Posted by : Allison Eckelkamp | On : October 28, 2011

J.D. Power and Associates released a report this week, suggesting that targeting customers based on behavioral segments is key to “unlocking interest and engagement.” This is similar to a key theme in the Smart Grid Consumer Collaborative report, also released this week, asserting that “attitudinal” segmentation is key.

Frankly, it’s hard to think that any business or organization would undergo a campaign without at least some understanding of their customers — an understanding deeper than whether or not they have a pool pump or central air.

J.D. Power’s survey found that wide variations in customer knowledge and behavior will present a particular challenge for utilities as they look to garner support for smart grid and smart meter deployments. (Seems somewhat obvious).

Six behavioral segments were identified in the study, which was “based on the types of smart energy activities and degree of control that diverse customer populations will undertake to manage their energy consumption, costs, and environmental impacts.”

Segments identified in the report include the “innovator,” who is willing to pay a significant price to realize environmental and financial benefits; the “automate” segment, which is willing to authorize the utility to take control of a thermostat in exchange for savings; the “indifferent” segment, whose members are not motivated to take any energy management actions; and more.

The study suggests that utilities should undertake engagement strategies that vary by customer segment so they can optimize acceptance and satisfaction with various smart grid and smart energy technologies.  But this goes beyond just how the utility communicates with the customer segments and includes the types of services and incentives that are offered.

“While customers in certain behavioral segments are keenly interested in knowing the amount of energy they use or how much money they can save by taking steps to conserve, customers in other segments want the opportunity to earn points for reducing energy use and to redeem their points for cash or merchandise,” according to J.D. Power.

I’m certain that by reading the full report, utilities will find themselves somewhat enlightened. However, I would highly encourage individual utilities to undertake their own research into behavioral segments for their respective service territories.  Surely there will be some consistencies from one region to the next, but I’m sure the variation would be significant enough to merit utility-specific research.

Photo courtesey of thanunkorn: http://www.freedigitalphotos.net/images/view_photog.php?photogid=2352



Posted by : Allison Eckelkamp | On : October 26, 2011

The Smart Grid Consumer Collaborative (SGCC) released on Monday its report titled “Excellence in Consumer Engagement,” based on the analysis of efforts by U.S. organizations and utilities with consumer-facing smart grid programs. As a communicator, I found myself constantly nodding my head in agreement with what I considered to be a recurring theme within the report: simplicity and common sense win.

With 10 major findings, the report left me with only a few “aha” moments, but it was a great read and wonderful reminder that getting back to communications and marketing basics might have been the recipe for successful consumer engagement all along.

Here are a few of the points I found most interesting:

The good news – utilities can handle most complaints, if they plan ahead
This is a re-assuring concept. The report stated that “utilities with customer-centric engagement programs and complaint resolution processes have responded to customer concerns and complaints effectively.”

Writers of the report encouraged utilities to undertake engagement and messaging strategies prior to the beginning of deployment and address major complaints “on a personal level.” Makes sense.  Why broadcast the negative sentiments of a vocal minority to the silent (and often complacent) majority?

Don’t over-promise — manage expectations
The second major theme in the report felt to me like common sense – “staged messaging helps manage expectations.” The report states, “Nearly all successful AMI deployments have leveraged staged messaging programs to set expectations that can be met promptly, focusing messages on deployment logistics and near-term benefits that are immediately relevant to consumers.”

Communicating near-term benefits – rather than future looking, pie-in-the-sky sentiments – makes sense to me.

Unfortunately, utilities are not alone in their efforts to reach consumers and don’t have complete control over the message. Smart grid vendors, home-energy management companies, and other interest groups often target consumers with big forward-looking promises that could conflict with this staged-message philosophy.

I’d like to see the entire industry get on board with promoting the near-term realities of smart grid. In the industry’s early excitement, many pre-mature promises were made (by the smart grid community, at large).  But, that’s marketing.

An innovative approach – leveraging employees as smart grid ambassadors
While the employee-ambassador approach to communications has been used by consumer products companies for some time, I would imagine it’s not used very often among utilities.

But the SGCC study found that “utilities that educate their employees about their smart grid activities present a core consistent message and are better prepared to handle customer complaints.”

CenterPoint uses this approach. Its “employee ambassador” program engages employees with an online smart grid course, equipping them to act as “resources and advocates in their community,” according to the study. An impressive 18 percent of employees have become ambassadors to date.

Of all the themes and findings in this report, I think this promises to be the biggest game changer – especially when you consider the potential reach employees have today, within both their in-person and social networks.

Defying intuition – bigger incentives do not mean greater enrollment
The report states that “while incentives help drive program enrollment, small incentives can be sufficient to pique consumer interest.”  The Arizona Public Service Company found that increasing a one-time direct load control (DLC) program incentive from $25 to $50 would only improve enrollment by ~25 percent.

Given shrinking budgets across the board, this should certainly be good news.

Give it some attitude – segmentation is key
Any good marketing plan includes audience segmentation. While many utilities have targeted customer groups – like those with central air or smart meters – there has been little segmentation done on the basis of demographics or attitudes for use in marketing campaigns, according to the report.  However, the SGCC report suggests that this method of segmentation could improve smart grid program performance. Common (marketing) sense suggests SGCC is right.

The remaining six
The remaining six findings can be found in detail in SGCC’s report, but are bulleted below:

  • “Fostering goodwill establishes a foundation for success”
  • “Messages about saving money are applicable to all customers”
  • “Simplicity facilitates program enrollment”
  • “Urgency and purpose spur customers to act”
  • “Utility channels can transition from service to sales”

There’s no question that engagement starts with a solid two-way communications strategy based on a clear understanding of who your consumers are and what motivates them to act. It’s promising to see so many successful undertakings highlighted in this report.

You can download the full report on SGCC’s website. Just an FYI – if you’re printing it to read on an airplane, the last 10 pages are bibliography and end notes.  You might want to save the paper.


Image courtesy of Photostock: http://www.freedigitalphotos.net/images/view_photog.php?photogid=2125