lessons from the real world webinar series secrets of...

Lessons from the Real World Webinar Series

SECRETS OF CUSTOMER ADOPTION

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Jesse Berst

Host & Moderator

SmartGridNews.com

Greg Guthridge

Managing Partner –Accenture Retail and Business Services for Utilities

Bart Schoonbaert

Manager –Global Research Lead

Accenture

Jim Nelson

Senior Marketing Manager, Power Smart

BC Hydro

Agenda:

1. What the research reveals

2. Best practices and

lessons learned

3. BC Hydro case example

4. (Smart Grid Consumer Collaborative)

We will post links to the slides and the replay on

SmartGridNews.com and in our email newsletter

The consumer challengeThe consumer challengeThe consumer challengeThe consumer challenge

We don’t like:

- changing behavior

- cramping our style

- losing control

We don’t understand:

- smart grid

- dynamic pricing

- demand response

We want:

- control & choice

- “cruise control”

- low cost

We distrust:

- smart meters

- utility motives

- “Big Brother”

Press is reinforcing fears

Welcoming the panel

Jim Nelson Senior Marketing Manager – Power Smart

6

Greg Guthridge leads Accenture’s global utilities customer care practice. Over the past 20 years, he has led and managed customer service-related transformation programs, outsourced business operations, and strategic vision projects for clients in North America, South America, the United Kingdom, Europe, and Asia. With experience in customer transformation, demand-side management, and retail competition, Mr. Guthridge has developed solutions that drive consequent impacts on costs, customer satisfaction, revenue assurance, customer energy demand, and workforce optimization.

Jim is a Senior Marketing Manager of Power Smart at BC Hydro. He is responsible for conservation and energy efficiency efforts and marketing a variety of programs and public engagement initiatives for residential and commercial customers helping them to reduce energy consumption and to be more energy efficient. His team also works behind the scenes to build the required infrastructure to allow these customers to improve their efficiency including partnerships ranging from retail stores and manufacturers to electrical contractors, architects, and engineering firms. Jim’s key goal over the next several years is to implement a number of targeted initiatives to develop a world-leading conservation culture in BC.

Bart Schoonbaert is the research lead for Accenture’s global utilities customer care practice, and development lead for Accenture’s High Performance Utility Model for Customer Operations. He works closely with Accenture’s global engagement teams supporting clients with the implementation of smart metering, demand response and energy efficiency & conservation initiatives. In his role, Bart is responsible for researching strategic, operational and process best practices for utilities transitioning from traditional to smart-enabled operations, with a particular focus on optimal customer engagement and customer experience practices.

Greg Guthridge Managing Partner – Accenture Retail and Business Services for Utilities

Bart Schoonbaert Manager – Global Research Lead

ObjectivesObjectivesObjectivesObjectivesObjectivesObjectivesObjectivesObjectives

Panel Objectives:

• Discuss the results of Accenture’s end consumer study which is focused on mass market residential electricity energy efficiency and conservation programs (with and without smart metering capabilities)

• Discuss best practices and lessons learned when implementing energy efficiency and conservation

• Highlight case examples from BC Hydro’s Power Smart Program

Copyright © 2010 Accenture. All Rights Reserved.

As energy efficiency and conservation go mainstream, utilities and energy providers must adapt to new consumer preferences and behaviors when offering mass-market energy management products and pricing programs.

7

OverviewOverviewOverviewOverviewOverviewOverviewOverviewOverview


As energy efficiency and conservation go mainstream, energy providers must

adapt to new consumer preferences and behaviors when offering programs to the

mass-market. Accenture’s latest research challenges many traditional

assumptions about the drivers of – and barriers to – energy efficiency in the

residential market. Energy providers must understand and effectively balance

these drivers and barriers as they design products, services, campaigns and

consumer interaction strategies.

8

Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences in Energy Efficiencyin Energy Efficiencyin Energy Efficiencyin Energy Efficiencyin Energy Efficiencyin Energy Efficiencyin Energy Efficiencyin Energy Efficiency

Accenture endAccenture endAccenture endAccenture endAccenture endAccenture endAccenture endAccenture end--------consumer observatory on electricity consumer observatory on electricity consumer observatory on electricity consumer observatory on electricity consumer observatory on electricity consumer observatory on electricity consumer observatory on electricity consumer observatory on electricity management 2010management 2010management 2010management 2010management 2010management 2010management 2010management 2010

Accenture recently completed a survey to understand consumer preferences, behaviors, and attitudes

towards electricity management programs. In January 2010, we surveyed 9,108 individuals in 17

countries.

• Minimum of 500 respondents

per country

• Focus on urban populations in

developing economies including

Brazil, China, and South Africa

• Survey administered over the

Internet

Global Scope

9

Australia

Brazil

Canada

China

Denmark

France

Germany

Italy

Japan

Netherlands

Singapore

South Africa

South Korea

Spain

Sweden

United Kingdom

United States

Countries Surveyed


1. Consumer Paradox - There is a significant contradiction between consumer perceptions and their actual knowledge of energy efficiency.

2. Trusted Advisor - Consumers' first instinct is to contact utility/electricity providers for energy-efficiency activities, however, providers still need to build trust and credibility.

3. Emerging Barriers - While price remains a key factor to adoption, the extent of the utility/electricity providers’ control over energy use has emerged as a potential barrier.

4. Channel Diversification - Channels and contact points for utility/electricity providers to communicate with consumers are diverse.

5. Complexity of Consumer Preferences - Adoption of electricity management programs is influenced by fragmented and nontraditional consumer preferences.

Top 5 Key findings

Copyright © 2010 Accenture. All Rights Reserved. 10

11

Key finding Key finding Key finding Key finding Key finding Key finding Key finding Key finding 1: Consumer Paradox 1: Consumer Paradox 1: Consumer Paradox 1: Consumer Paradox 1: Consumer Paradox 1: Consumer Paradox 1: Consumer Paradox 1: Consumer Paradox

There is a significant contradiction between consumer perceptions and their actual knowledge of energy efficiency

While 75% of survey participants indicated that they know how to optimize their electricity consumption, only 28% know of programs that enable them to do so.

Base: All respondents

“Do you think you understand enough about the actions you can take to optimize your electricity consumption?”

Source: Understanding Consumer Preferences for Energy Efficiency, 2010

“Have you heard of programs that help you to optimize your electricity consumption (i.e., electricity management programs)?”

38%

I have heard about them and know what they are

34%

I have heard about them but do not know what they are

I have never heard about them

28%


75%

“Yes”

25%

“No”

But...


12

Key finding Key finding Key finding Key finding Key finding Key finding Key finding Key finding 2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor

Utilities/electricity providers are the preferred source for electricity management programs.

“Who would be your first choice to deal with/be in contact with regarding each of the following situations?”

Consumers' first instinct is to contact utility/electricity providers for energy-efficiency activities; however…

Home service providers

4%

Consumer associations

10%

Environmental associations 9%

15%

Government/governmental organizations

5%

Retailers/equipment manufacturers

Utilities/electricity providers 53%

4%

Academics/schools/scientific associations

45%

8%

5%

8%

8%

8%

19%

10%

0%

13%

0%

0%

0%

77%

10%

0%

12%

0%

0%

0%

77%

Get general information on electricity management programs

Get customized advice on the best electricity management programs for your situation

Purchase or sign-up for an electricity management program

Contact for support regarding issues you may have with an electricity management program you have enrolled in


Source: Understanding Consumer Preferences for Energy Efficiency, 2010Copyright © 2010 Accenture. All Rights Reserved.

13

Key finding Key finding Key finding Key finding Key finding Key finding Key finding Key finding 2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor2: Trusted Advisor

Consumers do not necessarily view utilities/energy providers as trusted advisors for electricity conservation.

“What organizations do you trust to inform you about actions you can take to optimize your electricity consumption?”

… utilities/electricity providers still need to build trust and credibility.

Neither trust nor distrust

36%

42%

43%

46%

46%

66%

60%

59%Home service providers

28% 13%

Retailers/equipment manufacturers 27% 13%

Online service providers 14% 20%

Government/governmental organizations 26% 28%

Utilities/electricity providers 25% 29%

Consumer associations 8% 49%

Academics/schools/scientific associations 7% 51%

Environmental associations 11% 53%

(e.g., Google, Microsoft)

(e.g., cable television provider, telecommunications provider, home security company, etc.)

Do not trust TrustBase: All respondents


14

Key finding Key finding Key finding Key finding Key finding Key finding Key finding Key finding 3: Emerging Behaviors3: Emerging Behaviors3: Emerging Behaviors3: Emerging Behaviors3: Emerging Behaviors3: Emerging Behaviors3: Emerging Behaviors3: Emerging Behaviors

While price remains a key factor to adoption, the extent of the utility/electricity providers’ control over energy use has emerged as a potential barrier.

Consumers are placing emerging emphasis on control factors which are influenced by: personal home control, data privacy, security, lifestyle, and ‘big brother’.

Your action required

Your environmental impact

Utility control

Impact on your electricity bill

8%

38%

Your electricity provider

may alert you at various

times of the day of high

electricity-demand

situations and you may or

may not choose to take

actions that interrupt your

daily routine for up to one

minute each time.

You may agree to allow

your electricity provider

to remotely reduce and

limit the use of specific

appliances and devices

in your home at specific

times of the day.

Changing when and how

much electricity you use

may reduce your

environmental impact.

You may take personal

actions such as turning

off appliances and

equipment or allowing

your electricity provider to

remotely control

equipment to reduce your

electricity bill.

37%

Choice of electricity management program

Relative importance of

each component in

the decision to adopt

electricity management

programs

17%



15

Key finding Key finding Key finding Key finding Key finding Key finding Key finding Key finding 4: Channel Diversification4: Channel Diversification4: Channel Diversification4: Channel Diversification4: Channel Diversification4: Channel Diversification4: Channel Diversification4: Channel Diversification

Customers’ preferred contact channel is highly dependent on the type of interaction.

Channels and contact points to communicate with consumers are diversifying.

46%Over the Internet (website)

15%In person at your home

10%Paper mail

In-store 6%

Over the telephone 6%

Email

SMS-text message

8%

0%

Social media (i.e., web log, Twitter, Facebook 1%

In your workplace 2%

In-home energy display 2%

TV/radio spots, programs 4%

1%

2%

2%

3%

0%

9%

11%

10%

8%

22%

33%

0%

13%

10%

7%

7%

20%

37%

1%

1%

2%

2%

31%

0%

4%

1%

2%

0%

3%

0%

11%

37%

12%

Get general information on electricity management programs

Get customized advice on the best electricity management programs for your situation

Purchase or sign-up for an electricity management program

Contact for support regarding issues you may have with an electricity management program you have enrolled in

“What would be your first choice to do each of the following?”



Indifferents

Skepticals

Pragmatics

Cost conscious

Eco-rationals

Proactives

16

Key finding Key finding Key finding Key finding Key finding Key finding Key finding Key finding 5: Complexity of Consumer 5: Complexity of Consumer 5: Complexity of Consumer 5: Complexity of Consumer 5: Complexity of Consumer 5: Complexity of Consumer 5: Complexity of Consumer 5: Complexity of Consumer PreferencesPreferencesPreferencesPreferencesPreferencesPreferencesPreferencesPreferences

Six consumer segments have been identified according to their preferences for the different components of electricity management programs.

Adoption of electricity management programs is influenced by fragmented and non-traditional consumer preferences.

Indifferents

Skepticals

Proactives

Eco-Rationals

• Highest willingness to take actions to reduce the use of major appliances in their home

• Lowest interest in the reduction of their impact on the environment

• Highest interest in the reduction of their impact on the environment

• Higher impact of social pressure to drive them to take action

• Lower acceptance of utility control

• Higher sensitivity to electricity bill saving

• Lowest acceptance of utility control

• Lowest trust toward utilities/electricity providers

• Lowest willingness to take actions to reduce the use of major appliances in their home

• Higher acceptance of utility control

Cost Conscious• Highest sensitivity to electricity

bill saving • Higher impact of social pressure

to drive them to take action

16%13%

21%

21%17%

12%

Pragmatics

Collaborating with communities to increase education

Utilities/electricity providers need to

actively promote education programs

to eliminate the contradiction between

consumer perceptions and their actual

knowledge of energy efficiency.

Becoming a trusted advisor

Consumers instinctively want to turn

to their utilities/electricity

provider for energy-efficiency

activities, but providers still need to

build trust and credibility.

Providing multi-channel capabilities

Utilities/electricity providers need to

offer consumers more ways to

interact for energy efficiency and conservation advice and service.

Creating a consumer-centric organization

Differentiating services and

capabilities to better meet a more

active consumer base and diverse consumer preferences.

Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences Understanding Consumer Preferences in Energy Efficiencyin Energy Efficiencyin Energy Efficiencyin Energy EfficiencyImplications for energy providers Implications for energy providers Implications for energy providers Implications for energy providers ----

SummarySummarySummarySummary

Copyright © 2010 Accenture. All Rights Reserved. 17

Questions for Greg and Bart?Questions for Greg and Bart?Questions for Greg and Bart?Questions for Greg and Bart?Questions for Greg and Bart?Questions for Greg and Bart?Questions for Greg and Bart?Questions for Greg and Bart?

Insights from 20 Years of DSM

1.8 million

households and

organizations served

5,700 employees

Since 1989

Previous 15 years

6,000 GWh

10 years to get

8,000 GWh

Social Marketing Acknowledgements

• Nothing here will Surprise you!

• 20 Years of Successful Power Smart Activities

• Evolution of the Utility Demand Side Management 5 As: Awareness, Availability, Accessibility, Affordability, Acceptance

• Best practices from other social change initiatives

• Social Marketing Experts: Doug Mackenzie-Mohr, Jay Kassier

• Insights and tools from IDEO

• Macolm Gladwell: “The Tipping Point”

• A.H. Maslow: : “A Theory of Human Motivation”

• “Made to Stick” and “Switch” Chip Heath & Dan Heath

• Marketing Leadership Council

• Various Social Marketing Articles & Blogs

1. Understand People not Customers

2. Make an Emotional Connection to generate Excitement and

Awareness

3. Develop Partnerships to improve Availability & Promotion

4. Address Affordability: End-user and/or Channel Incentives

5. Remove Acceptance Issues, including examining direct and indirect

Competitors and Your Own Process

6. Set Targets, construct a Plan

7. Utilize the Power of Norms to create Advocacy & Co-Creation

8. Gain a Commitment

9. Provide Feedback: peer Competition and Comparison motivates, remember to

Broadcast Wins

10. First Action then Habit Formation

The Social Marketing Construct

Passions

Networks

Life-stageGeography

Media channels

Attitudes

Values

Home

Influencers

Work

Play

Recreation

Travel

Commute

Memberships

Hobbies

Environmental Concerns

Financial realities

Electricity Use

Political Interests

Friends & Family

#1 People not “Customers”

“Miss it when it’s not there”

Passions

Networks

Life-stageGeography

Media channels

Attitudes

Values

Home

Influencers

Work

Play

Recreation

Travel

Commute

Memberships

Hobbies

Environmental Concerns

Financial realities

Electricity Use

Political Interests

Friends & Family

#1 People not “Customers”

#1 People not “Customers”- Tools

Buying an Appliance

Think about who they talk to

What motivates them as an individualWhat do they care about

What steps do they take

Who do they trust

#1 People not “Customers”- Tools

#2 Create Excitement

& Understanding: Make an

Emotional Connection

Stickiness: Concepts from Made to StickStickiness: Concepts from Made to StickStickiness: Concepts from Made to StickStickiness: Concepts from Made to StickStickiness: Concepts from Made to StickStickiness: Concepts from Made to StickStickiness: Concepts from Made to StickStickiness: Concepts from Made to Stick

• Simple

• Unexpected

• Concrete

• Make an Emotional Connection

• Tell a good story

#3 Partnerships to improve

Availability &Awareness

Market Disrupters

vs.

Game Changers

#3 Partnerships

The Social Change ConstructThe Social Change Construct

The Power of NormsThe Power of Norms

• Peer Pressure: Friends, acquaintances, celebrities, leaders, and the “collective”

#7 The Power of Norms

Google

“Elevator Prank Old Candid Camera”

#7 Power of Norms: Advocates can also provide#7 Power of Norms: Advocates can also provide#7 Power of Norms: Advocates can also provide#7 Power of Norms: Advocates can also provide

CoCoCoCo----CreationCreationCreationCreation

1. Understand People not Customers

2. Make an Emotional Connection to generate Excitement and

Awareness

3. Develop Partnerships to improve Availability & Promotion

4. Address Affordability: End-user and/or Channel Incentives

5. Remove Acceptance Issues, including examining direct and indirect

Competitors and Your Own Process

6. Set Targets, construct a Plan

7. Utilize the Power of Norms to create Advocacy & Co-Creation

8. Gain a Commitment

9. Provide Feedback: peer Competition and Comparison motivates, remember to

Broadcast Wins

10. First Action then Habit Formation

The Social Marketing Construct

Questions for Jim Nelson?Questions for Jim Nelson?Questions for Jim Nelson?Questions for Jim Nelson?Questions for Jim Nelson?Questions for Jim Nelson?Questions for Jim Nelson?Questions for Jim Nelson?

Joining forces for a solution:Joining forces for a solution:Joining forces for a solution:Joining forces for a solution:Joining forces for a solution:Joining forces for a solution:Joining forces for a solution:Joining forces for a solution:SmartGridCC.orgSmartGridCC.orgSmartGridCC.orgSmartGridCC.orgSmartGridCC.orgSmartGridCC.orgSmartGridCC.orgSmartGridCC.org

SECRETS OF CUSTOMER ADOPTION

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