Utilities know — customer engagement is low unless there's an outage or a billing problem. Meanwhile, those same customers are engaging with tons of other brands through websites and their smartphones: Uber or Lyft for transportation, PostMates or Seamless or Dominos for dinner, RunKeeper or MyFitnessPal to track their exercise activities, and Netflix to relax in the evening. They even engage with their cable company — often a separate utility — on a more regular basis. But imagine taking some of that time and getting customers to engage with their energy use through those same interfaces. It's possible, it's happening, and it's a major business line for the utility of the future.
It All Starts With a Problem
In the startup world, there's the cliché how-it-all-started story that everyone knows: a garage, a random piece of hardware, and two engineers. For apps that are shaping the customers and utilities of the future, the watershed moment is marked by a problem.
In 2003, the two founders of Recyclebank noticed that the recycling industry was, ironically, experiencing a ton of waste. When apps and gamification were barely in use, Recyclebank aimed to change the way recyclers were behaving by engaging with them. CEO Javier Flaim said the parallels with electric utilities are huge.
"The parallels are absolutely right there," Flaim said. "Every municipality was different, and assets and infrastructure varied city by city. There wasn't a lot of data on who was recycling. It seemed like there were a lot of problems and not a lot of solutions."
Now, communities that hire Recyclebank are seeing residents engage with recycling in a way they haven't before. This is thanks to Recyclebank's use of behavioral science to change their users' behaviors. One strategy is called nudging — just like those notifications you get from your fitness or money-saving apps. Shave off a few calories here and win some points, or save a few dollars today and have a big nest egg tomorrow. With Recyclebank, it's the same but for recycling.
"I know you didn't wake up dreaming of aluminum cans," Flaim said. "But if the app gave you a notification that today is recycling day, and you get 50 points if you pledge to recycle a certain number of items, it makes the communication fun, and it triggers an action. We believe that kind of perfect experience will ultimately change customer behavior."
Communication Is (Still) Key
That perfect experience is called a Goldilocks moment, and it's a key strategy at Simple Energy, a marketplace platform for utility customers. At Simple Energy, a utility-branded marketplace provider, there isn't even any new technology at hand. It's simply about delivery. For utilities, delivering a message from a trusted source is a boon.
"We started the company with the understanding that there is a big disconnect with energy users," said Simple Energy CEO Yoav Lurie. "None of this is new technology. Some of it is a new price, but most of it is a new delivery model. We didn't invent a new EV or battery — we just got people to use what's already out there. I think the biggest thing we did was make that interaction between the customer and the utility seamless."
Simple Energy's marketplace platform sends targeted marketing emails to utility customers with clever subject lines, like the $6 six-pack (a marketing campaign for efficient light bulbs) or a Valentine's Day reminder to dim the lights and save some energy.
"People trust their utility or at a minimum think an email from their utility is important enough to open," Lurie said. "The level of engagement is pretty outstanding, which is why most of our clients have re-upped and expanded."
Simple Energy works with utilities, solar installers, rebate providers, appliance manufacturers, and other service providers to engage customers and facilitate tens of thousands of streamlined transactions between utility and customer.
Shaping Customers, Shaping Utilities
At Recyclebank, the app's top users are called evangelists, and they're taking their recycling to the next level. For Flaim, this is the customer of the future. At some point, these users get so good, it's no longer about individual usage, and they take their engagement out into their communities.
"People can go to their neighbors and tell them, ‘You can have an impact, too,'" Flaim said. "They can create community groups through our platform; sometimes we help them create a contest. I'm sure these same parallels exist in the energy sector."
And in fact, they do. Top users of an energy-use gamification app offered by Powerley are also going beyond just their own energy use. Through the app, users see exactly how much energy they're using through each appliance in their home.
They're thinking about energy use on the whole. And along with their evolution, comes the evolution of the grid from a service provider to a two-way communication provider.
"When we think about the future, I think it's going from a connected home to an intelligent home," said Powerley's chief technology officer, Kevin Foreman. "It not only allows the consumer to have what they want, when they want it; it includes new features: rules about when the lights go on, allowing them to shut appliances off or turn appliances on. The home understands you and where you are and what time of day it is. I think we're starting the journey in creating this intelligence."
But without the communication that apps like Powerley facilitate, the intelligence doesn't exist. Foreman said Powerley's goal is to bridge the gap between the smart meter and the smart device. That requires educating customers about the energy that flows through it all.
When customers use an appliance, they need to understand how much electricity it consumes; otherwise, they can't connect their behavior to their electric bill. Foreman likens it to dieting and nutrition apps, and how they motivate customers to lose weight.
"One of the things we were not afraid of and really embraced was that we needed to teach homeowners what a watt or kilowatt was and divorce them from dollars and cents, because it isn't a 1-1 ratio," he said. And just like nutritional empowerment is getting grocery shoppers to read nutritional labels, energy empowerment has appliance shoppers actually reading those energy use labels, Foreman said.
An Intelligent Future
Intelligence is the very fabric of the utility of the future. At Itron, an advanced metering infrastructure vendor, the intelligent future grid is called the active grid. It connects to the devices that communicate and collaborate with each other to make decisions in real time.
"The active grid is open, secure, robust and interoperable. It can connect everything from utility smart meters, distribution sensors, and control devices to urban infrastructure, such as streetlight controls, traffic sensors, EV charging stations, and solar installations," said Tim Wolf, director of marketing and services at Itron.
Intelligence also defines the customer of the future, Flaim said. Apps that engage consumers help them become better customers.
"Ultimately, this technology helps me think more positively about my utility and maybe in the process allows me to leave behind a better planet," Flaim said. And unlike the recycling industry, utilities have access to what Flaim called a gold mine of data — all their customers' usage patterns, even without smart meters.
The Public Power Position
Public power utilities are well positioned to provide the personalized service and interaction to cultivate both their next generation of customers and their future business models.
Public power utilities know the investor is the ratepayer is the customer. Lurie called it "wonderful alignment between ownership, control and management."
"The city has that alignment and can have that desire to reduce cost, to increase the quality of service, to make proactive energy decisions, and to do so in a way that's advantageous to the grid and the environment," Lurie said. "It's no wonder so many cities in so many ways are leading much of our national policy — cities have the potential to do this, and some cities have their own utilities. Those that do can leverage their utilities to do pretty amazing things, and I'm super excited about it."