The Energy Crisis: How can behavioural economics make consumers feel better about their options?

Like many households at the moment, I hesitantly opened my energy renewal offer. Despite the painful price increase, I was pleasantly surprised by the sensitivity, clear reasoning and empathy communicated by Octopus.

Their email explained what was happening to wholesale energy prices and what this meant for me. They offered me a loyalty tariff and promised it was cheaper than anything else but still encouraged me to look around at the market. This encouragement is important.

At the moment it can feel like a lot is out of our control as consumers, our choices are limited and our options aren’t as attractive as they used to be. Behavioural economics’ Reactance Theory says that when we feel our sense of freedom and choice is threatened in some way we experience a negative feeling and desire to act against it. By Octopus recommending I still look at competitors, it makes me feel I have choice and reduces my urge to reject their offer.

I‘m a habitual price seeker and usually spend a long time looking for the best deal, and while I didn’t accept Octopus’s offer without making a comparison, I did significantly reduce the time I usually spend looking.

Consumers still want to feel they are empowered to make a choice, even when the options are limited. While no consumer is happy to receive a bill increase, behavioural economics can help minimise the impact of a market-wide issue on your brand’s fortunes. For your customers, it can turn an unpalatable offer into a positive choice.