Efforts to make customer engagement more effective are expanding. That engagement is a crucial response to the customer demand driving the power sector's accelerated shift toward renewables and distributed generation, leaders in the industry have found. Higher levels of engagement also allow utilities to align their interests with their customers.
"For utilities that want to promote smart technologies that shift usage, lower peak demand and lower customer costs, what works is targeting specific customer segments with offerings that address their motivations," Nathan Shannon, deputy director of Smart Energy Consumer Collaborative (SECC), told Utility Dive. "Waiting for them to come to the utility does not work."
Personalized, targeted survey insights give utilities a better understanding of their customers, and are crucial to utility tasks such as balancing peak demand management with customer costs.
SECC customer focus groups have identified customer segments and ways they can be effectively reached. "Mass marketing to the general population gets very little results," Shannon said.
Segmentation resembles what Netflix calls "clustering," according to utility data analytics company Bidgely's Marketing VP Leesa Lee, and is one of three Netflix customer engagement practices that Bidgely has adapted for utilities. The other two practices are looking beyond customers' stated preferences to the preferences revealed by their behaviors and making customer visuals appealing.
"Questions about customer engagement are new and utilities are trying to find the winning equation."
![](https://d12v9rtnomnebu.cloudfront.net/diveimages/corporate_site/teampage/square_profiles/placeholder-200.png)
Jeff Hamel
Director of global energy and enterprise partnerships, Google
That is why utility website design is one critical aspect of utility engagement, according to a survey of energy industry executives by SECC and the Smart Electric Power Alliance (SEPA). Over half (56%) of interviewees said ease of use is the most important portal feature, the highest agreeing score by more than 30%.
The Duke Energy and Sacramento Municipal Utility District (SMUD) platforms demonstrate many of the best practices of customer engagement, SEPA senior research analyst Sharon Thomas told Utility Dive. But "different customers are responsive to different communications. Digitally-savvy people like everything online, but others still prefer a paper format."
"Questions about customer engagement are new and utilities are trying to find the winning equation," Google's director of global energy and enterprise partnerships, Jeff Hamel, told Utility Dive. Emerging strategies focus on online access to bill payment and customer support, as well as delivering energy usage insights as engagement points.
To achieve their own objectives, utilities need engaged customers, and "that means giving customers a reason to care" about what the utility is offering.
Customer segments
SECC surveys of U.S. utility customers have identified five customer segments, characterized by motivations, Shannon said.
"Green Champions" are the biggest utility customer segment and they respond to environmental appeals. "Savings Seekers" respond to opportunities to save money. "Technology Cautious" customers respond dubiously to money saving and environmental motivations because of doubts about technology. "Movers & Shakers" are skeptical of any appeal but may respond if something really engages them.
"Status Quo" customers make up approximately 18% of customers and "will not engage no matter what approach is used," Shannon said. "They have low energy bills, are unmotivated by environmental concerns and are usually an older demographic."
Millennials tend to be Green Champions "because they grew up with environmental concerns," he added.
Levels of engagement on three offerings were evaluated in SECC's most recent customer survey: An online energy retail marketplace, an energy manager tool and an online rewards program.
"The clearest finding is that consumers respond more to a carrot than to a stick."
![](https://d12v9rtnomnebu.cloudfront.net/diveimages/corporate_site/teampage/square_profiles/placeholder-200.png)
Nathan Shannon
Deputy director, Smart Energy Consumer Collaboratives
The Rewards and Energy Manager offerings got significant engagement from Green Champions and Savings Seekers, but Technology Cautious consumers are less likely to be interested, SECC reported. Over half (59%) of Movers & Shakers described the Retail Marketplace as "only somewhat" or "slightly" engaging. They may not see it as "new or different from current online marketplaces" such as Amazon or Kayak, according to the survey.
Over half of customers across all segments (52%) reported being "probably" or "likely" engaged by an online program that rewarded them for their participation, SECC found. Only 10% were "probably" or "definitely" not engaged.
"The clearest finding is that consumers respond more to a carrot than to a stick," Shannon said. "Knowing how an offering will affect their bills or seeing benefits gets their interest."
Customers are comparing their online utility experiences to their other online experiences and utilities have not kept up, he added.
Out of its more detailed data, Bidgely has begun to build best practices, with the help of Netflix.
Best practices
"The average utility customer probably doesn't know or care what a kWh is, but engaging them is critical because it positions utilities to respond to changing demand," Bidgely's Lee said. "Whether through email, text, phone or paper, the Netflix best practices for customer engagement apply."
Distinguishing between declared and revealed preferences is especially important for utilities because customers may not be the good environmental citizens they claim to be, she said. Analytics on customer usage allow utilities to offer targeted incentives that change actual behaviors.
The Netflix version of SECC's five customer segments is its 2,000 "taste clusters" that categorize members' actual viewing habits, Lee said.
Messaging about saving trees might engage one cluster and messaging about bill savings might engage another, Lee said. This is where a "data science approach" meets a "Goldilocks approach," because "too few clusters results in overly simplistic engagement, but too many personalized clusters is not scalable."
Another Netflix best practice is making content personalized and visually engaging, Lee said. Netflix users spend an average of 1.8 seconds per movie title, and 82% of that time is on artwork, she said. Similarly, utility data analytics on customer usage can deliver online platform visuals that engage customers' fleeting attention.
"Almost half of the executives interviewed, 44%, see one of the biggest challenges to engagement as figuring out what customers want."
![](https://d12v9rtnomnebu.cloudfront.net/diveimages/corporate_site/teampage/square_profiles/placeholder-200.png)
Sharon Thomas
Senior research analyst, Smart Electric Power Alliance
There is a general movement by utilities toward Bidgely's disaggregation of customers' appliance usage because it makes personalized engagement possible, Lee said.
Bidgely collaborates with utilities in building online customer portals, which are beginning to reflect best practices by innovative utilities, Lee said. Many insights on engagement through those portals are described in the 16 executive interviews summarized in the SECC-SEPA paper.
"Almost half of the executives interviewed, 44%, see one of the biggest challenges to engagement as figuring out what customers want," SEPA's Thomas said.
The executives agreed on several features key to engagement: portals that are easy to use and give customers control, recommendations about affordable energy options, more access to clean energy options and fast, personalized service.
![](/user_media/diveimage/UD-CustomerEngagement-3-01-06-2019.jpg)
New approaches
Three "macro trends" are driving innovation in customer engagement in business today, according to Google's Hamel: pressure to open new markets and create new revenue streams, use of digital marketing and social media and quick, personal engagement.
Bill concerns and interest in new technologies can be touch points for engagement, Hamel said. "The next step is optimizing that contact by offering opportunities for customers to save energy or money in thoughtful and practical ways."
That requires giving a customer the motivation to make a behavioral change and the technology needed to make the change, he said. Motivation can include utility incentives, like rebates, but customers can only take advantage of them if technologies like smart thermostats are in place.
Utility online marketplaces "are foundational" because "they get the technologies into customers' hands," Hamel said.
An even newer option is "click and mortar" retailing, he added. As customers make purchases of energy-related products in retail outlets, utility marketplaces can offer them rebates via their smart phones for enrolling in utility programs that use those technologies.
Utilities can also 'fast-follow' the enrollment with offers for complementary purchases, Hamel said. "It is a journey that starts with products coming into customers' homes one by one, and only when customers want them, but over time the utilities achieve their objectives of shifting load or lowering peak demand."
Utility and Co-op efforts
Some utilities are working aggressively to engage customers.
Duke Energy uses software company Tendril's platform for the Home Energy Reports part of its MyHER Program. The reports show customers the savings that program participation is delivering. The utility is also working to build its email contact data base because it found conversions to that program over email have been successful, the SECC-SEPA paper reported.
SMUD's online customer portal, one of the earliest among utilities, facilitates billing, payment, usage and cost analysis, and savings tips. Over half the utility's customers have an account, and over half log in at least once a month, the paper reported.
SMUD's Energy Store allows customers to buy energy products such as smart thermostats, LED lighting and connected home products online. It also offers rebates. The Store has sold 17,000 items since its 2017 launch, the paper reported and SMUD's success has attracted interest from many other utilities.
Customers can still phone New York City's Consolidated Edison, "but they can also reach us via social media, text, website or e-mail," spokesperson Allan Drury emailed Utility Dive. "About 1.8 million customers receive our mass messages and we want to communicate with customers on the platforms they prefer."
ConEd "responded to 87% of Twitter and Facebook inquiries within 30 minutes or less in 2017," he added. Its website was recently "revamped" to streamline transactions and add live chat capability.
Electric cooperatives are also innovating in two important areas: design thinking and expanding the reach of the utility connected home concept, National Rural Electric Cooperative Association Director of Consumer Solutions Brian Sloboda told utility Dive.
"You can tweet to customers all day long and make them feel warm and fuzzy, but the objectives are to save energy for the system and lower customer bills."
![](https://d12v9rtnomnebu.cloudfront.net/diveimages/corporate_site/teampage/square_profiles/placeholder-200.png)
Brian Sloboda
Director of consumer solutions, National Rural Electric Cooperative Association
The Poudre Valley Rural Electric Association (PVREA) found strong responses from customers on managing energy costs, based on design thinking, which tracks "super users' emotional reactions to new products and services" Sloboda said. Based on those results, they are planning to implement a new time-of-use rate.
The Pacific Northwest National Laboratory (PNNL) is leading a pilot to expand the reach of the utility connected home concept, he said. A dashboard will be provided to customers that will allow them more proactive control of smart home devices and deliver bill savings.
For most utilities, "the bill is the only touch point with customers and it is a very negative touch point," Sloboda said. "You can tweet to customers all day long and make them feel warm and fuzzy, but the objectives are to save energy for the system and lower customer bills."