The energy transition is a term familiar to us in the energy sector, and we might talk about the need to lead consumers through it. Yet do we adequately consider what this means for consumers and how this is realistically achieved? Even in countries with the lowest carbon footprints, there is still a range of people with beliefs from climate activists to climate change deniers.
The challenge is to bring customers on and through their own personal energy transitions, when people are at different stages on the journey with different motivations, needs and expectations. Therefore, energy companies need to have great insight into their customers to help them navigate their personal energy transitions.
There are different approaches to consumer segmentation depending on the data a company holds. At Delta-EE, we use a broad, but intuitive model of three distinct groups: prosumers, energy engaged and mainstream consumers.
Prosumers are the smallest but the most future-thinking group of the three in terms of the energy transition. Many are financially invested in new energy technology from solar PV to heat pumps to EV chargepoints – although not necessarily so if in social housing or moved into a home with such assets already installed.
Most (though not all) will have a good understanding of and be intrinsically motivated in the energy transition. This increases the likely conversion to additional energy services like home energy management where such services are appropriate and of value to them. Prosumers’ needs are centred around self-sufficiency, energy optimisation and return on investment, but they are also willing participants in a greener energy future for all and will collaborate as partners in these wider aims.
A good example to help prosumers manage and control their home energy eco-system within this wider content, the E.ON Home app provides real-time solar consumption, generation, storage and grid export monitoring information, in addition to smart heating and lighting control.
The energy engaged are still a minority group, but a growing one as evidenced by the rise of customer churn in energy supply. They have varying degrees of understanding of their energy options and how their behaviour impacts carbon emissions but are motivated to do more if equipped with the right knowledge and tools.
There is rightly a lot of interest in this group as they represent the link between the early adopters and the mass market. Delivering compelling propositions to this group indicates potential to scale as engagement levels amongst the mainstream increase.
Successful companies recognise that empowerment is key for the energy engaged to turn their motivation to make good energy choices into action. Fortum-owned start-up Barry provides its customers with in-app alerts for times of high and low wholesale price and grid carbon intensity. This empowers its customers on a dynamic time-of-use tariff to shift consumption to greener and cheaper times. It consequently enjoys very strong customer engagement levels.
The mainstream, or mass market, is characterised by having generally low levels of engagement around home energy. But that doesn’t mean they can’t be engaged. Some have the desire to make a difference, but sub-consciously prioritise self-interest like comfort and convenience over energy reduction or load shifting. Some are strongly motivated on some facets of climate change like recycling or meat consumption, yet do not yet have the understanding around energy consumption to take positive action.
Engaging this mainstream audience is a major challenge. Data and facts, whilst working well for more engaged consumers, are not so well suited to influence the mass market. Instead building familiarity of social norms and acceptance of behaviour change tools like energy insights are needed using softer techniques like simplicity, visualisation and intuitiveness.
In-home displays with real-time energy data sitting in a prominent place, uses familiarity, visualisation and immediacy to build home energy awareness. In GB, where in-home displays are offered free to end users with a smart meter installation, more than 70% of customers with smart meters use an in-home display at least monthly. Research by Smart Energy GB shows owners of in-home displays feel that they have a better understanding of what they’re spending on energy, and are more conscious of, and more in control of their energy use than those without an in-home display.
Using personalised energy data to support consumers’ individual energy transitions
We’ve discussed different types of consumers, their energy needs and examples of how energy companies are leading them through their personal energy transitions, as shown in the visual below.
Meeting individual consumer needs in the energy transition is made easier with good quality customer and energy behavioural data. Indeed, energy data is a key enabler, unlocking understanding and personalisation opportunities. For example, when detecting new EV chargepoint use through customers’ load profiles, an energy company can confirm or suggest the most appropriate electricity tariff for them or encourage sign-up to a demand side flexibility programme. Identifying permanently home-based customers such as retirees or homeworkers, particularly those with home energy monitoring equipment, may reduce risk for security and insurance companies, so offering a cross-sell opportunity.
Complexity is added when supporting the breadth of customer types, all at different stages of the energy transition. Some companies may have an advantage by being able to focus on their core customer heartland of prosumers or energy engaged with a narrow product or service portfolio. Bigger or less specialised players with a broad customer base must manage this additional complexity cost-effectively and still be considered as a trusted advisor to each customer. The robustness of a company’s customer data (accuracy, completeness, timeliness etc) may determine how well it can meet its customers’ evolving needs.
Portraying energy consumption data
We’ve inferred that data holds the key to developing many personalised energy service propositions. But customers must feel reassured about any such propositions, so it’s worthwhile considering the energy insights interface which forms the basis of their understanding. This is particularly important in engaging mainstream customers where there’s often less data, less interaction and so less opportunity.
We expect to see advances in how energy data is displayed, packaged and communicated to customers, particularly with the mainstream audience in mind.
Display – solutions that convey insight in a simple, fast and intuitive way with strong visual concepts like traffic light indicators will out-perform data heavy charts. Layering of insights such as hover buttons or screen swipes for further detail help meet multiple customer needs in one well-designed solution.
Packaging – personalised energy insights compartmentalised within a multi-purpose customer app will drive greater customer visibility and use. Separate apps from different business units will be combined to show the full customer offer, encourage deeper engagement and enhance cross-sell opportunities.
Communication – reducing reliance on customer pull to relevant content is important for less engaged customers. We envisage a blended approach, with greater focus on push notifications for relevant customers to build a virtuous circle of increasing customer engagement and trust.
Companies who can best leverage energy customer and consumption data and develop a customer interface and experience that is compelling for all, will help unlock value as they support customers through the own personal energy transitions.
For more information on how best to improve customer engagement, energy efficiency and value creation using energy consumption data, do get in touch.