Everything you thought you knew about what customers want is ancient history

Customers today have made it clear that they want their energy providers to be part of the decarbonization solution. But trying to simultaneously address imperatives of affordability and decarbonization presents today’s energy providers with a conundrum. These are currently competing forces: energy providers must engage their customers in being part of a clean energy future, but in a manner that customer have access to and can afford—and accelerating decarbonization is not cheap. What can you, as an energy provider, offer in the short term, and how are you planning for longer-term outcomes? How do you reconcile the affordability challenges with people’s needs to live more sustainably? And how do you make it financially sustainable for your organization?

Scale up behavioral energy efficiency programs

Energy efficiency programs are a great place to start. A study released late last year by The Brattle Group identified the reduction potential of 180 million metric tons of emissions by 2040 through utility customer actions alone, with residential electric and gas energy efficiency having the greatest near-term impact in reducing emissions between now and 2030.

 A team of ex-utility commissioners at The Analysis Group recently studied the relative effectiveness of different energy efficiency (EE) programs in delivering the highest greenhouse gas reduction value. It evaluated program designs and policies of Behavioral Energy Efficiency (BEE) and Structural Energy Efficiency (SEE) programs, and found that:

• Behavioral programs deliver reductions in carbon dioxide emissions and avoided damages from climate change for less than one quarter the cost of structural programs.
• Continued administration of behavioral programs achieves the same amount of carbon dioxide emission reductions as structural programs, but five times faster.
• In an analysis of EE programs in Illinois, Maryland and Massachusetts, behavioral programs reached 10 times more customers than structural programs during a given year.

Behavioral programs dramatically accelerate adoption of the structural programs that deliver deep per-household bill savings and emissions reductions. In order to meet climate goals, policymakers and energy providers need to pursue aggressive and coordinated implementation of both SEE and BEE.

However, not all BEE programs are created equal. Designing the right programs and utilizing the right technology are essential for success.

Increase effective communication with AI-powered insights for customers

The biggest hurdle will be attaining sufficient trust with customers on the challenges of today—affordability and reliability of service—in order to earn the right to engage on the more involved topics of the future. And that trust is gained by flawless execution of service and clear, personalized, value-adding communications via the individual’s channel of choice.

To make the all-important shift from the role of energy provider to that of energy partner, more must be done to engage and personalize interactions for all customer types. This means investment in value-added communications and personalized customer experience modules, served up proactively on the fly, and reactively when customers reach out to you.  It also means engaging with customers through the channels they prefer including mobile text messages, chatbots, videos and social channels.

In 2021, Oracle surveyed more than 4,500 energy consumers globally and found that:

• 52 percent are interested in a chatbot that would help them view and understand their bills,
• 33 percent are interested in receiving short videos on their energy usage and tips for reducing it, and
• 87 percent are interested in receiving monthly online home energy reports.

Many energy providers are responding to increased customer expectations by expanding their communication channels, digitizing basic services, and creating more self-service options. Others are going further and applying the latest innovations in analytics, user experience design, and machine learning to build functionally richer and more automated customer engagement.

For example, by watching and understanding customer behavior patterns while a customer searches a utility’s website, you can apply machine learning to serve up the “next best screen” that may provide the intelligence the consumer is seeking or a proposed next step. Couple that with intelligent chatbots that can answer questions in real time using natural language, and you can increase satisfaction while reducing expensive call center interactions.

Customer engagement technologies leveraging machine learning can also proactively deliver personalized high-bill alerts and offer energy-saving suggestions. The automation of these types of tasks with powerful user experience (UX) design is creating data-driven customer experiences that support the customer in changing their behavior or signing up for a product or program that will help them achieve better outcomes (lowering their bill, or their carbon footprint, etc.) while also helping you achieve your intended outcomes (sustainability, lower cost to serve, etc.).

As technology and the utilities industry evolves, so too are the needs and expectations of utility customers. The agility to be able to deliver personalized customer outcomes over the communication channel of each customer’s choice is a necessity for today’s energy partner.

Focus on generational strategies

It’s important to remember that consumers from different generations have different needs, to acknowledge those differences, and to design strategies that directly address those needs.

For example, despite being the hardest hit during COVID-19 in terms of being able to pay their energy bills, 84 percent of Gen Zs and 73 percent of Millennials told us they are open to higher bills if it means greener energy sources. Further, 55 percent of Gen Zs and 48 percent of Millennial customers intend to invest in their own renewable generation within the next five years. These younger generations are going to be ambassadors for helping the energy industry achieve its decarbonization targets.

To be an invested partner with these customers in their decarbonization goals, you will need to provide:

• special programs, campaigns, or new products and services to support their sustainability goals
• engagement strategies dedicated to these younger customers that use behavioral science and language that speaks to them (rather than their parents or grandparents)
• specific programs and services that target first-time customers, in order to engender a long-term relationship

To succeed in these efforts, you will need to communicate with these younger customers where they want to communicate (which is not necessarily on the typical communication channels utilities have used for years). Our survey found Gen Z prefers mobile apps while Boomers would rather use websites.  The key to successful communication and engagement is recognizing how different customers want to engage and offering tools that will delight customers of today and the emerging digital natives of the future.

Take an enterprise platform approach to the customer experience

An enterprise platform approach enables you to use more of your data and derive more actionable insights using demographics, usage data, behavioral data and psychographic factors in order to deliver a more personalized program experience for your customers.

This type of analysis allows you to:

• Design highly specific customer segments and targeted marketing campaigns, and
• Categorize customers by their energy habits to use that information to generate insights and provide relevant programs during “moments that matter.” These are critical moments in the customer lifecycle—such as moving into a new home—when you have the greatest opportunity to increase customer satisfaction, reduce customer service costs and introduce new services.

Without these ingredients, you can end up with inflexible point solutions that deliver stale customer experiences.

To begin to offer highly personalized recommendations in programs and services in a unified manner, you must be able to combine and analyze the following data sources:

• customer data with demographic data (age, gender, income, etc.),
• electricity usage data from its meter data management system, and
• call center and billing data on a common enterprise platform

Co-innovate with new and established industry players...and customers

If you want to do more than simply provide and maintain the backbone infrastructure for the energy system of tomorrow, you will need to partner not only with your customers—the prosumers of the future—but also to increasingly co-innovate with both new and established technology partners to create the sustainable, affordable energy grid of the future.

In an industry that is going through such a wild period of change, it is not unreasonable to say that the customers of the future don’t even exist yet.  A few early adopters are showing the masses what the future of energy looks like.

It will be the bold players that invest in those emerging markets and establish a leading position as these fringe value networks become the mainstream. Whether the incumbent energy companies of today will join the early movers, only history will tell us.