by Patty Durand, President & CEO, Smart Energy Consumer Collaborative
Smart meter deployments have grown significantly over the past 10 years. According to a projection from The Institute for Electric Innovation, total smart meter deployments were expected to reach 76 meters by the end of 2017 (covering about 60 percent of U.S. households) and 90 million by 2020.
With this expansion in Advanced Metering Infrastructure (AMI), the amount of available energy data (particularly interval data) has similarly grown considerably. The data that is now available to electricity providers has delivered more accurate bills to consumers and provided more reliable forecasts and outage alerts. For the electric utility itself, the more granular data has improved operations by providing self-healing grid functionality that allows faster restoration of power and insight that helps utilities identify theft.
Although there have already been improvements to utility operations and customer experience, the trove of energy usage data now available has also opened up numerous opportunities for developing consumer programs and services that can improve efficiency, save energy and increase convenience, to name a few potential benefits.
What do consumers want from analytics-driven programs?
To assess residential consumers’ interests, motivations and priorities regarding analytics-driven energy programs, the Smart Energy Consumer Collaborative (SECC) recently conducted a three-part research project that resulted in the “Data Analytics: Unlocking the Consumer Benefits” report.
The research began with a three-day online discussion with 25 consumers, representing a mix of ages, regions and energy literacies, during which consumers revealed that they ultimately want to know how energy investments and changes to their energy behaviors will benefit them personally. Many expressed frustration with not understanding how their efforts impacted their energy bill or the environment. With this knowledge in hand, SECC convened a forum of industry stakeholders – electricity providers, tech companies and consumer advocates – who provided perspectives on data availability and technology options in the market today that would benefit consumers and their expressed concerns.
Finally, utilizing the insights gained from the two qualitative discussions, SECC then conducted a nationwide consumer survey with 1,698 respondents who were involved in energy decisions in their homes. These respondents mirrored the U.S. Census statistics for age, gender, region, education and ethnicity.
In the survey, SECC tested consumers’ interest in three energy-saving programs that rely heavily on data analytics and also asked questions about data privacy and sharing. While the programs tested were theoretical for the purposes of the research, they closely track what consumers told us they were looking for in terms of information or empowerment.
Based on consumers’ responses to the programs, we developed several conclusions for program designers, data analysts and marketing teams at electricity providers to utilize to boost engagement in analytics-driven programs. Here are three key recommendations:
1) Target consumers who already expect and are accustomed to data sharing and analytics in other aspects of their lives.
Consumers do not speak with a singular voice about data sharing with third parties, but there are subgroups of Americans who not only trust providers to manage their data, but also expect analysis to be commonplace and to benefit them. Younger consumers, particularly millennials, are the most likely to be interested in new energy-saving concepts that depend on analytical and data-sharing capabilities. Green Champions, an SECC consumer segment that tends to be more engaged in their energy usage, are similarly highly interested in the energy-saving concepts tested.
Online retailers, banks and other internet companies (think Netflix, Amazon and Google) have already conditioned consumers to expect personalization based on analysis and information sharing, and the “Data Analytics” research confirms that many consumers want this type of assistance and service. This means the inner workings of the three tested program concepts would be welcome additions in an area that has not often offered this type of convenience. Electricity providers can identify receptive consumers through customer segmentation and third-party data sources.
2) Start with offers consumers can easily understand and design them for ease of use.
While all three concepts tested in the research were interesting to the majority of consumers, the best-performing program was Replace & Save, a program that helps consumers understand the monthly cost savings potential if they were to replace older appliances in their home with newer, energy-efficient ones. Consumers likely favor this program as it’s straightforward and easy to understand when and how to use this program.
In addition, the Replace & Save program directly answers two specific pain points noted by consumers in the qualitative research: “I only receive general energy-saving tips I already know. I do not receive new information that is specific to me” and “I need more information on the exact cost-benefit to upgrading appliances or other energy-saving upgrades. I want to know the total upfront costs and exactly how much I will save each month.”
In the “Data Analytics” research, consumers often stated that energy-saving programs or rebates are difficult to take advantage of and that similarly it’s often difficult to understand how much they will save each month when they change their habits related to energy use. By designing programs with a clearly stated return-on-investment for consumers and streamlined enrollment, electricity providers can maximize program interest and participation.
3) Use actionable information as an entry-level, foundational feature.
As seen with each of the three program concepts tested in this research, consumers are interested by the opportunity to learn something specific about their personal use of energy. Turning detailed energy usage data into actionable information for consumers is an effective way to engage consumers in energy efficiency, and actionable information related to appliance use, rate plans and rebates should be the first element of any data analytics-based program design.
Actionable information allows marketing teams to create personalized invitations targeting specific consumer segments emphasizing messages that will resonate. Past consumer research has shown that, for the most part, consumers want to retain choice and control of their home energy usage, and messaging that emphasizes how a program helps them achieve both priorities is much more likely to garner a better response.
Conclusion
Based on SECC’s previous consumer research, including the “Customer Experience & Expectations” report from 2017, it’s been established that today’s residential energy customers – particularly the millennial generation – look to companies like Amazon, Apple and Google for benchmarks in how they relate to their electricity providers.
These companies all utilize analytics heavily in their product offerings and services, and consumers are coming to expect similar types of offerings from electricity providers. In fact, the “Data Analytics” report found that about three-quarters of U.S. consumers already expect that their electricity provider is routinely analyzing their account data to help them find ways to conserve energy.
In an increasingly post-AMI world, electricity providers are aiming to make the most of their significant investments in smart meters and other smart grid updates by developing consumer programs and services that build on the capabilities of these technologies. By understanding the motivating factors for why consumers participate in or are interested in analytics-driven energy programs and services, electricity providers can design offerings that align with these customer interests, thereby maximizing customer engagement and boosting customer satisfaction.
Patty Durand is the president and CEO of the Smart Energy Consumer Collaborative, a nonprofit organization that has been researching the needs of energy customers in the U.S. since 2011.
