in this scenario, hershey's Kiss for 1 cent, truffle for 15 cents, most pick the truffle. That's the rational choice. It is much better than the Hershey's Kiss and it's still very cheap. But when the researchers dropped the price of each chocolate by 1 cent, making the Hershey's kiss free and the truffle 14 cents, suddenly 69% of people chose the Hershey's Kiss. So the majority switched their behavior. Nothing about the relative value had changed. Only the word free had appeared. And there was no pain of payment. They didn't have to pay that cent there and then it would just get taken off the their wage at the end. It wasn't that they were resisting doing something because they couldn't be bothered to pay. It was instead because we love free things.
- [11:37]
B
We have this whole kind of philosophy throughout Octopus, whatever department you work in, of kind of like autonomy and responsibility. So people aren't going to tell you exactly how you do your job. If you're taking calls, you're not going to get a script to talk through. It's your job to kind of listen to customers and try and anticipate their needs and solve their problems for them. And because of that, we have bright ideas that spring up all over the place. And one of those bright ideas, there was one team in Octopus who a team in Octopus typically looks after 10,000, 20,000 customers. That's one team of eight to 10 people. And that means if you call in, there's a pretty good chance you speak to the same person you spoke to last time. So it's really nice for building a one to one kind of relationship with your customers. But one team came up with a rule where every week they were going to send out a bunch of flowers to a customer. But the only rule was it couldn't be an apology, it had to be just, I found a customer who could really do with a bunch of flowers because of whatever's going on in their life. You know, you hear some incredible stories as an energy supplier and being able to make a small, even a little bit of a Token difference to people's lives felt like a really great thing to do. And the kind of stories that come out of this initiative are just incredible. It is people who like, I've literally had emails from customers who are like, there was a 70 year old gentleman who was like, no one in my life has ever bought me flowers. And this energy specialist at Octopus Energy sent me flowers and I broke down in tears. It is like the most beautiful relationship builder and it's like these small acts of kindness where people are freed up to actually do something that feels right for customers is incredibly powerful.
- [13:31]
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This would not work if the free gift was expected. Take loyalty cards. We are used to this concept that if you buy nine coffees, you get your 10th for free. That doesn't feel special, but receiving a surprise bunch of flowers feels a incredibly special because it is unexpected. It's free gifts and variable rewards tied up into one. Pret a manger do the same. They don't offer a loyalty card at their cafe, but their baristas give out one free coffee to someone each day. Lucky customers who receive this free coffee absolutely love it. Octopus could give money off, they could give out points, but receiving a free gift feels much, much better. And it's not just flowers and chocolates that Octopus give out for free as well.
- [14:14]
B
This really was an idea that came out the back of COVID actually. So during COVID during lockdowns, we had this weird time warp where from an energy perspective, we were actually like jumping ahead a decade or so because a lot of industry was shut down, a lot of people were working from home, so offices were shut and so electricity consumption really dropped. And yet we've had lots of solar, lots of wind generating electricity like it always does. And so there were these times of like incredible output of electricity. And the UK government were literally having to tell kind of solar plants and wind turbines to stop operating because we had too much electricity. And we're like, well, this feels like a problem that an energy supplier with a particularly engaged customer base might be able to do something about. And so at the time, there was no real mechanism for us to earn any financial benefit from this. But we thought, wouldn't it be interesting to see what happens if we say, dear customer, tomorrow between 4 and 6pm there's going to be so much electricity on the grid, we will literally have to shut down wind turbines and solar farms unless we can make the most of it. Will you help us? And every unit of electricity you use will be free. And we ran that exact experiment that you mentioned we're like, we tried, well, what if you gave it half price? Or what if we kind of had a points incentive instead? And free is just one of those magical concepts which makes it feel so much, so much more valuable than it would otherwise. We saw incredible engagement with, with this free thing. And in a way it's completely irrational because the amount of effort that you go to, to run around the house switching off all the stuff, changing your normal behavior doesn't amount to a big refund on your bill or, you know, a kind of like large cash. This is like 50p here, 10p there, but people get it. It's a really simple concept for people to grasp and people really engage with it. I talk to energy suppliers all over the globe all the time. And generally these kind of programs are called Demand side Response, which is a terrible and very boring name. But they're broadly seen as niche things that really engage consumers who have lots of technology will participate in. If they have an electric vehicle or if they've got a battery at home that they can automate, then they'll participate in it. Otherwise, like normal humans are too unpredictable. They are widely distributed and they're completely unreliable. It's never going to work with real humans. And yet what we found over the last few years is actually 50%, broadly speaking, of our customers who are eligible to participate in these sessions have literally put up their hands and said, yes, please. This sounds like fun. I'll give it a bash. This is not like some weird little niche of early adopters. This is like mainstream real humans going, you know what, I am going to run around and turn off the lights, not turn off the lights, to be honest. Let's do things like cook a little bit later or put the dishwasher on to start at 8pm instead of just as soon as I've closed the door. So it's really fascinating insight, but free is so important concept in there.
- [17:42]
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Pete says that free is just one of those magical concepts. It might sound cliche, but when you look at Octopus Energy's strategy, you see that they apply it time and time again, giving out free gifts wherever ever possible, even during times when most energy suppliers were really struggling.
- [17:58]
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The energy crisis was such a difficult time for energy suppliers. You know, despite the fact that we're not the ones making the big profit in an energy crisis, that's the people who have kind of dug up the fossil fuels or whatever else and shipped it across the world. Being a renewable based energy supplier, we were still making the same slim margins we normally do. But yet there was this incredible anti energy sentiment. Rightly right, because people are paying these incredible enormous prices. And so as a company, it's quite a difficult time to engage with customers. Some of our competitors have been kind of like, you know, criticized for telling their customers to do star jumps to keep warm and this kind of thing where it's like if you say the wrong thing, obviously you're going to be quite rightly criticized for it. And yet we were having more conversations more often than we'd ever had with customers who were in real difficulty. You know, people were calling us every day, tens of thousands of customers and saying, I don't think I'm going to be able to pay these bills. And so Greg, our founder actually was, he was driving home late one night and wondering like, how can we actually help customers through this? How can we make a meaningful difference? It literally struck him, a conversation he'd had many years ago with a friend in his uni days about how it is just so much more efficient to heat an individual than it is to eat a home.
- [19:22]
A
Based on this insight, Greg came up with an idea. Why not send out free electric blankets to customers struggling to pay their bills? It sounds like a really good idea, but straight away Pete saw a problem.
- [19:34]
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I mean, that sounds bonkers, right? I mean obviously it makes sense when you think about it, but like an electricity supplier sending out electric blankets so you use more electricity could feel like something that is very self interested and completely cynical, right? So we were like, you know what we're not going to like, this isn't a press opportunity. This is really an opportunity to help customers. We went and got every single electric blanket we could find. We like stocks were out everywhere. We bought 40,000 electric blankets and we started sending them out to customers. Like if a customer got in touch and said, I'm not going to be able to heat my home this winter, we'd send them an electric blanket instead. And the results were incredible. People were like cutting their heating bills 10, 15, 20%. So it just really grew out of that. And actually we've been giving away electric blankets ever since. It's like actually it just makes more sense. It's a great thing for customers, it's a great thing for the environment, it's a great thing for bills. So why wouldn't you?
- [20:36]
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Freebies, wheels of fortune, free TV shows, flowers, electric blankets. These may sound like gimmicks, but they are, I think, a core reason why octopus have grown. But it is not the only principle they have used no octopus Let customers customize their hold Music and send 7 million personalized emails a week. Find out why after the break. As some of you know, I run Nudge by myself and like any solo business owner, I need support from time to time, whether I need some legal advice or sorting my taxes out. That's why I'm a Federation of Small Businesses Member the Federation of Small businesses is the UK's leading membership organisation for small businesses and the self employed. There are over 500,000 business owners in the community and you can save over £1,000 through their exclusive discounts. And because FSB is not for profit, every penny of your membership goes back into supporting the small businesses in the uk. It funds the work FSB do to advocate for its members and self employed people in the UK. Visit get.fsb.org uknudge or click the link in the show notes and use nudge to get 10% off your membership. The podcast I'd like to recommend to you today after listening to today's episode of Nudge is Success Story, hosted by Scott D. Clarry and it is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q and A sessions with successful business leaders in marketing, sales, and it covers everything from big businesses to startups and entrepreneurship. So go and listen to Success Story wherever you get your podcasts. When you call your utilities provider, you'll be put on hold and you'll probably hear music like this. It's the classic hold music and after 30 seconds it will start to drive you mad. So to stop customers pulling their hair out, Octopus instead try to surprise and delight customers that call them up.
- [22:47]
B
This, this is, this is brilliant. So this is one of my favorite parts of the Octopus experience. Partly because I think it's, it's wonderful because for the most part it's actually invisible. Most of our customers, we have their date of birth on file. One day, you know, after a long week at Octopus, I was chatting to one of our energy specialists about just how the week had gone and what kind of common complaints they'd had. Kind of raised them time and time again. And he said literally three times today, customers have complained about our darn hold music. And you know, like hold music is one of those areas which are complete. Like it's, it's one of those low points of a customer experience. It's like either really generic, bland, that's meant to calm you down, but if you're slightly irate, it actually does the opposite, or it's like modern Pop, which half, at least half of your customers have no idea what attitude this is. And so we just started spitballing. How could we do that in a. In a better way? We came up with the idea of literally serving up the song that was number one in the year you turned 14 as your default hold music.
- [23:49]
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If you're born in 1999, you'll hear Daft Punk. If you're a 1985 baby, you will get Britney. If you're born in 1974, you'll hear Yaz. And those born in 1966 will hear the Police.
- [24:17]
B
The difference between before and after on this was, like, absolutely incredible. It's like, because we. We pride ourselves on picking up the phone pretty quick. 30 seconds, maybe 45 seconds, you might be waiting. We put this live and it went from customers, like, going, oh, I'm surprised you picked up the phone so quickly to. Well, it's great you've picked up the phone so quickly, but can you put me back on hold? Because I was just getting to the chorus and it's my favorite bit. But it's like the thing about 14 was really important. Like, there was a really interesting study in the New York Times about people's listening patterns on Spotify. And we specifically chose 14 because that's a time when you're kind of first aware of real mainstream hits. Music starts to mean something. Obviously, we're all full of hormones and it's kind of a weird time anyway. But, like, as we grow a little bit older, we start to develop. Develop, like, social clicks and, like, music becomes a little bit of a part of our identity. And often that means it becomes less mainstream. So 14 is the time that at first the music starts to mean something, but it's also like when we've got the most mainstream taste. And so these are songs that are probably not your favorite song of all time, but it's a song that you're a bit nostalgic about, reminds you of maybe simpler, happier times. And it is just, like, transformative. But we soon realized that there's going to be some customers it's not going to work for, right. Whatever the song is, there's going to be some customers who are like, that reminds me of my first girlfriend and we have a terrible relationship now. I need to change it. And so then we're like, you know what? That's obviously a thing we should do. So Octopus customers can literally log into their online account and pick the song they want as their whole music. Like, thousands of customers have literally said, just Give me silence. And like that's a really important option too. And so giving them the control over that experience, it's kind of like it's that IKEA effect, isn't it? It's like I've built this and it's personal to me and I value it more because of it. I think it's a really wonderful touch point.
- [26:12]
A
I'd argue that giving customers choice over their hold music is the most important innovation here. Pete referenced the IKEA effect. That's the phenomenon where we overvalue things that we have had a role in creating. Mike Norton in his studies have proved this effect with Ikea wardrobes, origami, art and food. The same probably applies to hold music. We will enjoy the hold more and spend more time holding if we picked the music ourselves. Octopus lets you personalize the experience. They're a huge organization with 10 million customers globally, but they want their communications to feel personal.
- [26:49]
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A lot of what we do is pretty invisible. So actually our communications that we send out are a really fundamental piece of building our brand. There was this point I realized it was a couple of years ago actually. So we send about 7 million emails a week to customers and every single one of those can be replied to. There's nothing that comes from a no reply address, which is great for a customer experience. You know, back to that thing of agency. If you see a line that you don't understand, you can literally reply to a bill and say, what's going on here? It really gives like a simple doorway into taking control of your energy bills. But there was a point where I realized that with so many emails going out every single week, I looked at the readership numbers for every national newspaper and more. Octopus Energy emails are read every week than any national newspaper in Britain. So you've got to think about that in terms of like, well, here's a real opportunity to make a massive difference, right, about how people feel about energy, about how engaged they are and their views on it. Personalization has always been a really big thing for us. We're lucky. We build all of our own technology and we have all of our customers data in a single place. We've built our own tech to make this easy. But it means when I'm writing a communication, I have about 400 or 500 individual data points on a customer that I can use to personalize that communication. It might be, you know, the simple things like their name and first name and last name. It's good to get those things right, but it could be anything from how Much energy. They're using what their last bill was, programs they've signed up to. If they've got got an electric vehicle or a heat pump or solar and battery, I can use kind of if statements or else statements to really make those communications personalized. So that means if I send out 5,000 emails, there's a very good chance that there's, I don't know, 500 permutations of what those communications actually look like when they land in an individual customer's inbox. And that level of personalization, I think, really builds a sense of trust that it's personalized to me, it's relevant to me. And that helps with that whole process of agency. It really builds confidence.
- [29:12]
A
Octopus give their customers this sense of control, a sense of agency. They let customers reply to every email, personalise, hold music, opt in to free energy hours. And it is smart because we all have this irrational love of control. In Rolf Dolbelli's book, the Art of Thinking clearly, he cites a by an American researcher who investigated our sensitivity to acoustic pain. It's a really interesting study. Bear with me. So for this experiment, he placed participants in sound booths and increased the volume of the sound until the subjects signaled him to stop. The two rooms, A and B, were identical, except for one thing. In room B, there was a red panic button on the wall. The button was purely for show. It wouldn't have done anything if people pressed that button. But it gave the participants the feeling that they were in control in the situation. And it enabled them to withstand far more noise, far more painful noise than the participants in room A. Crossing the street in a busy city like London can be quite stressful. It can take a lot of time. But there are of course, traffic lights with buttons which you can press to stop the traffic. Or does it? Because in many parts of the city, the button's real purpose is not to stop the traffic, but instead just to give the pedestrian the feeling that they are pausing the traffic. And that makes it easier to endure the weight. The same goes for door open and door close buttons in elevators. Many are not even connected to the electrical panel, but they give you the feeling that you're doing something. And such tricks are apparently also designed into open plan offices. For some people, it will always be too hot, and for some too cold. And clever technicians have created the illusion of control by installing fake temperature dials. This illusion of control makes us feel more comfortable. And octopus don't just give the illusion of control, they give customers real control, sometimes giving them the ability to use Unlimited free energy or rewarding them for using less.
- [31:08]
B
Alongside our free electricity sessions, we also do these turn down sessions where if there's not enough renewable energy on the grid, actually we might have to bring in more gas, energy supply, we might have to, I hate to imagine it, but bring in coal, one of the worst possible options. So instead of doing that, we encourage customers to use less. And if they can use less, for every unit they use less, we'll give them a little reward for that.
- [31:33]
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Pete and his colleagues used the same principle during the 2022 energy crisis.
- [31:38]
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There was another program which we ran, which was called the Winter Workout. And this is in a world before. We've really done a lot of our kind of nudge programs like use a little bit less, use a little bit more, earn rewards for it. But it really came out of a point of crisis where it was energy prices, particularly gas prices, are about to go through the roof following Russia's invasion of Ukraine. And we're going straight into winter, which is when people are going to feel it the most. And it was a really hostile environment. We were kind of like, how can we help customers, but at the same time not absolutely destroy our brand? And we ran a few calculations and obviously as an energy supplier, we have to buy energy upfront for our customers. We're committed to delivering energy, and that means even when prices are expensive, we have to keep buying energy. So we ran some numbers and we realized if we could just get customers to turn down their gas use by 5%, we could sell back some of that expensive gas we'd already bought. And the quantum of that was about a million pounds. And so we said, you know what, why don't we make this cost neutral? Why don't we put up that £1 million as an incentive to customers to cut their bills over winter? And so really quickly we came up with this program called Winter Workout. And I mean, if you imagine energy efficiency campaigns, you know, the government has tried this for years, charities have tried this for years. They all end up in an area of kind of like trying to educate their way into behavior change. And I think sometimes you've got to really start with, with what's actually going to motivate people to engage and participate differently. So we said, sign up to our program. We'll give you some simple tips on how to cut your gas use this winter. And if you cut it by 5%, you will win your share of this million pounds. And so we had no idea how this would go down. We had no idea how much People would actually earn off the back of it. But within 72 hours, we had quarter of a million people that signed up and said, yes, please, I want your energy efficiency tips. And so we put these tips live. It was a simple mechanic where people could say, I've done this tip. And they could then monitor how their energy of use changed over time. So it was again back to the principle of agency. It was about letting them give feedback and then see the results. But we got to the end of this campaign and it was really successful. Loads of people cut down on their energy use, but that meant the share of the prize pool was not big. And so it was £7 20 each customer earned. And so we were a bit nervous about sending out these communications. Like, we talked a lot about a million pound price pool and you're getting £7.20 at the end of it. It feels slightly awkward. And so we were then like, so what are the behavioral principles we can leverage here? And we've talked about generosity and reciprocity before, but. But I think this was another really good example of that, where we basically said, you've earned £7.20 through your participation. You've also cut your energy bills and saved on carbon emissions, which is a wonderful thing to do, you brilliant human. £7.20 may not make a massive difference to you, but for someone struggling to pay their bills, this winter can mean a big thing. If you donate your £7.20, we will meet it pound for pound, and that will be £14 40 going towards someone's bill struggling to pay. The uptake on this was massive, but even more so, the customer sentiment around it was overwhelmingly positive. In a world where people were viewing energy supplies as the evil guys, here was a real opportunity to flip that around and actually do a little good. Great for the brand, great for customers. And I think one of the little touch points which was really important was we had a form. You had to submit a form to say, I want to donate my money. And after you finish that form, you know, you can imagine, usually you submit a form and you go, thanks very much, we've received your submission. You can close the window. But instead we're like, thank you, Pete. Your generosity means £14.20 is going to help another customer pay their bills this year. The number of screenshots and love for that moment. And so I think, like, there's so many opportunities to apply these behavioral principles. It really takes someone to go, oh, there's one, there's one there. Spot it, put it in and the smallest interventions can have massive impact. So I think it's a really nice example of like just a small tweak can make a massive difference.
- [36:21]
A
What impresses me about Octopus Energy is not the application of specific nudges. Yes, they use variable rewards to encourage meter readings. They leverage the illusion of control to keep people on hold. They used reciprocity through their winter workout donations and lots of companies have done the same, right? Lots of companies have tried one or two of these approaches, but Octopus Energy go further. They combine multiple nudges in multiple ways in an attempt to elevate everything they do.
- [36:49]
B
If you take two scientific approach to behavioral design, you end up in a world where you go, I'm doing this version which is all about loss aversion and this version which is all about community engagement and this version which is all about a third principle, right? And like we're often going, how do we weave all of those principles into something to really supercharge? How can we pull all of those strings to make sure it feels like it's super rewarding for customers and that there's a. Because there's a real big goal here, that if customers engage their bills are going to be lower, it's going to be better for the planet and like it's a real win, win, win massive.
- [37:22]
A
Thank you to the brilliant Pete Miller for coming on Nudge and sharing these experiences examples. I hope they inspire you to test out some of these approaches in your own work. Now, you might want to follow Pete's advice and apply lots of different nudges across your business, but you might not know where to start. Which nudges should you pick? Where can you find reliable insights? Do you have a database of evidence backed tips to follow? Well, probably you don't. And that is why I have built the Nudge Vaults. The Nudge Vaults is a database of over 500 evidence backed insights from the world of behavioral science that are easy to understand and easy to apply. If you want to take some of the principles we've spoken about today, like variable rewards and the power of Free, and apply those principles to your work, then you should check out the Nudge Vaults. For example, say you're writing an email to customers and you want to apply these two principles in email, you can add filters into the Nudge Vaults database and you'll find dozens of specific insights from people reviewed papers with plenty of tips on how you can improve your emails with the principles we've spoken about. Or you can take your email, you can give it to vaultsgpt, my custom built AI assistant and that will then look through the nudgevaults and give you tips on how you can improve it. But don't just take my word for it. Here is what David a Nudge Vaults user thinks of the platform. The Nudge Vaults are an absolutely world class treasure trove of new cutting edge information that participants can apply and employ straight away. My name is David Mead. My primary career was as an academic and BBC broadcaster. What's wonderful about it is Phil has done all of the hard work. He has sorted and sifted through the guff and crystallized it all down into a sentence or two. Every once in a while I find myself even on a train logging in, having a wander and finding a piece of research either that I've never encountered before or that I did learn about and I've forgotten. And the Nudge Vault is hands down the best investment that I've made in 15 years. If you think you might want nudgevault as well, then go to nudgepodcast.com vaults, that is nudgepodcast.com vaults. Or just go to nudgepodcast.com and click vaults in the menu or just click the link in the show notes. Once you go there, you will even have the chance to Preview your first 50 insights for free. And if you've learned anything today, it's that hearing that it is for free will make you more likely to do it. So sorry about that. Anyway, that is all from me. Thank you so much for listening. I'll be back next Monday. Bye bye.