The Three E’s of End User Engagement
By Rahul Aggarwal
Utilities need to develop articulated strategies for end user engagement to ensure the success of smart grid rollouts. Only a meaningful customer experience of enablement, empowerment and education will produce the fully engaged end user who fully exploits what the smart grid has to offer and paves the way to the smart city and a smarter planet.
The smart grid means different things to different people. One way to conceive of it is as a visionary framework for future energy generation and distribution, in which network efficiency and resiliency will be improved, environmental sustainability is addressed by employing more clean and renewable resources and end users are more fully engaged. Overall, the desired results would be achieved with the functional integration of operations, information, communication and consumer technologies.
Looking a little further ahead, the smart grid also is touted as the foundation and vision for smart cities and a smarter planet.
So, what does the smart grid promise the end user? Direct benefits may include a lower electric bill, greater knowledge and understanding of the energy ecosystem, and more control over energy usage and costs. More broadly, the smart grid will help bring a greener environment in which more electricity is generated by renewable and clean energy sources, and is transmitted and distributed over efficient and reliable networks resulting in fewer outages.
With an average monthly household consumption of 950 kWh at an average cost of 15 cents per kWh, the typical American household spends about $1710 on electricity per year—approximately 4 percent of the average household’s annual income. Potential savings resulting from the introduction of smart grid technologies could amount to 10-15 percent of annual household expenditures and would translate into extra disposable income of $200-300. But those savings can only be realized when the end user is actively engaged, that is to say, educated, enabled and empowered to take advantage of smart grid initiatives.
Traditionally, utilities have not interacted much with their end users, as their focus has been on building and maintaining infrastructure build, meeting end user requirements from behind the stage, so to speak. They have had a captive market and never had to compete for customers. Active engagement typically has been limited to handling service activation or de-activation requests, sending out monthly or quarterly bills to households and tracking payments. A few customer engagement initiatives in the past have focused on subsidizing energy audits for households but have resulted in limited success due to the high costs making desirable changes and questionable return on investment. Thus, involving end users in the smart grid implies a huge cost, effort and mindset change: Customers must be told what is to be gained from and how to make use of variable pricing, advanced metering, smart appliances and home energy management systems, to name just the most obvious innovations being introduced.
To manage that effort and spare unnecessary costs, it is imperative that the forward-thinking utility develop a customer engagement strategy, as advanced metering is being rolled out. An engaged end user is the key to long-term success.
Strategies to ensure connecting to and engaging with the end user would mean rolling out a mix of smart, analytical, intelligent and timed information based on the following basic features, but with some variation depending on expected payoffs.
Educative - A mix of statistical end user consumption information, combined with dwelling and climate data which is easy to read and comprehend by a non-technical person. This may be in the form of graphs, dashboards or any other intuitive representation that is centered on the user environment.
Enabling – Billing and accounting data, metering information, simplified dynamic energy pricing and rate plans, energy consumption charts of similar neighborhood dwellings, and so on.
Empowering – Information on current programs and rebates, tips on energy savings, calls to action, modes of engagement with the utility, and so on.
Utility managed or sponsored “energy apps” for smart devices (for Apple, Android or other platforms) can connect over the network to smart meters to receive energy pricing signals from the utility and perform home automation functions by integrating into the home area network (HAN) to control programmable thermostats or other networked devices.
Such user applications for information dissemination and interaction should be device and media agnostic, to be always available on smart phones, networked HEM devices and so on. Using big data analytics to provide relevant, targeted and event-based messaging and intelligence will help end users take control of their energy usage and ensure potential savings.
Utilities have been the pioneers in cloud business applications, with EaaS (Electricity as a Service), IaaS (Infrastructure as a Service) and so on. In parallel, as engineering conglomerates have sought to achieve efficiencies across generation, transmission and distribution, utilities and governments have promoted alternative grid models—notably microgrids— to enhance resiliency and reliability. That constellation of factors is creating ever-new needs for end user engagement, making education, enablement and empowerment all the more important in the ultimate success of smart grids. Utilities have a big opportunity to become the trusted advisor and also benefit from customer retention in the future when the end user has more options to choose the provider.
Rahul Aggarwal is a Senior Global Product and Marketing Management Executive and has held various positions with Siemens globally. He has lead teams on Strategy, Marketing, Product & Solutions Management and Sales in Asia Pacific and North America. In his telecommunications industry career, he has focused on creating products and solutions that facilitate growth, propel multimillion-dollar revenue gains and generate traction in highly competitive markets. He is skilled in business modeling and value quantification, strategic analysis, process definition, team mentoring and forging strategic partnerships along the value chain. An engineering (electronics and communications) graduate from the National Institute of Engineering (India, 1992) with an M.B.A. in Marketing from the Institute of Management Technology (India, 1999), he has attended executive and management development programs at Deakin University in Australia (2001) and the Stanford Executive Institute, Stanford University (2006).