Renewables give utilities a fresh start on customer communications

By K Kaufmann

It is a truism of the utility industry that consumers only think about their power companies and how they themselves use electricity for a few minutes — or some expert say, seconds — per month: when they get their bills or when an unexpected outage turns off the lights.

The result, said panelists speaking at a recent daylong workshop, “Connecting Climate Change, Smart Grid and Consumer Attitudes” in Washington, D.C., is that average customers may not have a positive impression of their utility.

The “Climate Change, Smart Grid and Consumer Attitudes” workshop was part of the National Summit on Smart Grid and Climate Change. See summit presentations and articles here.

Creating a smart, resilient grid — one integrating advanced technologies with local, renewable energy and innovative business models — means utilities must develop communications strategies that help consumers build more positive connections, speakers at the workshop said. Those customers may also have new expectations about the range of energy choices and services they want, as well as how utilities should communicate with them.

“There’s no one model that works,” said Jamie Wimberly, CEO of the Distributed Energy Financial Group, a D.C.- based management consulting and energy financing firm.

“It’s about telling stories; people learn through stories. It’s about emotion, and this industry doesn’t do emotion very well,” he said. “Data is the comfort zone for most of the industry.”

The workshop focused mainly on getting consumer buy-in for energy efficiency and demand response programs through the use of market segmentation strategies. This approach centers on identifying the interests and motivations of different groups of customers and then targeting them with the most effective messages and media.

Check out To the Point’s presentation on market segmentation here.

With “customer engagement” becoming an increasingly hot topic in the industry, many of the ideas and strategies discussed at the event will likely have broader applications within individual utilities’ evolving business models.

The smart grid conundrum: Jennie Stephens, a professor of sustainability science and policy at the University of Vermont, talked about the conflicting tensions between centralization and decentralization inherent in the smart grid and its integration of renewable, distributed energy resources.

On the one hand, advanced grid technologies, such as smart meters or battery storage, may allow greater utility control but also open the door to more distributed generation.

With decentralization, “you get more customer engagement,” she said. “If people know where (their) energy comes from, it changes their relationship to the plug. Behaviors and expectations around energy need to change.”

Classifying customers: A number of studies in recent years have gauged consumers’ attitudes toward climate change, energy efficiency and new energy programs, each using slightly different models and terminology. Predictably, those customers more likely to be early adopters of green technology and programs also tend to be tech-savvy and more concerned about climate change.

But a common finding across many studies is that a larger segment of consumers are the ones that follow the early adopters — a more diverse group variously labeled “eco-rationals,” “early majority” or “pragmatics.” They are concerned about climate change but are mainly motivated by cost, comfort and value.

Source: To The Point

They also want things to be simple. Utilities should not present complicated menus of energy services, but “happy meal” style packages with “set it and forget it” options, said Seth Kiner, founder of the consulting firm Charlotte Street Advisors  and former vice president for customer programs and services at Southern California Edison.

Read DEFG’s latest survey on consumer attitudes about utilities here.

The message and the messenger: Strategies for finding the right messages and messengers for different consumer groups varied. Jill Vohr, a marketing and communications manager for the Energy Star program at the Environmental Protection Agency, said, “We try to imbue our brand with emotion that appeals to the most people.”

Joseph Laquatra, a professor in the Design and Environmental Analysis Department at Cornell University, favored flexible, community-based programs, often delivered by “trusted messengers.”

At the other end of the spectrum, Tom Matzzie, founder and CEO of Ethical Electric, a power company selling only renewable energy, markets to high-end, green-savvy consumers identified through sophisticated analysis of national statistics.

“We don’t have to talk to everyone,” said Matzzie, a recognized leader in online marketing whose web strategies have raised millions of dollars for progressive organizations. “It’s what the best data-driven marketers do and should be the model for energy services.”

Going mobile: According to Jenny Roehm, an energy manager at Schneider Electric, January of 2014 marked the first time that people spent more minutes connecting to the Internet from their phones and tablets than from laptop or desktop computers. With the trend likely to continue, she recommended that utilities focus on mobile platforms first for customer communications and then work back toward more traditional media, from desktops to direct mail.

“The associations when you’re holding a cell phone are nothing to do with utilities,” Matzzie said. “It’s communication with friends, family, music. Interact with customers through cell phones, you get positive associations. You don’t want the U.S. Postal Service to be the only association.”

Recognizing that some consumers still prefer paper or email, Nikolas Rechtiene, a customer strategy project manager at the Sacramento Municipal Utility District (SMUD), said his customers can choose their preferred form of communication with the utility. At the same time, he said, SMUD is planning a big push into mobile.

Targeted testing: Utilities’ traditional approaches to testing customer engagement and satisfaction may not be the best measures of success, Wimberly said. Alternatives might depend on how engagement is defined in the first place.

SMUD again is taking a flexible approach, Rechtiene said. The utility uses quarterly “perception trackers,” that query customers on their awareness and participation in certain programs, along with online panels of hundreds of customers to test out certain products and services.

Another common theme was the need for continuous communication and for testing that allows for what Matzzie called “fearless failures” as well as innovation and success.

“Try something with a few people and see how it works,” said Anthony Barnes, senior director of customer services for Energy Savvy, a company providing energy efficiency and demand management software for utilities. “But don’t do it randomly; define a test group. It’s important to have a testing mentality.”

K Kaufmann is the Solar Electric Power Association’s communication manager. She can be reached at [email protected].