To alter consumer behavior, some companies reach out to academics

At Arlington-based Opower, success is measured by the amount of energy homeowners conserve. But the company’s software, which allows consumers to track their usage, cannot yield that result on its own.

The homeowners themselves have to flip the switch.

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The company has sought to bridge that disconnect between product and intended result with the help of behavioral psychologists, whose research helps break down why people are motivated to make certain decisions.

The company, which has tripled in size since last spring, leans on a two-member scientific advisory board that acts as a supplement to its board of directors. While the latter advises on issues of money and company direction, the former offers guidance on product development and consumer outreach.

“I think we maybe are an exceptional case, but our bottom line is very, very dependent on our ability to achieve this public good, which is to reduce energy consumption,” said president and co-founder Alex Laskey. “So there are a lot of psychologists and economists who share that interest, who are themselves thinking about how to achieve this public good.”

The applications of behavioral psychology and economics in business are varied, though a measure of how widely they are applied is difficult to come by. At least one other promising start-up in the District, HelloWallet, also makes use of the discipline. Its soon-to-be-released software encourages financial responsibility.

The application of psychology and consumer behavior in many ways runs deeper than just advertising, where executives have long sought the right images, words or features to attract buyers. Psychologists played an integral role in both companies’ inception and the software they’ve built.

“This is among the richest fields in the social sciences,” Laskey said. “This is where some of the best economists and psychologists are working, so there is a tremendous amount of new literature that’s being produced. We’re not on top of all of it, but our advisers are. It’s their job to be.”

Brainpower in business

HelloWallet founder and chief executive Matt Fellowes conceived the company after his work as a personal finance expert and research fellow at the Brookings Institution. So in many ways, research is the foundation of the business.

Chief Technology Officer Steve Wendel now works most directly with the team of behavioral economists that the company has recruited as it designs a product to improve financial literacy while motivating people to make better spending decisions.

“In the end, our business is based on giving quality advice that actually helps people meet their goals, so everything we’re doing is toward that [end],” Wendel said. “And the advisory board is helping us give better advice.”

The company’s advisers — it has volunteers as well as a contract with researchers at Rand Corp. — also dig into the product enough to offer seemingly minor suggestions that could help influence users. For example, researchers found people are more motivated to put money in a savings account marked “college fund” if it’s personalized with the name and photo of their college-bound child.