RMI publishes report on consumer-centered home energy services

According to the Rocky Mountain InstituteYou are leaving WAPA.gov. a large gap exists between consumers’ interest in home performance and their actual investments in home efficiency improvements. Utilities have a tremendous opportunity to develop a new line of services, and RMI’s recent report, The Consumer Connection: A Consumer-Centric Approach to Delivering Home Energy Services, tells power providers how to unlock this market.

RMI researchers found a clear path that consumers follow from being interested in technology to purchasing it for their home. The report helps contractors, utilities and energy auditors understand the pathway and recognize how and when to engage customers, and who is the best messenger for the information. The report also explores the financing options that are most likely to spur residential customers to adopt energy efficiency upgrades.

The basis of the report is a survey RMI’s Residential Energy+ team conducted with 1,210 homeowners from all 50 U.S. states. In addition to learning what types of messengers, financing and timing make most sense to consumers, the team also uncovered other important findings around financing, what customers are willing to pay and what the main motivations are for energy upgrades.

Utility program managers will recognize the triggers that drive home energy upgrades—a new home purchase, a renovation done to sell a home or broken equipment—but the key takeaway is that consumers buy a product when they want it, not when the provider wants to sell it. The study also emphasizes that consumers do not necessarily want to speak to every stakeholder at each step of the process.

Learning which stakeholder is best suited to convey information can be an important marketing tool for service providers. Stakeholders should focus on what they do best and build partnerships with other stakeholders to fill in the gaps and provide consumers with a seamless selection and installation process.

In today’s utility landscape, power providers need a variety of strategies to maintain strong customer relationships and build an environment of trust and collaboration. A customer-centric program that increases homeowners’ investment in energy-efficiency improvements could contribute much to that goal, while supporting utilities’ load management plans.

Download The Consumer Connection for free from the RMI website.

Source: Rocky Mountain Institute Spark, 8/22/18

Persuade your customers to implement energy-efficiency projects

home-repair350Public Power Week, You are leaving Western's site. Oct. 4-10, is a good time to reflect on the public—the consumer—and on the best strategies for making our customers true partners. Empowering them to save energy and control their consumption is one proven path to increasing customer satisfaction, but first you have to convince them to implement energy-saving measures. No matter how effective a technology is, customers will only adopt it if they are comfortable with it and excited about the benefits. Here are some tips to help utilities engage their consumers.

Highlight non-energy benefits
Find out what’s important to your customers (hint – it’s probably not energy efficiency). Focus on the customer’s values and measure with a customer’s yardstick. Audit reports seldom mention non-energy benefits. But if a measure such as lighting improvements can improve worker productivity or sales even a tiny bit, that will likely trump the value of efficiency.

In Selling Energy, You are leaving Western's site. author Mark Jewel discussed how non-energy benefits allowed Lockheed Martin to achieve a 15 percent rise in productivity and 15 percent drop in absenteeism, far more significant than the annual savings on the electric bill. Highlighting non-energy benefits may be more effective than focusing on Energy Use Index You are leaving Western's site. trends.

Explore the non-energy benefits your customers value the most:

  • Reduced maintenance costs, downtime (which could be more than $5,000 per minute for a data center or industrial plant), wasted materials, water and chemical use or inventory.
  • Improved staff productivity, sales, process quality and throughput, power quality, property value, environmental regulatory compliance, safety, profit margins, public relations or shareholder value.

Speak customer’s language
Learn about your customer’s business and point of view. If the decision-maker you want to influence is a CEO, try to think like a CEO. Keep in mind that for most, it’s “Just show me the money!” Top managers are busy people so make a business case that can be stated in two minutes or less (the proverbial “elevator speech”).

  • Reframe project costs from an expense to an investment, and ongoing operation and maintenance costs as protecting that investment.
  • Speak about energy costs as percentage of sales revenue, per unit of product, hospital bed, hotel room, student, tenant, square foot, etc.
  • Note that for a business with a 2-percent profit margin, $1,000 in energy savings is worth $50,000 in sales revenue.
  • Use present value, net present value or modified internal rate of return rather than simple payback or return on investment (ROI), but include these figures as well, if that’s what they really want, and compare with that of stocks and bonds.
  • Try to monetize the value of non-energy benefits.
  • If the customer has multiple sites, suggest monitoring energy intensity and getting site managers to compete for rewards.
  • Use colors to highlight data. Everyone knows that green is good, yellow is okay and red is bad. This can help your customers when they share data with their peers and management. People often make decisions based on emotions and then justify it with numbers.
  • Convert energy savings into something the customer cares about, such as hiring more staff.
  • Make a proposal that shows how a project meets the customer’s stated needs and goals, and is easy to review and approve. A CEO may approve a two-page summary of projects with an ROI of 38 percent but reject a 30-page proposal with details for each project. Stay brief and on point, but be prepared to answer any question about the project.

Start small
Identify some “low-hanging fruit” that can bring quick success and motivate the customer to tackle bigger projects with longer paybacks. Drive by at night to see what machines, lights and appliances are left on. Go after water coolers (which run 24/7), coffee makers, photocopiers and compressed air leaks.

Work with customer’s partners
Many customers will pay more attention to what their long-term contractors have to say than to the messages on utility postcards. To become a trusted partner, provide trainings and midstream incentives to trade allies.

Customers are more apt to consider implementing a measure that jibes with their budget cycle and scheduled downtime. If they already attend trade and industry meetings, make a presentation to these groups. If one customer implements a measure, let their peers know (if that’s okay with the customer). Try to find case studies of successful projects using a similar measure in similar businesses and building types.

Make customer’s customers, occupants happy
Happier occupants make more productive workers. Shoppers in comfortable, well-lit stores spend more money. Healthy facilities reduce sick days among workers and students, whose attendance is linked to federal subsidies for public schools.

Ensure long-term success
Provide adequate training and documentation during implementation to make sure the measure delivers the promised benefits. Promote equipment with automated fault detection alerts and energy savings monitoring and encourage system commissioning.

Respond to concerns
Mark Jewel lists sample responses to typical customer concerns.

  • “We can’t afford efficiency improvements.” The customer is already paying for energy efficiency – or lack thereof – through higher energy bills, which will only increase. Investing in efficiency will pay for itself through reduced utility bills. Encourage the customer to explore the use of capital and operating budgets to fund improvements.
  • “Our building manager can handle it.” Building managers have many diverse responsibilities. They may lack the specialized skills and time to focus on efficiency improvements.
  • “We’ve already done the low-hanging fruit.” Tell these customers about the benefits of deeper efficiency projects.
  • “My tenants pay for energy so I get no benefits.” Efficiency upgrades increase the building value. Tenants appreciate greater comfort and will be able to afford higher rents.
  • “We’re selling the building soon so upgrading now doesn’t make sense.” Upgrading raises the value of the property, especially if building performance is certified. It’s just like fixing up your house before putting it on the market.
  • “It’s wasteful to replace equipment before it fails.” Utility bill savings over five years may exceed the cost of the new equipment.

Not just efficiency
Now look back over the list of tips, and see how many you may be able to apply to other situations besides energy-efficiency improvements. Thinking from the customer’s perspective and figuring out how utility products and services can help them address their most pressing concerns is how to put the “public” in public power first.

Source: Washington State University Energy Extension