Five ways utilities can focus on customer loyalty. Loyal lifetime customers

Utilities in the United States can no longer assume that residents will automatically be long-term, loyal customers. Deregulation, community-based energy services, and novel technologies are putting new power into consumers’ hands. Growing ranks of rate-payers across the country can decide how they use energy and what company or technology will provide them with electrons.

Sixteen states and the District of Columbia are deregulated. Community choice aggregation (CCA)—in which local government entities can purchase electricity on behalf of residents—is available in eight states and counting. For progressive utilities, the consequences of this massive shift can and should be viewed as an opportunity—not a threat. The key is to devise and execute cutting-edge programs that provide additional value to customers and thus ensure customer loyalty. Here are five ideas worth considering.

1. Help consumers join the Internet-of-Things (IoT) revolution.

Today’s savvy homeowners are using smart charging stations, smart thermostats, app-controlled lighting, connected appliances, and other WiFi-enabled energy devices to take charge of their behind-the-meter energy use. The intermingling of household devices, connectivity, and data is called the “Internet-of-Things.”

The multi-billion dollar market of these smart home-based energy devices was inspired by geeky early adopters of new technology. However, less tech-savvy mainstream homeowners need a little help in figuring out which connected energy devices to buy, how to take advantage of incentives, and where to sign up for discounted rates. That’s where a utility’s customer-loyalty strategy comes into play.

The Electric Power Research Institute (EPRI) reports that 85 percent of homeowners understand that a smart thermostat saves money on utility bills, but many first-time users of smart thermostats report confusion about installing and using the device.

Utilities to the rescue. Robust info resources and customer-service programs organized by the utility can provide precisely the help consumers need to buy and use energy-saving IoT devices. Those customers will repay the utilities with a higher sense of gratitude and loyalty, in addition to enabling distributed energy resources management system (DERMS) program participation.

2. Establish smart electric vehicle charging programs.

There were about 825,000 battery-electric vehicles on North America roads by the end of 2019. Conservative estimates peg that number to exceed 12 million by 2030. This expanding market means that utilities will increasingly become providers of not only home energy but also transportation “fuel.”

This is a huge opportunity for utilities, but not strictly as a matter of selling more kilowatt-hours of electricity. By providing compelling time-of-use (TOU) EV rates, utilities earn a role as proponents of sustainable transportation, enabling residents and businesses to save more on their monthly electricity bill by charging during off-peak hours. Currently, about half of U.S. investor-owned utilities have optional TOU rates for their residential customers. Many EV owners are passionate about reduced vehicle emissions and will recognize these efforts by utilities.

Last year, Enel X Way partnered with the Smart Electric Power Alliance (SEPA) to survey 3,000 JuiceNet customers across 28 utilities offering EV specific rates on their charging patterns. Our study concluded that EV owners are particularly well-suited for time-varying rates, and 72 percent of non-enrolled TOU customers indicated that they were willing and able to charge their EV during off-peak hours if the standard rate resulted in bill savings and was convenient to use.

Consumers have proven to be fairly price-sensitive when it comes to TOU rate structures, and it was found that for every 10 percent increase in peak to off-peak pricing, off-peak energy usage decreased by 6.5 percent.

More than 20 utilities provide TOU programs that shift EV charging to non-peak hours. Several utilities, such as Hawaiian Electric, give away free EV chargers, like the JuiceBox line of connected chargers. Others help employers by providing faster chargers and better EV rates to encourage workplace charging.

These efforts pay off big-time when it comes to accelerating even more EV adoption because first-time buyers want to make sure they have abundant places to charge. Later on, enrolling the growing legion of new electric vehicle owners in demand response programs becomes much easier.

3. Set up an online energy marketplace.

Smart thermostats and smart EV chargers sound great. But utility customers shouldn’t be left to their own devices about which products to buy or how to sign up for rebates, discounts, and special rates.

Ill-considered purchases on mainstream online shopping sites can be counter-productive. So utilities across the country are getting directly into the e-commerce business. They are setting up and hosting web stores for energy-saving products, like “learning” thermostats, EV charging stations, and sensors that turn off lights when nobody is in the room.

Guidehouse Insights reports that these online energy marketplaces will generate $118.2 million in sales in 2020, growing to $468 million by 2029. But those revenue numbers don’t count the full value of positioning a utility as a reliable source for these products or immediately enrolling rate-payers into loyalty programs as part of the check-out process.

JuiceBox Marketplace helps utilities optimize smart charging program implementation with cost-effective go-to-market options. Our solution integrates tailored co-marketing campaigns, an easy customer-purchase process and account authentication, and vetted installation services.

“Enel X Way was able to deploy 300 JuiceBox smart charging stations in just four months to residents across Hawaii. The customer marketing, instant rebate and program enrollment were rolled up into one seamless process,” said Aki Marceau, director, electrification of Transportation, at Hawaiian Electric.

4. Engage mobile app users.

Millennials and Gen Z expect to have the convenience of managing their lives via their phone. That’s why there’s an app for nearly everything these days. Regardless of the generational demographics, customers appreciate the self-service benefits of seeing bills on their phone and setting up automatic payments. And yet, very few utilities provide a personalized mobile app for managing bills, making payments, and accessing energy-use dashboards. That’s a shortcoming for utilities that want to build customer loyalty.

The expense for building an app pays off with reduced calls to customer support. The app also becomes a new communication channel for providing critical info about service work and outages via push notifications. And a utility app becomes a means to convey useful energy-saving tips and tricks via engaging mobile experiences.

Enel X Way's JuiceNet app ties into a robust set of EV-related functions. For drivers, the app provides a means to access grid incentives while better understanding charging patterns. Meanwhile, for utilities, JuiceNet Utility Edition enables program managers access to charging behavior across their service territory. That’s the key to aggregating and managing charging station demand.

5. Launch a loyalty program and gamify it.

Retailers and credit-card providers commonly use formal, branded customer loyalty programs to earn and retain their users. There are thousands of these rewards programs that issue everything from airline miles to gift cards. The same methods of granting discounts and special perks are on the rise in the utility industry.

BC Hydro rewards customers that reduce their energy bill with cash payments. Puget Sound Energy offers perks to customers who use smart thermostats and JuiceBox smart chargers, which were free to residents that were willing to participate in PSE’s Up & Go Electric: Residential & Off-Peak Smart Charging Program. And customers of Texas’s Direct Energy, an electricity provider, can save 10 percent on their power bills by shifting their use to off-peak hours.

Everybody loves a deal, but the success of many of these programs is based on gamification. The human brain is wired to enjoy challenges, get positive feedback, and engage in social bonding. Getting utility consumers to sign up and use a loyalty program requires establishing clear goals, a compelling storyline, and a system of gratification. Game-based loyalty programs also need to be easy and transparent. At the same time, many programs rely on smart meters and connected systems to the back-end systems require some finesse.

When done right, entire households can be activated to save energy and shift to renewable power. And have fun in the process. With every energy-efficient action, customers earn more points for consumers.

Most utility customers don’t want to switch from their existing provider. But the onus is on the utility to wow consumers with outstanding service, cutting-edge new tools, and great online experiences.

Regardless, utilities can no longer assume that their customers will remain compliant buyers of generic kilowatt-hours of electricity offered at a regulated price. Instead, utilities can help their customers become energy-smart, app-using, EV-driving prosumers—instilling a newfound appreciation for the company that guides them through the process.