The Next 10 Years: Empowered "digital natives" become a force to reckon with
Editor's note: This is the third installment of our The Next 10 Years series where industry insiders offer insights on smart grid issues and trends they expect to see in the coming decade. Today's topic is customer engagement. We welcome your comments too; please use the Talk Back form at the bottom of the page.
By Liz Enbysk
SGN Managing Editor
In the next decade, a larger proportion of consumers will be "digital natives," suggests Sensus CEO and President Peter Mainz. These digital natives have grown up in a world where the Internet and smart phones have always been available.
"This demographic shift," Mainz says, "will drive a change in the way customers want to access information and monitor and manage their usage of scarce water and energy resources."
And Rodger Smith, SVP and General Manager of Oracle's Utilities division, suggests the transformation of customer engagement from a reactive approach to a proactive one has already begun.
"Whether the tool is social media, the web, phone and text, Internet chat, or a combination of the above, technologies are offering utilities the opportunity to have better relationships with their customers," he says. "As one example, utility mobile strategies are growing, and will reach across the utility in the future."
Smith says it's not just about billing or outage management; it's about demand response, energy efficiency and prepay too "It's about utilities wanting to fulfill the expectations customers have of them, based upon those customers' proactive interactions with other service providers."
And they may be doing that with new tools. Comverge Marketing VP Jason Cigarran says his company believes a major change within the next decade will be the ***image10***integration of consumer engagement technologies within broader energy management programs and existing consumer electronics.
"Just like the pager disappeared when text messaging became commonplace on mobile phones," Cigarran says, "we expect standalone energy devices to become a thing for the history books within the next 10 years"
Sege says successful experiments will need to be expanded and the benefits marketed more aggressively. "For example, it's been shown by Opower and others that a very effective way to change usage patterns is to show consumers' consumption relative to their neighbors," he says. "People care less about how they compare to their state, or to their country, or to Silicon Valley. But if they can see that they're using more electricity than their immediate neighbors, then that has the power to change behavior dramatically."
New customer segmentation models are emerging, notes Rob Wilhite, Global Director for Management and Operations Consulting at DNV KEMA. "The most compelling reason is to drive energy efficiency and peak load reduction, in order to optimize the economic return of smart grid investments," he says.
"The utility of the future," Wilhite continues, "is using advanced analytics to provide a better understanding of customer behaviors, and thereby enable the development of products and services that are specifically designed to meet the needs of certain customer segments."
Such targeting, Wilhite adds, not only improves customer enrollment and economic return, but may also improve customer satisfaction.
And some believe the message is getting out.
Customer understanding of grid technology and programs comes hand in hand with ease of use and utilities investing in empowering the end customer, notes Lionel Chocron, General Manager for Cisco's Connected Energy Networks Business Unit. "There has been a growing awareness by customers on energy efficiency programs and a more gradual increase in awareness on the underlying technologies," he says.
And what about the cost?
Customer engagement initiatives do come with a price tag, notes Don Rickey, SVP for Schneider Electric's Infrastructure Business. "As regulators and other stakeholders see the value of strong customer engagement, more utilities will have the leeway to adopt them," Rickey says.
And when that time comes, the message needs to fit the need. Rickey cites some examples:
Â· People in storm ravaged areas have learned the value of smart grid to restoration and to increased feedback on work progress
Â· Messages about energy management have an audience mainly among customers who were energy aware to begin with
Â· As jurisdictions have adopted rates that reflect critical pricing, customers have internalized the messaging because they had reason to do so
"The right message has to reach the right person with the right product at the right time," Rickey says. "The industry still has a ways to go to match typical consumer retail practices."
Tomorrow: A contrarian view of customer engagement.
More from SGN's The Next 10 Years series...