Smart Grid, Smart City Strategic Policy & Regulatory Steering Committee
EnergyAustralia James Miller-Randle Retail Strategy Manager, Energy Services and Retail Strategy
28 July, 2014
Retail Trial Recap
3
Retail Trial Recap
The SGSC Customer Applications program was designed to test whether various smart-meter-related products can:
• Help reduce overall electricity usage
• Ease the load on the grid during peak demand periods
• Lower electricity costs
In particular, the Retail Trial was concerned with whether the products were:
1. Attractive to customers
2. Effective in engaging customers and reducing churn
3. Effective in helping customers manage and reduce electricity usage
4. Effective in reducing retailers’ exposure to extreme wholesale costs during peak demand periods
Trial Objectives
4
A total of twelve products were introduced as part of the Retail Trial, either as standalone tariffs or tariffs bundled with technology.
Tariff Type Tariff Description Standalone
Tariff PowerSmart
Monitor PowerSmart
Online
PowerSmart Online &
Home Control
$/kWh
PriceSmart Dynamic Peak Pricing
• Low rates during the year
• Higher rates apply during peak events
• Customer encouraged to curtail usage during events
SeasonSmart Seasonal Time of Use
• Seasonal time of use
• Lower peak rates in Spring/ Autumn
• Higher peak rates in Summer/Winter
BudgetSmart Top Up Reward
• Advance pay (top-up) product
• Customers receive a 12.5% discount off bill
• Account must remain in credit
FlowSmart Interruptible A/C
control
• Direct A/C load control
• A/C interrupted during events unless customer opts-out
• Customers earn up to $44 per event
Product Recap
5
2. Customer Case Studies
Real case studies talking about customers’ experience on the trial so far, explaining the changes they’ve been able to make in order to save.
Through reading about fellow trial participants, these case studies were designed to motivate the wider trial base to engage with their tariff and technology and stay involved in the trial.
Following customer acquisition, a structured customer communications and retention programme was implemented to drive engagement and retention.
1. Smart Grid, Smart City Spring newsletters.
Participating customers in the Smart Grid, Smart City trial received a quarterly newsletter:
• 3 versions of newsletters tailored to specific customer tariff
• 9 versions of cover letters, tailored to the customer’s technology option to drive use and activation
3. Early Issue Intervention
Resolving issues via verbatim comments:
• Customer dissatisfaction
• Product confusion
• Technology issues
4. Proactive Customer Saves
Tailored processes to manage different customer who:
• Move house
• Leave for another retailer
• Opt out of the trial
Key Engagement and Retention Activities
Retail Trial Findings
7
Trial Statistics
Customer Cancellations
Net Sales (Provisioned)
Trial Opt-Out
Technical Declines
Gross Sales
Final trial customers
Declined due to technology issues e.g. WiMAX coverage
Customer cancellations pre-provisioning
Customers provisioned with tariffs and/or technology
Includes trial opt-outs, move home and change of retailer
8,494
2,392
2,633
3,469
1,063
2,406
Total provisioned
Total customer opt-outs
Total customers on trial at
close
PriceSmart
1,823
458 (25%)
1,365 (75%)
Season-Smart
567
176 (31%)
391 (69%)
Budget-Smart
1,078
428 (40%)
650 (60%)
FlowSmart
1
1 (100%)
0 (0%)
TOTAL
3469
1063 (31%)
2406 (69%)
Trial Participation Funnel Product Breakdown
Of the 3,469 net sales, over two thirds of participants remained on the trial, with PriceSmart showing the highest retention of all the products.
Approximately 28% of sales were declined due to technical issues and 31% were cancelled prior to provisioning
However once on the trial, over two thirds of participants remained until trial closure
Trial opt-out reasons included no longer wanted to participate, move home and change of retailer, with move home accounting for around 25% of total trial opt-outs
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Both PriceSmart and BudgetSmart customers showed the high satisfaction levels and likelihood to recommend the tariff.
Source: ISF Customer Research – includes all unique respondents from 2013 and 2014 surveys
Product Satisfaction - Tariff
PriceSmart showed the highest proportion of very satisfied participants, although average satisfaction scores were on par with BudgetSmart
BudgetSmart showed the highest likelihood to recommend, although all tariffs performed strongly
Overall product satisfaction, by tariff type Likelihood to recommend, by tariff type
45%
46%
50%
40%
37%
35%
14%
17%
15%
0% 25% 50% 75% 100%
PriceSmart(n=822)
SeasonSmart(n=167)
BudgetSmart(n=374)
Proportion of respondents
High Med Low
23%
24%
26%
43%
46%
43%
3.7
3.8
3.8
1 2 3 4 5
0% 25% 50% 75% 100%
SeasonSmart(n=167)
BudgetSmart
(n=374)
PriceSmart(n=822)
Avearge score out of 5
Proportion of respondents
Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied
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Tariff and technology bundles proved the most empowering for customers and drove high levels of customer satisfaction.
Source: ISF Customer Research Report. Combined Retail and Network trial results
28%
27%
18%
45%
47%
41%
Tariff + Tech(n=1227)
Tariff only(n=583)
Tech only(n=452)
0% 25% 50% 75% 100%
Very Satisfied Satisfied Neutral Dissatisfied Very dissatified
Product Satisfaction - Combination
Overall product satisfaction, by product combination
Resulting in high levels of customer satisfaction
31%
20%
17%
44%
44%
44%
Tariff + Tech(n=1227)
Tariff only(n=583)
Tech only(n=452)
0% 25% 50% 75% 100%
Increase a lot Increased a little No impact Decreased a little Decreased a lot
Impact on ability to reduce bills, by product type
The combination of tariff and technology proved most powerful in customers’ perception of control
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Self-reported behavioural change translated into action, with nine out of the eleven retail trial products showing reductions in average consumption.
Over 80% of trial participants indicated they changed their consumption behaviour
This translated into actual consumption reductions in nine out of eleven retail trial products
Source: ISF Customer Research Report, p.76.; Frontier Analysis, p.46.
Consumption Reductions
Customer self-reported behaviour change by product Actual average consumption reduction by product
Budget Smart
Price Smart
Season Smart
65%
71%
71%
17%
11%
14%
18%
19%
15%
SeasonSmart(n=132)
BudgetSmart(n=282)
PriceSmart(n=611)
Reduced use* Shifted only Did nothing
Network Trial Products
11
PriceSmart customers showed the greatest peak reductions, however the depth of reductions decayed over time.
Source: Frontier Analysis report; ISF Customer Research Report
0.28
0.33
0.22
0.09 0.1
0.06
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Overall Retail Network
Pe
ak
e
ve
nt
savin
gs
Reported participating Reported not participating
Peak Event Reductions
Summary of load reduction for DPP events Actual average consumption reduction by product
Average consumption reductions of 39% were achieved on the retail trial, although some decay was observed over time.
The retail trial’s peak price tariff “stick” resulted in greater savings, but lower participation than the network peak rebate “carrot”
Date Start time
End time
kWh saving (%) R06
kWh saving (%) R07
kWh saving (%) R08
kWh saving (%) R09
26 Feb 13 14:00 16:00 43.7 44.0 44.0
22 Mar 13 14:30 18:30 49.7 43.5 48.3
28 Nov 13 15:00 19:00 36.5 33.9 37.5 44.9
9 Dec 13 15:00 18:00 36.9 35.1 40.8 52.7
10 Dec 13 15:30 17:30 35.1 34.8 43.4 49.1
16 Jan 14 15:30 18:30 36.0 38.8 45.1 48.1
29 Jan 14 16:00 19:00 31.2 35.0 39.5 38.2
30 Jan 14 16:00 19:00 34.2 29.6 32.7 35.4
13 Feb 14 14:00 18:00 27.0 23.9 31.4 33.6
Retail Trial Challenges & Learnings
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The innovative nature of the trial translated into a steep learning curve and some valuable lessons learned.
• Low engagement/ understanding
Customers often have limited understanding of the category
• Program objectives and sample design
Customer targeting, product design and sales process didn’t necessarily reflect a business as usual approach
• Suitable DPP days
Scarcity of high-temperature days for testing of DPP events
• Deployment issues
WiMAX coverge and space issues resulted in a significant volume of technical declines
• Technology issues
These included IHDs battery life issues and portal activation glitches
Lessons Learned
Retail Trial Challenges Lessons Learned
• Customer education is key
Adverse customer feedback still received ahead of peak events, despite frequent communication of energy saving tips
• AS4755 compliance
Lack of compliant air-conditioning stock will limit viability of DRED in short-to-medium term
• Managing churn through seasonal price changes
Some evidence of customer opt-out ahead of seasonal price rises requires reinforcing savings received
• Need for contact rules
Some BudgetSmart customers frustrated by the frequency of top-up messages
Thank You