the busy executives guide to engaging consumers in saving energy: the promise of the smart grid

The Busy Executives Guide to Engaging Consumers in

Saving Energy: The Promise of the Smart Grid

Richard Feinberg, PhDPurdue University

Service Concepts Annual MeetingJune 17, 2010

Consumer Engagement is going to be the new metric for utility success

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Look for folder called Service Concepts

www.cfs.purdue.edu/richardfeinberg

Let’s review our beliefs…

How informed are our customers of energy policy? How informed are customers of “the smart grid”? How proactive are customers in managing electric use

today? Where do customers turn to today for energy

management advice? Where would they like to turn to? Where do customers “trust” ___, and where do they ____? What can ___ do to engage customers as partners in

demand management and environmental stewardship?

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Key Observations

It is good business to play a larger role in the social issues important

to your customers

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Key Observations

Increased bills poor economy color everything

Overestimate outages You are not green Do not understand their role in

increasing demand Believe they are doing the right

things Absolutely positively do not trust

you

Key Observations

The consumer gets it Day 1 roll out meets needs/wants Will hear about it Green is the new black Smart Grid is the 5th fuel Public Policy and Consumer

Demand for cost reductions will drive the SG

Key Observations

You must speak their language You cannot overpromise Website and call center must be

ready Near and long term strategy

needed

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What do consumers want

Save money Save money Save money Help the environment Personal environmental stewardship Wants to know how to do it Consumers want control Programs and devices have to be simple

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Day One Provides for wants and needs

Want help saving money… more than suggestions, want help… tools… personal solutions

Want to demystify why bills (usage) fluctuate… want help understanding things

Want to eliminate estimated bills Want to be able to see how much energy using mid-month (also, bill

forecasts…) Want more accurate/timely information pushed to them during outage

events Want programs that offset cost of energy-efficiency—rebates, buy-

downs, promotions Want to be educated on ways to “be more environmentally friendly” Want pricing plans that guarantee savings in exchange for behavior

change Want to see evidence that their actions result in positive change (usage,

bill, envt., standing amongst their peers)

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Early Studies

Smart Meter alone does not make consumer smart

Save 10% on bills Hard to shift to off-peak Increases CS and net promotion Feel good that they are being

responsible Tell 8+ average

Key, Cross-Cutting Observations

Green = dollars + carbon. Personal environmental stewardship is a key motivator for a cross-section of customer types… but never divorced from cost

Information. Customers want to know What to do to save money/energy, and How to do it (tools, not just suggestions)

New Media. Customers in all demos are open to opting-in to digital communication channels to receive / exchange information

Under-promise/over-deliver. Especially as relates to new pricing plans…

CSRs. Customers will rely heavily on customer service representatives for information… “Smart Advisory Help Desk”

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Key Messaging Items

We care… thank you for being our customer We wouldn’t ask you to act unless we ourselves were

doing it too… and we are Energy costs are rising globally… we’re doing something

to help you We are working to contain energy costs We are being innovative We are part of a national smart grid movement You are part of a community effort; “join the crowd, be a

champion…” We are getting proactive

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How can you engage consumers

1. Using the principles of social influence that have stood the test of time

2. Designing the attributes of the service/product that compels consumers

3. Popular Books4. Behavioral S-R Theory

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Principles of social influence

Liking Reciprocity Social validation- normative influence Authority

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SG design issues

Relative advantage Compatibility with values Perceived risk- financial, social,

psychological, physical Trialability Complexity Observability

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Popular Books

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Behavioral S-R Theory- Stimulus response Nothing is important but the

behavior Behavior followed by reward is

likely to be repeated Behavior followed by punishment is

likely to be diminished

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Should you Smart Grid ?

Inevitable You can let the Big Dogs do it first It will lead you places that you

cannot completely understand Consumers will engage … The time to start creating the trust

needed is now..not 10 years from now

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Richard Feinbergxdj1@purdue.edu

765-494-8301

www.cfs.purdue.edu/richardfeinbergFolder called – Service Concepts

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