Gilbert discusses how Apogee’s digital engagement solutions are changing the way utilities communicate and serve customers.
UMC: Digital engagement is changing the way utilities communicate and serve customers. What ways does Apogee initiate proactive and personalized communication through online engagements?
Susan Gilbert: When we formed the company, customers had to find our solutions on the utility company’s website. Wanting to see more usage of our applications so they would deliver more value, we began working with our utility clients to push messaging to customers instead of hoping customers find it on the website. Working with hundreds of utilities over many years has proven that pushing relevant information to customers drives usage of our applications. Our first initiatives involved electronic newsletters. We found they drove use of our applications by a factor of 10, which is quite significant.
We pioneered creative new ways of engaging customers. Recently, we extended our messaging from just being relevant to a customer to being highly personalized. American Express does this with their annual statements showing your spending by category. We do the same for utilities with Energy Summary Reports sent annually, quarterly, seasonally, or monthly. These statements contain the customer’s energy usage information disaggregated, just like the credit card summary does, but instead of being broken down by type of spending, our reports show energy-use by end-use system and by month. That helps customers understand where their energy dollars are going and communicates that the company cares about them and is trying to provide useful information. Because this analysis engine produces informative and engaging statements, it is now possible to place flags in the code to prompt certain tips to be presented when specific data patterns are observed. For instance, a customer with a widening gap between what our analysis predicted they would use and their actual usage enables a tip suggesting something in the home has changed producing energy usage higher than the previous pattern predicts. A progressively improving pattern can be rewarded with a “Congratulations, your efficiency seems to be improving.”
I must give Kroger credit for driving us harder to invent some of our solutions. When I began receiving coupons from our local grocery store chain, I was surprised to see the coupons were precisely my weekly grocery list. So, that’s what they are doing with the information they keep when they scan my Kroger card to get discounts. That technique went in my mind from being creepy (what are they doing with this information?) to caring (regular items on my weekly shopping list FREE).
So, what results have these reports produced? One client did an exhaustive study of sending customer’s e-mailed end of year summary reports and found a >15 percent bump in customer satisfaction between the treatment group and the control group. That equates to about a 100 point increase on the JD Power thousand point scale. This is quite significant by any measure. And one of the most cost-effective and convenient techniques available.
Upon receiving our first online-video bill-explanation from our communication provider, we set out to find a way of delivering our bill explanations to customers with movies. Finding the price point from others to be prohibitive for our utility clients to send millions of messages, we went to work creating a low cost platform to create movies at pennies a message. That first project’s success lead to more movies. Beat-the-Peak videos produced half a water-heater of load reduction. Storm videos alerted customers to safety measures they needed to take in the chance of an outage associated with the inclement weather. Capital Credits explanations followed and the uses continue to grow. Personalized video messages are captivating and appreciated. Utilities using them are achieving a 30 percent click-thru rate, ten times the average for messaging, and 99 percent of the surveyed customers reported they would like to continue receiving the messages.
As utilities strive to reach millennials, who in 5 years will make up one-third of the adult population, they are finding proactive, personalized, relevant messaging delivered through mobile media channels the most cost-effective approach to reaching them.
We moved on from electronic newsletters to summary reports to videos and are now tackling ways of using the most requested and popular information on the planet: the weather. Our newly released Energy Forecaster predicts bills in the context of the weather. These can be used to attract visitors to the utility website or pushed to customers’ mid-cycle bill alerting them of a coming high bill when there is still time to change it. And to see how much they can change the bill, we offer a thermostat where you can move the temperature a degree or two or more to see the dollar savings available from that simple move.
UMC: What are your current clients biggest pain points? Which technological solution seems to make the biggest difference in solving those pain points?
Susan Gilbert: While each of our utilities’ issues are different and localized to their territory, business challenges, regulatory requirements, they all tend to share these: increase customer satisfaction, drive program participation, reduce costs and raise customer engagement. Our applications are squarely locked on to solving these problems. Personalized, proactive, engaging and cost-effective are the key to the growing acceptance of our applications.
UMC: In 2015, Navigant Research named Apogee a leading vendor of behavioral demand-side management (DSM) programs to energy utilities. How does DSM help utilities educate their customers on energy efficiency and what is the forecast for use of DSM programs in the energy market?
Susan Gilbert: We used to jokingly call DSM “Deceptive Strategic Marketing” because the dollars invested in some of the programs did indeed test the waters for greater use of electricity or beneficial electrification as it came to be known. Today, DSM is localized in states where the legislature and regulators want to see load reduction, particularly before giving the green light to new power plant construction, and I don’t see that changing any time in the future. Why approve new investment and costs when there is a lower cost way to use efficiency and/or DR? In other words, don’t turn the water on harder to fill the leaky tub—fix the leak, then see what supply is needed, especially on a surgical basis. Where DSM is being promoted, our utility clients find an educated customer is a better and more loyal customer. They shift load when needed, they engage in programs, they stay with the utility even when there are other options. Our applications are the most cost-effective method of creating behavior change through education. And education is persistent and bridges generations.
UMC: It was a big year last year for Apogee. Also in 2015, Apogee partnered with Comverge, the leading provider of demand management solutions for electric utilities. What does this mean for the future of Apogee and for the more than 650 US utilities that Apogee serves?
Susan Gilbert: Our business partnerships began 10 years ago with billing system providers where we needed to have customer’s billing information flow to our applications. Customers were not going to sit and enter their 12-month billing history for electricity and gas, we could see that. So the integration, while challenging in some instances due to security concerns, was the best way of mitigating risk and providing great service. SEDC was our first, then SAP, Oracle, Harris and NISC and now most all the top billing systems are in some way integrated with our applications making it easy for new utility clients to activate our applications. Finding that partnering worked well for us, we began teaming with other businesses in other areas, always focusing on the best-in-class providers of whatever service was offered. Some field audit companies partner with us using our software to streamline field audits, we power pre-pay applications by refining the weather contribution to the coming bills, and we have found many companies interested in extending what they do to utilities by adding to our services. Partnering will increasingly be important to our growing company and portfolio of offerings.
UMC: You rolled out a new product in 2014 – Apogee’s Energy Forecaster. With a full year under your belt, what has been the general reaction of utilities and their customers to Apogee’s weather forecasting and dollarizing-degree application on their websites?
Susan Gilbert: There is big WOW factor when people see with a click of a button how much they can save by moving the thermostat a single degree. Most people don’t have any idea what a degree of comfort costs or could save them. Even we in the industry seem to not know. A question I commonly get at meetings and in auditor or CSR training sessions is “How much will it save to move the thermostat a few degrees?” You get a range of answers, none of which are particularly helpful to customers. “You’ll save 3% by lowering the setting by 3-4 degrees.”
Another WOW comes when people see what it costs each day to heat or cool their homes in the context of the weather. People don’t think about that. They think about a monthly bill of $100 or $300 or whatever. But when they see the weather, then the cost and can see into the future extremely high bill days coming, they are more in control of their energy use and might change the thermostat that day. We call it driving through the windshield instead of looking in the rearview mirror, which is what you are doing if all you get in your relationship with your energy provider is a monthly bill. By the time you get the bill, it’s too late to do anything about it.