John Balz of Opower on PTTRNS

John Balz of Opower on Being a Behavioral Marketing Manager

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First of all we are very excited to get the possibility to interview you. Thanks so much for taking the time for us. We know Opower as one of the leading companies when it comes to applying behavioral science to their business. 

BTW You should follow John on Twitter at @NudgeBlog.

Let’s chat.

Before I turn to your role as behavioral marketing manager at Opower I would first love to talk more on your idea that companies should have a Chief Behavioralist. The only person I know that would fit that description would be Matt Wallaert at Microsoft. But I think we can conclude that there aren’t many Chief Behavioralists yet. 

1. Why should companies have a Chief Behavioralist to begin with? 

Without that exact title, I think there are people who are functionally, if not formally, serving in a Chief Behavioralist role: Dan Goldstein, also at Microsoft, Paul Sas at Intuit and Rory Sutherland at Ogilvy & Mather.

There are many others at lower levels or at smaller organizations developing the capacity to serve in such a role eventually.

My view is that as more modern problems are recognized as behavioral, more companies will need Chief Behavioralists. These are problems where the technological and financial barriers to taking action are low.

Harvard Behavioral economist Sendhil Mullainathan refers to these as “Last Mile Problems.” A classic example is child deaths in India from diarrhea.

Smart scientists have delivered an effective solution. Smart entrepreneurs, doctors, and managers have figured out a way to get it around the globe at a cheap price.

The number of deaths dropped substantially, but even today, there are more than 400,000 deaths due to diarrhea in India each year. Behavioral barriers are blocking the final step to action.

Companies that find themselves facing problems among their own workforces or among their own customer bases that they haven’t been able to crack through technology or money alone would be well-served by a cross-functional behavioral team of practitioners with skills in behavioral science, analytics, communication, and operational logistics to tackle them.

Ideally, the team would be led by someone carrying the title Chief Behavioralist.

2. At Science Rockstars our highest goal in behavior change is being able to predict behavior on an individual level. What kind of big agenda should a Chief Behavioralist push? 

Right now, my sense is behavioral science thought is ahead of behavioral science leadership. Behavioral science has made the best-seller list with books like Nudge and Predictably Irrational.

New studies get written up in major media outlets like the New York Times. A number of academics and non-academics have achieved rightful recognition by promoting the ideas of behavioral science.

What there aren’t yet enough of are behavioralists inside organizations championing the perspective day-in-and-day-out. Turning it from interesting cocktail party talk into the specific products, experiences, programs, and policies that an organization is responsible for.

Working with others who have heard of behavioral science but don’t live and breathe it. Managing teams to execute behavioral strategies. Showing the value, not just the novelty, of these ideas, at the highest level of an organization. Moving from brilliant outside thinkers into respected inside leaders is an important next step.

Take automatic 401k enrollment. It’s probably the premier example of a great nudge. It’s more than a decade old now. People of differing philosophical perspectives and political leanings agree it makes sense. And yet, more than half of companies don’t automatically enroll their employees, according to two different 2013 studies I recently came across.

That big a gap for the maybe the best-known, most non-controversial nudge shows just how far behavioral science still has to go.

You are now at Opower, which I think is a very exciting place for a behavioral scientist. I know of Opower because Bob Cialdini advises them. And it has affiliations with Ideas42, a think thank you used to work for. When preparing for my PhD Dan Lockton pointed me in the direction of this excellent MIT working paper on Social Norms and Energy Conservation, which discusses several programs that Opower is running. They are doing some cool and pioneering stuff at Opower. And you guys seem to be really into the scientific method, which we like a lot.

3. Can you share some of lessons the latest behavioral programs you are running? 

We’re running the largest behavioral science experiment in the world right now. For anyone interested in human behavior – not just energy behavior – it’s an amazing place to be.

It may sound simple, but one fundamental insight of our work is that to change behavior you don’t necessarily need to directly persuade someone to do something. People influence other people, of course.

Companies frequently turn to this form of social proof by telling people how many others around them are doing X or buying Y. Being so explicit isn’t necessary or even preferable always. Better to just reveal behaviors around you that you didn’t know were going on. Action often follows.

4. Are you aware of any advanced behavioral programs other commercial organisations are running that you look up to? If so whose dataset would you been keen to get hold off?

Amazon. Google. Phone companies. Credit card companies. Facebook. Any organization that lots of people frequently interact with across different parts of their lives.

I have a lot of respect for the people behind the 2012 Obama campaign, which drew heavily on behavioral ideas and executed them brilliantly. And to the Nudge Unit in the UK for the successes they’ve been able to show.

5. And finally, what can marketers learn from the Opower approach? Recently on your company blog there were some lesson learned shared on behavior change. What is your advice to marketers that want to use behavior change to their advantage?

I think marketers, advertisers and behavioral scientists have a lot to learn from each other.

Marketers have been implicitly using behavioral ideas for decades. The best ones would probably read a book like Nudge and recognize past campaigns in the recommendations and principles.

What I think behavioral science brings to marketing is a systematic framework for strategic thinking. It links concepts together. Not perfectly. But certainly better than the status quo in marketing.

Behavioral science offers a pathway to generate hypotheses faster, and a compass to direct testing and learning more coherently. Since context is critical, behavioral science demands that we constantly return to the data. Is our hypothesis working in this situation?

I also think behavioral scientists have plenty to learn from marketers. The power of branding is one that jumps out me. It’s easy to believe you aren’t swayed by some corporate logo or memorable tagline. But think of a brand as just another symbol.

Humans have been using and influencing each other with symbols since the beginning of time.

Behavioral scientists have carved out a place in the academy by following scientific methods and generating statistical evidence for behavioral theories. When putting these ideas practice, showing results gets you part of the way there.

It can tell you a direction to head, but not necessarily what the final destination looks like. How are talented non-behavioralists going to design a mobile payment app based on behavioral ideas X, Y, and Z plus a given technological limitation?

My own experience has been that devising great behavioral solutions requires both an emotional and an intellectual understanding of the idea. Advertisers and marketers excel at the former.

They can infuse behavioral science into a project without ever using its terms. If you’re working with a designer, a copywriter, or a software engineer on a strategy built around loss aversion, skip the jargon. It’s meaningless.

But has a soda machine ever eaten a dollar you put in it?

That flash of anger you felt. That’s loss aversion. Tap that memory and let’s solve this problem.

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