Charles Darwin wisely said, “it is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”As utility customer preferences evolve, so must we.Change is happening, and consumers are seeking to engage in energy in a newfound manner. We can either react proactively or wait to die. This may sound harsh, but it’s also exciting. We have an opportunity to drive the evolution of the utility consumer’s relationship with their energy and their energy provider. In the process, we can transform a transactional relationship into one that engages users every day. As we embrace changing customer needs, we’ll deliver new experiences to delight customers thereby create competitive advantages.Home Energy Management (HEM) solutions can be a catalyst for consumer engagement, enabling energy utilities to leapfrog each other and other industries in terms loyalty and satisfaction. HEM can transform the current utility-customer relationship, and this transformation equates to notable gains in your J.D. Power scores.
Flip the Value Proposition
First, let’s focus on the current state of the utility-customer relationship. Today, utilities are essentially managing a negative value proposition. The lights are always expected to be on. Anything less is unacceptable. The bill should always be about the same. Anything more is shocking. Attempts to improve customer satisfaction have thus far been fairly limited in scope. We keep pushing the boulder back up the hill, only to watch it roll back down as events outside our control impact satisfaction.
We have an opportunity to flip the value proposition. We can transform a relationship that is typically based on a once-a-month transaction and turn it into an experience that has daily relevance. To do so, we must move from a reactive to a proactive mode (and then eventually a predictive mode!). Rather than reacting to circumstances outside of our control, we need to provide customers the tools and insights to develop a new, highly engaged relationship with energy.
Other industries have successfully embraced new technology as a complement to their product experiences. Cars have become connected – blending mobile into the vehicle experience. Insurance companies have completely “gone mobile” by digitally retooling their claims processes. In fact, retail banking has undergone a complete transformation since the rise of the smartphone.
Each of these industries has been able to drive loyalty and satisfaction (and their J.D. Power rankings!) by embracing technology to evolve the customer experience. Utilities now have the same opportunity in front of them.
The good news is that consumers are raising their hands and boldly asking their energy providers to take on this new role. Today’s consumers expect utilities to be more proactive in providing solutions to address three main needs:
Home Energy Management solutions allow utilities to meet these consumer needs by providing a trifecta of tangible benefits for utilities and their customers. HEM solutions enable granular insight into the drivers of your bill and provide new ways of interacting with energy use.
Proving the Power of HEM: DTE Insight
DTE Energy has reimagined the consumer’s relationship with energy by delivering a HEM solution that leapfrogs consumer engagement levels seen in their own and other industries. Launched in 2014, DTE Energy’s Insight app focused on driving energy efficiency, using a real-time connection to household energy consumption to create a new experience for their customers. With over 8 million sessions recorded to date, DTE Insight has gone beyond the meter to deliver both energy efficiency and impressive user engagement.
Leveraging the Powerley platform, the second generation of DTE Insight builds upon their strong foundation of energy efficiency. It combines energy management with home automation to produce a smart home experience with energy at its core.
Currently deployed to pilot users, the next generation of DTE Insight has proven that HEM can accelerate consumer engagement. It enables homeowners to manage their energy as well as every connected device with it. As you can see in the graphic above, engagement levels have soared among HEM pilot users – greatly surpassing engagement benchmarks set in a leading mobile segment, retail banking. Average sessions per household increased to 4.5 times as compared to the current generation of DTE Insight.
HEM and J.D. Power Scores
As the case above highlights, HEM opens up a two-way dialogue between the consumer and the utility – enabling customers to engage in their energy consumption. This exchange provides considerable value – not only delivering energy efficiencies but also a consumer experience that goes well beyond the meter. As a result, Home Energy Management solutions have the potential to significantly impact J.D. Power scores by as much as 50% overall.
How does HEM positively impact J.D. Power scores? J.D. Power breaks down customer value for both residential and commercial energy customers into six primary areas:
J.D. Power provides a set of suggestions for any enterprise in any industry to elevate their scores. Home energy management solutions (such as Powerley) address each of these areas:
| Customer Needs | HEM Offers |
|---|---|
| Improve communication | Create daily engagement in energy consumption |
| Make it easier to do business with | Deliver personalized suggestions about how to save money |
| Provide users with choices and personalization | Empower users with new ways to interact with their home and their energy |
| Innovate to provide new value to customers | Create an entirely new smart home experience with energy management at the core |
In the end, HEM can positively impact 51.6% of the J.D. Power satisfaction survey. That’s a pretty specific number. Let’s dig into how we arrived at it.
Each question on the J.D. Power consumer survey is weighted in order to arrive at the overall score. Two very fundamental consumer benefits of home energy management solutions are improved communication about outages and intelligent recommendations about personal energy usage to reduce costs. Beyond that, the consumer app also makes it easier to do business with the utility while making the value the utility more prominent in our daily lives.
Working with a 3rd party research company, we detailed how home energy management can impact some of these items more directly than others.
Utility-provided home energy management has a DIRECT impact on:
- Keeping you informed of an outage (3.6%)
- Efforts of utility to help manage monthly usage (3%)
- Fairness of pricing (3%)
- Variety of EE programs offered (3.8%)
- Keeping informed/keeping costs low (2.7%)
- Usefulness of suggestions on ways to reduce bill (2.9%)
- Creating messages that get your attention (2.5%)
In summary, HEM can directly influence 21% of the consumer study questions. HEM solutions drive more frequent interactions between energy and consumers while offering insight into opportunities for efficiencies and savings.
HEM also has an INDIRECT impact on:
- Supply electricity during very hot/cold temps (7%)
- Promptly restore power after outage (4.8%)
- Avoid brief interruptions (4.2%)
- Avoid lengthy outages (3.6%)
- Actions to take care of environment (3.8%)
With another 23.4% of potential indirect impact, it’s clear that we’re not talking about simply incremental improvements. HEM solutions have the potential to completely transform the consumer’s satisfaction and engagement with their energy.
Really, the question is not “why?” But rather “why not?” Those that do not adapt their customer service models to meet new HEM consumer needs will be left behind.