Personalization is key to unlocking the smart energy future

SECC’s research shows that consumers expect personalized rate and cost recommendations before making changes and enrolling in new rates and programs. Utilities that have followed this path and employed rate engine solutions to generate cost analysis data have seen promising results.

By Nathan Shannon, Deputy Director, Smart Energy Consumer Collaborative, and Jian Zhang, Founder and CEO, GridX

Today’s consumers expect personalization from the companies that they do business with, whether it’s in finance, travel, retail or other sectors. They want a seamless, “one-click” experience with offers that are relevant to their lifestyles, values and preferences. Companies that meet these expectations and focus on the customer journey often see increased trust, satisfaction and engagement from their customers as a result.

The utilities industry, in particular, can draw many important lessons in delivering memorable customer experiences from leaders in this area, especially as the industry continues to undergo many changes. Pricing and electric rates, for example, are increasingly becoming more complex, and energy consumers have more options for rates, programs, services and technologies than ever before.

As electric utilities attempt to meet carbon emissions reduction targets while also building meaningful relationships with their customers, developing personalized customer experiences is more important than ever before. Consumers expect a certain level of personalization and have stated time and time again that the lack of personalized information is a major hurdle to participating in new rate plans and energy efficiency programs or adopting distributed energy resources.

The desire for personalization is consistent in consumer research

For over a decade now, the Smart Energy Consumer Collaborative (SECC) has been surveying consumers across the United States and Canada to learn about their behaviors, values and expectations for their electricity providers. In recent years, the desire for personalization has been a consistent finding in these nationally representative surveys.

According to SECC’s “Data Analytics: Unlocking the Consumer Benefit” survey, 74 percent of consumers expect that their electricity provider routinely analyzes their account data in order to help them find ways to save energy at home. Among millennial consumers, this expectation rises to 81 percent, and for SECC’s eco-conscious customer segment, who tend to be the most engaged with their electric utilities, it’s even higher at 86 percent.

More recently, SECC conducted over 30 on-camera interviews with consumers to learn more about their evolving values, behaviors and motivations during the COVID-19 pandemic. In the “Modern Customer Engagement Journey” research, consumers were clear about wanting to better understand cost savings from programs and services and the need for more transparency from electricity providers. Consumers also stated that upfront costs are off-putting, that they need help making larger purchases and that they do not have tools to assess how products and programs will impact energy consumption – all of which are echoed by findings from SECC’s quantitative research.

One Canadian consumer in SECC’s middle-of-the-road customer segment stated: “Did I really see a difference in my [power] bill? No, I didn’t see any big changes. Even though they told me I probably would, I really didn’t see a change.” Consumers are often unable to delineate whether they have actually saved and need clarity from their providers on the impact of programs or investments. Shadow billing, usage data access and bill calculators are a few ways providers can meet these expectations.

Whether it’s a quantitative study or on-camera interviews, SECC’s research shows that consumers want access to their energy data, want to save money and need help clarifying costs before participating. Consumers want their own data to power insights that can help them save, and the lack of actionable information on cost savings is a major obstacle to engagement.

Case study: Southern California Edison’s time-of-use rate tools

As a part of a statewide transition in California, Southern California Edison (SCE) introduced a suite of time-of-use (TOU) rates for customers in its service territory. To help customers better understand the new rates, SCE developed a suite of personalized rate and cost analytics.

This suite included personalized rate comparison analyses for the utility’s five million customers to better target customers by incorporating their rate analyses into the customer segmentation. This enabled SCE to send different messages based on whether customers will save money under the new rates. SCE sent personalized rate analyses through direct mail and email to inform customers of the cost of the new TOU rates compared to their current rates, and personalized analyses were added to customers’ online accounts to provide self-care options.

This campaign has harnessed price transparency and personalization to drive greater trust and engagement from customers. SCE has seen an increase in the response rates of the rate marketing campaigns by better customer targeting and an increase in voluntary enrollments in TOU rates, which has led to a more successful transition to TOU rates for both customers and the utility. Year to date, SCE has seen a 13-percent increase in visits to the online rate tool as more consumers explore their rate options.

SCE also offers personalized Bill-to-Date cost analyses and bill forecasts through the end of the billing cycles to provide both TOU and non-TOU customers with cost updates on an on-going basis. If the forecasted bills trend higher than the cost thresholds set by customers, SCE sends notifications based on customers’ preferred communication channels.

According to Eva Molnar, SCE’s Senior Manager of Customer Programs & Services, “Providing customized usage and rate data is important to providing good customer service. Our customers have the ability to make more informed decisions about managing their energy use and choosing the optimal rate to meet their lifestyle.”

Personalization from utilities can lead to a smarter, cleaner energy future

It’s no surprise that the industry is undergoing many changes – utilities are becoming more customer-centric while also preparing to meet the challenges caused by climate change. Utilities are offering new rates, programs and services that can help meet both of these goals, yet engagement remains a challenge. To transition to a cleaner, smarter energy future, personalization will be essential in getting consumers on board for new electric rates, energy efficiency programs, renewable energy and electric vehicle adoption and more.

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