At Brand Cool we don’t use a crystal ball to predict the future. But we certainly do “have a ball” looking at the latest data and uncovering new opportunities for engaging people.
From all indicators, 2015 is set to be a banner year for the energy industry. Transformation is happening everywhere. Government institutions across the nation are plotting the course for creating integrated, self-sustaining clean energy markets. Utilities are kicking off distributed system platforms and smart grid pilots to test two-way communications for supplying electricity. And states are consolidating efforts to redefine how energy efficiency programs are financed, implemented and marketed.
Changes like these will require us to collaborate, communicate and connect differently than we have before if we’re going to advance more quickly toward meeting the aggressive environmental goals that have been set.
Here’s what’s on our radar for this year, along with what your organization might want to think about to create deeper engagement.
#1: Increased competition among energy providers and fluctuating fuel costs will require companies to rethink differentiation. At the Association of Energy Services Professionals (AESP) Spring conference last year, the closing keynote speaker, Dr. Julie Albright asked the audience, “What would it take for utilities to become favorite tech brands?” While she didn’t leave time for an answer, the perfect storm of circumstances occurring in the industry right now signals a wake-up call for utilities to refine their brands.
According to Forbes, over the past five years, consumer expectations have increased on average by 20 percent. Brands have kept up by only five percent, leaving a big gap between what’s desired and what’s delivered. Because utilities up until recently have had a captive audience, this gap is probably even wider. While many utilities are responding by diving deep into plans for updating infrastructure, technology and services, those that put customer research at the top of their “to do” list will have a distinct advantage. If done right, this research will help measure both articulated and unarticulated expectations to get a clearer picture of what’s important to customers and how they view energy. This invaluable insight can then be used to identify opportunities for market differentiation—not just in what utilities can offer customers but in how they can deliver experiences to become more relevant, trusted and valued brands.
#2: Energy saving results to date prove that we need to engage more people, more effectively. Let’s face it. We’re not meeting milestones fast enough for reducing carbon emissions, controlling consumption during peak load times, upgrading building stock, adopting renewable energy, etc.
Over the course of Brand Cool’s research and our work in the energy/behavior change space, we’ve found Dr. Renee Lertzman’s engagement quadrant to be an invaluable explanation of what could be holding us back. The quadrant isolates the four key dimensions of human experience that are critical to effective engagement: Behavioral, Cultural, Technological, and Emotional/Experiential.
Most energy management programs implemented today focus their efforts on only one or two of these dimensions, usually in the form of incentives to foster behavior change or technology and tools to make it easier for people to automate their energy consumption. However, we now know that people engage with energy in an integrative and systemic way. In our experience, emphasizing one or two of these aspects may lead to short-term changes in awareness and program participation, but it will not create the longer-term, more lasting change critical to meeting our goals.
The strongest, most effective strategy is to account for all four dimensions when engaging people. To accomplish this, entities need to make energy more human by exploring the emotional connections people have with it. This starts with applying conversation-based research and engagement methodologies, which invite audiences to be active participants in talking about their relationship and experiences with energy. Conversations like these uncover desires, needs, concerns and latent motivations that can inform and strengthen marketing approaches. If you’re planning on funneling massive investments into traditional marketing this year, you might want to explore how insight from this approach can be layered into engagement initiatives cost effectively and quickly to yield stronger ROI.
#3: Emphasizing monetary messages and cost savings can potentially set your organization up for a backlash. Promising cost savings to customers if they use energy efficiency programs or alternative energy options is a widespread practice. But the ability to deliver on this promise is getting more dicey–especially if you’re operating in a state that’s moving to a distributed systems platform, where regulated and competitive distributed energy players will buy and sell. No one can fully predict the true cost and rate burden that building this infrastructure will have on market dynamics. Nor can economic analysts guarantee that the assumptions they make related to consumer adoption and consumption will come true. This makes financial modeling incredibly difficult.
Utilities in Europe, particularly Germany, that are ahead of the world in evolving their grid have learned this lesson the hard way, losing a half trillion euros in their value. Given Europe’s painful transition and resulting high energy prices, careful consideration should be placed on how utilities (and states) can support an evolution like this here while still keeping their constituents’ trust (especially if they’ll have to end up paying more for a cleaner energy footprint).
Cost saving messages or financial incentives only stimulate the reward centers of our brain. And while they’re effective at getting attention, as Daniel Pink points out in his book Drive, they can backfire because they indirectly suggest that whatever is being incentivized is so unsavory, that there needs to be a reward for someone to do it. We can shift behaviors more positively by using psychological and social drivers. This allows us to appeal to people’s inherent desire to be smarter, more capable and part of a growing movement. This is basically what market transformation is all about: helping people do things better than before. So let’s work together to make 2015 stand out for also transforming the way we engage people in all things related to energy.