How to Succeed in Energy Management Where Google, Microsoft Failed
How to Succeed in Energy Management Where Google, Microsoft Failed
I have a confession to make. When most companies come to me to demo their latest energy management gadget or app, I love them ... for about a week. Then my interest fades.
I've been working on energy efficiency for 20 years and care deeply about the issue, but this raises the question: Is it possible to get large parts of the population to engage -- and stay engaged -- in energy efficiency?
Witness, among other things, Google's recent retreat from the home energy management space, and Microsoft's pivot away from consumers toward building management. If even an Early Adopter strategy consultant and energy geek like me, who thinks the fate of the planet hangs in the balance, still doesn't use the industry's energy management solutions, what are we to do?
1. Make it fun and fulfilling
2. Make it really, really easy
3. Make it mandatory
Make It Fun and Fulfilling
Most industry pilot programs and academic research all show that I'm not alone -- people's interest in home energy management drops off sharply after even a month. The same holds true on a commercial level: Performance of LEED buildings quickly drops off due to the human factor, as building owners and managers lose interest.
What can we do? Tap the competitive spirit, or make energy efficiency happen as an invisible consequence of something more engaging and meaningful.
Some innovations of this type are already emerging. Opower, Efficiency 2.0 (full disclosure: Its management team includes GreenOrder alumnus) and Simple Energy are three examples of companies using advanced behavioral techniques to boost efficiency program participation rates, benefits, and impacts. Efficiency2.0 customers compare their energy savings to that of their peers, competing for prizes. RecycleBank uses arbitrage to delight customers with discounts and deals.
These approaches work in commercial buildings as well. Smart Energy Now -- developed by Duke Energy as the cornerstone to Envision: Charlotte, the bold campaign to make Charlotte, N.C., the most sustainable urban core in America -- aggregates and displays real-time energy use among participating commercial buildings with more than 12 million square feet under management.
But behavioral programs like those are just the beginning. Utilities, technology providers and other energy players should be looking to even less conventional ways to delight their customers through innovative energy services. One perhaps not-so-whacky opportunity may be to use gaming principles. Check out these stats: Farmville has more than 39 million monthly users (9.6 million active daily). Guess what the average user profile is? Teenage male? Not! Would you believe: middle-aged woman? That's right, and those same women are key decision-makers on residential energy use and spending. Why do they play online games? One of the main reasons, former Zynga CFO Mark Vranesh told me recently, is community. It's a platform for social interaction. So, imagine instead of an energy management dashboard that you use in isolation, customers get an interactive social game with energy inside?
Keep in mind also the innovation happening in advertising within games. Not that you want to serve up ads for Pepsi with your demand response program -- but the customer understanding that underlies what Kiip, Tap.me, and other innovative players do in this brand new space might yield insight into the new frontier of enlisting and inspiring power customers.
Make It Really, Really Easy
Back to my true confession. What I really want is an On/Off button.
On: Make me efficient (adjust my HVAC, pool, fridge, etc. for peak shaving and grid stability), tell me how great I am to help and pay me to do it. Off: I'm having a cocktail party -- want AC cranking, pool warm, beer cold.
Related to this, many power customers just don't have the hardware or user skills to handle whizbang complex efficiency solutions. Southern Company Services CEO Susan Story says that approximately 25 percent of their customers in some states don't have Internet, and 18 percent have no bank account. These customers pay at one of Southern's 250+ offices (where, by the way, they have a social experience in what amounts to a community center, and make a personal connection with someone from Southern – which generates an average 15 percent customer satisfaction boost).
Question: What percentage of Southern Energy customers have a cell phone? How about power customers nationally, even globally?
Whether in Alabama, or Chicago, or even Shanghai or Mumbai, the number of electric power buyers with cell phones is headed close to 100 percent.
Question: What's the fastest growing platform for payments worldwide? Mobile devices.
Efficiency programs could combine the On/Off button idea with mobile platforms. They could send me the following text: "Click here and we'll send you $1 to raise your thermostat 3 degrees for the next hour. You'll be helping prevent pollution and a possible power system failure."
Make It Mandatory
Whoa. I know some of you just choked. But I include this third option for two reasons.
First, compare it to the two solutions above. Which do you think you prefer? Second, stop to think about the full range of regulatory approaches that might combine with other parts of the energy efficiency solution (new business models, technology, innovative financing, etc.).
Don't fret, not all regulatory options will make you choke. Here's an example: mandatory energy labeling on houses, as a requirement for sale. This approach has had a major impact in the U.K. This whittles down demand for electrons but opens up new market opportunity for services that help homeowners and developers advance energy efficiency. And a policy measure like this can be easily combined with utility-based programs to help customers buy and sell houses wisely.
Understanding What Customers Want
The main point I want to leave you with is this: When you think about the energy customer, understand that they aren't just ratepayers, and they're not even just customers. They are people just like you or me, or someone you know (it's true to a degree also for commercial and industrial customers). Take a lesson from Atticus Finch, one of my heroes: "You never really understand a person until you consider things from his point of view -- until you climb into his skin and walk around in it."
After decades of underwhelming the energy efficiency opportunity, we're finally getting to some breakthrough and action on energy efficiency, now that we're climbing inside the skin of people that use electricity to figure out what they really want and how they are really motivated.
Image CC licensed by Flickr user me and the sysop.