Bright spark: Can utilities drive engagement by helping customers use less energy?

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Nandini Basuthakur pof Opower examines whether Big Data will allow utility firms to make more money by selling less energy.

When was the last time you felt good about your electric utility? You get the bill, grumble about the cost and then forget about it until the next bill drops through the letterbox. Up until recently the relationship between utilities and their customers has been largely transactional. With rising bills and accusations of profiteering at the expense of hard-hit consumers, the utility industry’s reputation has suffered in the eyes of the press, its customers and broader stakeholders. The situation is only getting tougher as consumers, environmental groups and climate legislation place a responsibility on utility companies to help individuals reduce energy usage in the home.But imagine a situation where you trusted and even liked your utility because they actually helped you understand and reduce the amount of energy you use.Easier said than done. Energy is a low engagement product. The average person thinks about energy six minutes in total every year. Contrast that with the same average person who spends 96 hours per year on Facebook. Energy is inexpensive (on a per unit of consumption basis) and frankly boring (what is a kWH?) so there is no motivation to use less of it. By giving consumers useful information on their usage through designed reports and applying principles from behavioural science, Opower has been able to strongly motivate energy consumers to adjust their behaviour through the power of competition. We have found that, by showing customers what their energy consumption is like as compared to similar households, they naturally look to outperform their peers and actively lower their energy usage. It is a simple idea, yet it produces remarkable results.Using Big Data to know each and every customer In recent years we have seen an increase in the use of data analytics and the rise of Big Data across industries such as retail, banking and now in utilities. Companies are collecting and storing more information on customers than ever before but the challenge is how to utilise this data to add value to your business. If utilities want to play in the consumer space for the long run, they need to develop programmes to engender loyalty amongst their customers. They have to reduce the number of customers who leave. They have to sell products with added value, be it insulation services, efficiency advice or electric cars.

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