Using consumer psychology to reduce energy bills

How consumer psychology can help people reduce their energy bills

This winter, gas and electricity prices have skyrocketed, going up by 54%, and many UK adults are struggling to pay these bills.

In our October Mood of the Nation report, we found 4 in 5 UK adults are highly concerned about increasing energy prices, especially women. With this increase likely to cost many households hundreds of pounds, creative solutions to keeping warm this winter will be top of consumers’ minds.

4 in 5 UK adults are highly concerned about the energy price cap increase October 2022

Martin Lewis’s advice works well with perceptual fluency

In a recent guide published on his Money Saving Expert website, Martin Lewis recommended people buy electric blankets to use over the winter to keep themselves warm instead of putting the heating on. As this cost roughly 3p per hour, it’s cheaper to ‘heat the person instead of the room’.

This method has also been applied to modern clothing solutions which involve battery-powered heating packs built into jackets, gloves and sweaters to name a few. Martin Lewis’s website said an electric Gillet or USB-warmed gloves would cost just 4p per week to run and this has proven to be a popular tip with his followers.

Martin Lewis is well known for showing his cost calculations in a clear and easy-to-understand way which works well with perceptual fluency. This is the concept that when we are able to easily process and understand information we are more likely to apply positive attributes to it and therefore like it more. In the case of Martin Lewis, his tips have been especially popular as he clearly states the monetary cost of these heating solutions per hour or per week.

While the average UK adult may not know the exact hourly cost of individual items in their home, they know that a few pence an hour sounds significantly cheaper than the large energy bills households are currently facing.

Energy companies have a lot of work to do to improve their perception with consumers

While many UK consumers trust Martin Lewis and his advice, we know that the same cannot be said for how people feel about energy companies.

In our October Mood of the Nation report, we found that energy companies are currently seen as ‘Greedy’ and ‘Profiteering’ suggesting people feel these companies are unfairly benefiting from energy increases. If these companies want to improve their image with customers they need to be clear and transparent with their prices. Educate customers on how much it costs to run the gas/ electric for items that they can relate to. E.g- have the heating on for an hour, the cost of a 5-minute shower, cost of putting the kettle on.

UK adults see energy companies negatively, the describe them as Greedy and Profiteering

Keeping these figures simple and based on an hourly rate improves perceptual fluency by making it easier for customers to compare prices, understand their usage and therefore make more informed decisions this winter.

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Written by Tara Moran, Research Executive at Spark Emotions.
If you have any questions, feel free to reach out to Tara via email or connect on LinkedIn