Heard about the imminent launch of the Green Deal? Don’t be surprised if your customers haven’t, because the government’s flagship energy-saving initiative is to be rolled out with a tiny £2.9 million marketing budget for its launch on Monday (28 January). One survey claims more than 60 per cent of the public have no idea what the Green Deal is.
A Department of Energy and Climate Change (Decc) spokesman admits the marketing money is paltry but says the plan is to target those likely to be sympathetic to energy efficiency via a mainly digital campaign using social media “and some targeted articles in the print media”.
This lacklustre approach is symptomatic of the turmoil in energy marketing. The government’s ruling that suppliers must simplify price structures and place all customers on the cheapest price plan for their needs has forced strategic rethinks across the board.
What is clear is that two distinct forces will dominate marketing agendas in the year ahead and far beyond. One will be the increasing use of social media, driven by more creative use of apps, loyalty and personalisation services.
The second will be preparations for smart meters which, by 2019, will have been installed in every home in the country and will have removed the need for manual meter readings and estimated billing.
Installation will not begin in earnest until 2014, but already companies have spent millions of pounds on the infrastructure. “The industry will have never seen anything like it,” says Kevin Peake of AO Marketing. “The arrival of new technology is going to transform the utility landscape and bring huge opportunities for marketers and customers alike.”
Today every power bill is attached to a household, much as it has been for generations, but within a couple of years it will be possible to attach a bill to an individual and build up a picture of their needs, much in the same way that phone numbers connect to individuals now rather than houses. “It will provide for a personalisation of the service in a way that is practically unthinkable at the moment,” Peake believes.
As a result, there is likely to be a hugely expanded range of propositions available and for the first time, customers will be offered deals that are tailored specifically to their needs and consumption patterns. This directly contrasts with the government’s recent push for tariff simplification – which aside from anything else presents a challenge to utility marketers trying to convey a consistent message.
“The new sales information systems will allow a far deeper and richer view of the customer and allow for the creation of many more customer propositions,” says Peake, a former marketing director for Npower until he left to set up his own firm. “It will be a revolution in how utilities have dealt with the customer, and the marketing will be driven by this. It will allow for a multi-dimensional view of the customer and their needs.”
Tesco famously has more than 100 customer segment profiles into which it can pretty much fit anyone who passes through its doors. Power companies to date have only have between ten and 14 because the data has not been available for anything more detailed. That will all change.
Companies like British Gas, EDF and Npower are already in the process of migrating their accounts to a new generation of processing systems. Npower, for instance, has spent £100 million on its new system and, while there have been natural teething problems, these are in the process of being sorted out.
This tsunami of information will bring about its own stresses. Gathering, holding and mining this data will mean a greater investment in data storage and access technology. The growing symbiotic relationship between marketing and IT departments will gain even more momentum, as every supplier strives to gain competitor advantage in their customer engagement strategy.
Rhys Kealley, lead analyst at Datamonitor, says social media will be crucial for marketing any future energy conservation campaigns, particularly because it is a two-way channel through which messages can be put out, but also customers listened to and their feedback fed in as campaigns develop. ” was leading edge 18 months ago, but its an absolute necessity now,” he says.
Kealley says adequate staffing of social media channels is needed so customer complaints can be jumped on as they become apparent. “So much of managing consumer complaints is how you deal with it. It is so much about how you conduct yourself. Social media allows for a conversation with the consumer and that can change perception.”
So far in Britain, there is little to match the creativity of some of the social media marketing being tried out in the US. One app launched in a collaboration between Facebook and utility customer engagement specialist Opower takes advantage of consumers’ competitive nature. It loads users’ energy consumption data and allows them to compete with their friends and neighbours, even allowing them to form teams and battle energy saving out via Facebook. Sixteen utilities now participate and provide incentives to spur on the competition.
Or take Duke Power’s initiative in creating a drama about a family called the Powers, incorporating energy-saving advice. It is shown in “webisodes”, and again there is a competitive element with virtual prizes.
But the really innovative work being done today in the US
that will surface in energy saving campaigns of the future in the UK are taking place in the not in software but in the psychology departments of universities. Behaviour modification psychology is the rather worryingly Orwellian name for this new discipline and it may soon play a key role in energy conservation marketing.
Psychologist Angie Carrico has carried out studies which prove that concern about climate change is increased if people are asked about the topic while surrounded by dead plants, and concern for drought is heightened among people who are questioned about the topic while they’re eating dry foods such as pretzels. This helps to overcome the “invisibility” of the energy issue.
Barry Wood is a freelance journalist
This article first appeared in Utility Week’s print edition of 25th January 2013.
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