Episode 8: The intersection of behavioural science, the water sector, and utilities more broadly

Future of Utilities Podcast 

The intersection of behavioural science, the water sector, and utilities more broadly 

This conversation is brought to you by Modulr, the payments automation platform. 

Lindley Gooden: Hello, I’m Lindley Gooden, welcome to the Future of Utilities podcast, great to have you with us. Let’s talk about the intersection between behavioural economics and the water industry – how does that work? We’re about to find out, with Armenak Antinyan, great to have you with us from Thames Water. Armenak, just tell us who you are and what you do. 

Armenak Antinyan: Hello, everyone, thank you very much. I’m Armenak Antinyan, I’m the head of behavioural economics at Thames Water. My day job is to study our customers, try to understand why they behave in certain ways, why they don’t behave in certain ways they should – and, most importantly, try to change that behaviour through interventions. 

Lindley Gooden: Brilliant. So before we find out how you found yourself at this intersection of behavioural science and water, just explain the key tenets of the behavioural economics of water. 

Armenak Antinyan: Okay, so let’s speak a bit about behavioural economics. Traditional economics assumes individuals are rational – that when they’re making decisions, they try to maximise their utility, and they do things that are really good for them. In reality, life is a bit more complex. Decisions aren’t made in a vacuum. There are environmental, social and psychological reasons affecting behaviour that are involuntary rather than voluntary, and these factors really affect how we behave. 

One example: if we’re filling in a form that’s too complex, even if we need the form, we may abandon it. Or if we have a dishwasher that isn’t water-efficient, we keep using it even though replacing it could save us money in the future. These types of behaviour are very natural for people, and behavioural economics tries to solve this kind of problem and improve behaviour, both for individuals and for organisations. 

Lindley Gooden: So it’s a more complex system – it’s not always voluntary, you can’t make conscious choices every day of the week, sometimes things will happen and you’ll respond in ways that may be less easy to predict. So how did you find yourself in this area? 

Armenak Antinyan: I’m coming from an academic background – I was an economics professor at Cardiff Business School before this, and before that I was working in China, again as a professor of economics. During my research, I was always at the intersection of academia and the real world. I wanted to solve real-world problems for people and improve their lives through my research. 

I’ve done a number of interventions and studies with the Armenian government – that’s where I’m from – and with the UN in Armenia, and in countries like Kyrgyzstan, Tajikistan, Uzbekistan, Croatia and so on. I even worked in China with the Chinese tax authorities. I’ve worked on questions like how to increase cancer screening uptake, how to convince people to do more health checkups, how to convince people to pay more taxes, how to convince people to reduce plastic consumption. Working in the water industry, or utilities more generally, feels like an organic continuation of that work, because I see a lot of room for behavioural science in utilities and the water sector – and that’s why I’m here, and why I want to be part of this. 

When we talk about behavioural science in utilities and the water sector specifically, quite often people only think about water efficiency, but it’s more complex than that. There are far more questions to study – from affordability support to pollution reporting, even cybersecurity within organisations, health and wellbeing, and so on. 

Lindley Gooden: My next question would have been why this matters right now – but I think you’ve already answered that, with the real-world applications and the complex picture we live in every day, rather than the simplistic view traditional economics might have taken. So, why do you think right now we should be talking about our behaviours, understanding what we as consumers want, and how water companies can help us make decisions that will help us down the line? 

Armenak Antinyan: I think right now is quite the moment, because there are significant transformations happening in the water sector and utilities – technological updates and improvements – and these can help us, as intervention designers, understand our customers better. Just one example: if we roll out smart meters and more customers have them, we can understand their behaviour better, and understanding their behaviour better, we can tailor interventions to them. For instance, if there’s a leak at a customer’s property, we can send a notification, and the customer can try to solve the problem if it’s on their side. 

In a nutshell, these technological advancements, and the data they generate, allow us to do much more than we could in the past – designing really tailored interventions for our customers, and making the experience of interacting with utilities more customer-centric. 

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Lindley Gooden: I don’t know what our audience here thinks – I’m going to look for faces and expressions. Traditional media campaigns aren’t really cutting it, would you agree? Am I getting some smiles? Yes, I’m getting some nods here in the audience. They don’t quite cut it, they don’t really touch us, they don’t make us feel much, they don’t necessarily increase trust in our water companies. Why does behavioural science offer something different? What does that look like – how do we make, I’ll say, better decisions? That sounds a bit like education, but how do we make healthier decisions? 

Armenak Antinyan: Before talking about awareness-raising campaigns as a means to reduce water demand, let’s broaden the picture a bit and talk about customer-side, demand-side interventions that water companies can make, and how behavioural science can help – then we can come back to awareness-raising, because it’s not only about that. 

When I think about demand-side interventions, I categorise them into three groups. First, interventions using technology – smart meters, water-efficient appliances, and so on. Second, interventions built around audits, whether online or offline. An offline audit is understanding whether a customer is using too much water, scheduling an appointment, checking whether appliances are working properly, whether there’s a leak at home. A similar thing can be done online, with a customer just answering a few questions to see where the water waste is and how it can be fixed. 

Behavioural science feeds into these two categories most directly. For instance, we can use it to understand how to increase smart meter rollout – by understanding why customers do or don’t like smart meters, we can tailor our interventions, taking the customer’s perspective into account. 

Lindley Gooden: How granular can you be? How do you take in that response? Because you need to know where the bottlenecks are, where the problems are. 

Armenak Antinyan: Usually it would work like this: you’d organise a focus group or interviews with a group of customers, trying to understand their perspective on smart meters. You take that perspective into account, and consult the literature – scientific studies, or case studies from other companies or consultancies. You bring that literature and the customer perspective together and come up with an intervention. And, most importantly, you have to test whether the intervention works, because behaviour is often context-specific – what works with Thames Water customers might not apply to customers at other water companies, or in other countries. 

That’s the technology and audit side. Then there’s awareness-raising, and awareness-raising alone, I think, isn’t really going to do the job on its own – it should be there, but it assumes a rational model of the customer, where they see a poster, understand from it that their behaviour isn’t environmentally friendly, and change it afterwards. In reality, a number of things can go wrong in that simple interaction. 

First, the customer might have information gaps – they might not really know what their actual water consumption is, or be overconfident that they’re using much less than they do. Second, they might not think the poster is for them at all – they attribute it to other people, which means they don’t act on it. Third, there can be a complex relationship between a customer and their water company: a customer might ask why they should reduce their consumption if they don’t understand what the water company itself is doing to save water. From that perspective, it’s important to create a reciprocal relationship – if a water company is asking a customer to reduce consumption, it should also emphasise what it’s doing itself. Right now, for instance, the sector is investing a lot of money into improving infrastructure and fixing leaks, and emphasising that can help build that relationship. Those are just a few examples of what can go wrong in a basic poster-customer relationship. 

Lindley Gooden: It’s interesting, isn’t it, because in parallel, it feels like you need to connect what people feel on the outside – worried about bills, worried about climate, things they genuinely feel – with what a water company is. There’s a distrust, or a separation, between the two, and connecting them is what makes people feel better about it. And I’m hoping – I’m hoping you’re a TikTok star, that’s what I’m hoping for in social media. I’m hoping that’s what you do, and people feel better about the business because you’re out there doing dances. But what does social media actually tell us about the different demographics and different ages, and what they feel about this debate? Is there anything there you can show us from social media responses? 

Armenak Antinyan: As a scientist, I would consider social media, but I wouldn’t base my decisions on it alone, for one basic reason: we usually see people who are very satisfied with a company on social media, and people who are very dissatisfied with a company on social media. The bulk in the middle, who are doing okay with things, aren’t always active in expressing an opinion – so from that perspective, social media can be a bit misleading, and can give a somewhat false picture of what’s going right or wrong. 

What we’d usually look at instead is what our customers actually think. We have a brand tracking survey that looks at what customers think about the business generally – that’s not run by my team, it’s run by the business as a whole. My team and the marketing team have also initiated a regular survey, trying to understand customer opinion on a few important points, like pollution and water consumption, and how that’s changing over time. We run this survey twice a year, and we’ve done it for a few years now, to see whether the interventions we’re making are shifting behaviour and attitudes in the long run. 

We’re also trying to experiment with our customers directly, to see what works and what doesn’t. You made a good point earlier – some customers worry about bills, some worry about the environment. There are multiple perspectives customers hold about water consumption and efficiency, and the most important thing for us as water companies is understanding what the prevailing viewpoint actually is. If we have to run a one-size-fits-all awareness campaign, should it lead with environmental concern, or financial concern? Should we tell customers to book an audit because saving water helps the environment, or because it reduces their bill? These are the kinds of questions experimenting can help us answer. 

Or you subtly embed both into something that makes people feel good about what they can do and the power they have – because guilt is never a great convincer. It makes people switch off. You need to bring it in subtly. 

Lindley Gooden: We’re coming towards the end of this, but in 2026 we’re about to hit what looks like a hot summer in the UK, and I wonder – when the temperature rises, and it feels like the real value is in that grey area in the middle, not the extremes you see on social media – how do you start to have a valuable conversation with people in the run-up to a very hot summer? 

Armenak Antinyan: We run regular water efficiency campaigns during summer – active on social media, radio, TV, and we reach people via email as well. That’s all doing a good job of raising awareness and trying to convince people to use less water. 

Lindley Gooden: And what’s changed with the establishment of the behavioural economics team, two or three years ago? Any early signs of what might be working? 

Armenak Antinyan: We’re now actively experimenting within those water efficiency campaigns, trying to understand what type of communication, what type of outreach, actually works with customers. I can tell you about two experiments we’ve run in the last two years. 

One was a large-scale email experiment, trying to understand how we can convince customers to use our online water audits – we have a water-saving calculator. Customers go online, answer a few questions, and get a report showing where their water waste is – and, most importantly, we wanted to know whether that would actually change their water consumption. 

We focused on smart-metered customers, because we could monitor their consumption directly, and divided 400,000 customer households into groups. One group received no email – our control group. One group received just a standard marketing email. The rest received a behavioural email with a clear call to action and other deliberate design choices. One group’s email was framed around environmental concern – complete the calculator and help the environment. Another was framed around money – complete it, reduce your consumption, save on your bill. A third was framed around future generations – saving water helps generations to come. 

Guess which one worked best. 

Lindley Gooden: You tell me. 

Armenak Antinyan: It was money. Money was the most convincing motivator for getting people to complete the online audit, followed by the environment. So in last year’s campaign, we merged those two motives into one email – telling customers about both the importance of the environment and the importance of saving money. 

What we’re doing next is trying to make these interventions more sophisticated. The experiment I’ve described was still one-size-fits-all – we sent the same email to everyone in a given group. But within a group of people receiving, say, a financial email, there will be some motivated by the environment and some by money – we were only checking what works on average across that group. This year, we want to make the intervention properly tailored. Our data team has come up with a way of segmenting customers into different groups using data science, and we’re now trying to test whether tailoring the message about completing the calculator and saving water to a specific segment is more powerful than simply sending one-size-fits-all emails in bulk. That should help us understand what we can do going forward. 

Lindley Gooden: Well, I’ll be interested to know what letter hits my mat this summer – I’ll report back to you, Armenak. Thank you very much for joining us, wonderful to have you here, and thank you for joining us in the floor as well. And for now, that’s it from the Future of Utilities podcast.