Persuasive and Profitable Uses of Feedback
23rd February 2010
Feedback, information on the difference between your current situation and a desired outcome, is a powerful tool for change. People are naturally equipped with the ability to make these comparisons and then make adjustments to thinking, feeling, or acting to move the current state toward the goal. Here’s a great story in the Wall Street Journal that describes how power companies are using feedback through usage meters and pricing strategies to alter consumer efficiency.
Usage meters are more sophisticated meters that not only measure energy use, but also provide easy to access, real time, and understandable feedback to the consumer. Smarter meters are also hooked into a control system where consumers can program energy devices in ways that make them more efficient RIGHT NOW.
Now, none of this is rocket science either to consumers or power companies. The interesting wrinkle, however, is how much more complicated the system has become with the addition of feedback. In persuasion terms, the TACT has gone from a fairly generic definition of the Who (any customer) to a much more segmented definition (customers who have health problems that require a constant energy usage; customers who have people at home all the time versus customers who don’t; and on and on). With feedback meters, the great variety of individual difference comes into play.
In essence, the meters have created a massive persuasion system of interacting people all with individual needs and desires, responding on the basis of not only the meter usage (and price implications) but also thoughts and feelings about control, justice, the Good Life, community demands, and on and on. We have a complex social system of interacting people with diverse needs and desires. We’ve got Persuasion, baby!
Now, you need to keep your head on straight and all the concepts orderly. Feedback is not a form of Reinforcement Theory. Feedback does not provide Consequences, only Information that compares two States. The Consequences come from the power company in the form of Price. The power folks are testing combinations of Carrots (rebates) and Sticks (higher prices at peak times) to see what works because no simple Consequence pattern works with all these diverse TACTs. So far, they appear to find that people are more sensitive to Loss (higher prices) than Gain (rebates) which is common, so expect pain from the power guys – it tends to work better.
Note, too, the Attribution plays in here. Customers can only make internal attributions (I did it) for their energy consumption (assuming fair meters). Thus, the feedback tends to keep people on an internal motivation track rather than an external motivation track. This difference is important. Internal motivated people will control themselves and find methods that they like while externally motivated people wait around for The Man to push the buttons and complain all the while about it.
Additionally, all this action will probably generate High WATT, Central Route processors who look for the Arguments (like Price, Convenience, and Comfort). People really think about this so you’ll get all the positive outcomes of Central Route activity: More persistence, resistance to counter arguments, and prediction of future behavior.
The really Good News here is that the average effect of meters across all TACTs is positive and appears to produce a small Windowpane effect size (about a 10% reduction in usage). Larger effects in usage arise with combinations of TACTs and price (people who turned on everything all the time and left them running react quickly to use and price). Furthermore, this effect occurs immediately, typically within the first billing cycle. Thus, everyone starts recovering the investment cost of the meters almost from the starting gun as opposed to other Green tactics that can take years of use to break even (as in this foolish, but faddish application – scroll to near end of the post).
The most interesting news reported in the story is anecdotal evidence offered by the power companies: They claim consumers have positive attitudes and affect toward the meters. This positivity is not universal (why would you expect that?). In one case, meters were installed in a large community just before an unusual heat wave hit. When consumers got their bills which were unusually higher for the time of year because of that heat wave, they attributed the increase to the presence of the meters (“The damn things are miscalibrated to favor the power company!”). Thus, barring unfortunate coincidences like this, people respond favorably to feedback.
To close the persuasion lesson here, please note that feedback is a special combination of information. Everyone has to agree on the Goal State, what it means, what it looks like. Everyone has to agree on the Current State. When you provide fair information that accurately compares Where You Are to Where You Want To Be, you’ve got Feedback. You could also add some fabulous persuasion plays to amplify effects, but that’s another post. I also suspect that the Power boys and girls aren’t thinking Persuasion since they’ve got Price, but they could earn more Profit if they combined Persuasion with Price in this Feedback Play.





