Purchase Advisor

An example of an easy-to-use online purchasing advisor. Could an electric utility put such an interface to use to offer special deals from corporate partnerships or to otherwise influence customer behavior and improve loyalty?

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A look at the Netherlands most popular online marketplace

http://www.marktplaats.nl/

# of Electric Appliances in the Dutch home

http://www.rtlnieuws.nl/nieuws/binnenland/bijna-100-elektrische-apparaten-elk-nederlands-huis

“The Dutchman in 2012 averaged 92 electrical appliances at home. People over 50, most electrical appliances at home: 102 average.

The number of electricity consumers in the home has almost doubled over the past five years. Houses of over 50s are often full of electrical appliances because they have to buy new stuff, but do not throw away old ones.”

Could this be grounds for aiming a service at older customers that helps that get rid of their old, electricity-guzzling appliances on their way to their dream home?

Lessons from Citibank’s ThankYou Rewards Program

Citibank’s “ThankYou Rewards” program is large, multi-faceted venture in improving customer loyalty. Customers can use their points to buy merchandise from retailers such as Bed Bath & Beyond, Amazon, and Drugstore.com, plan their next concert outing through Live Nation, or give their points to a friend as a gift – a variety of offers are lifted on the home page of the site. Citibank can also partner with individual dealers or producers, like Sony, for instance, to offer special deals.

ThankYou Rewards also features a “Your Wish Fulfilled” program in an apparent effort to connect with their customers at an emotional, less material, more human level – even if those wishes may sometimes take the form of consumer goods. Customers can contact a “Wish Specialist” to see if their individual dream reward can be made possible.

The Mobile Purchasing Advisor

Shopkick

How it works:

Mobile application whose users receives points or “kickbucks” whenever they enter a partnering retailer’s store, as well as when they pick up and scan and item or make a purchase in the store. Kickbucks can be redeemed for gift cards, facebook credits, as well as specific promotions at the same or another store – you are encouraged to make more purchases. Partnering stores get more traffic and revenue, and Shopkick gets paid a commission, given the additional traffic/revenue. Users can also now browse and buy items within the application itself. Hardware installed in participating stores communicates w/ smart phones.

http://www.businessinsider.com/shopkick-iphone-app-demo-2010-8?op=1

Customization and the home

“But outside the UK, self-build is flourishing. In Belgium, which like the UK is densely populated and heavily urbanised, more than six in 10 homes are self-built. In the Netherlands the figure is three in 10.”

…”The Homeruskwartier district in Almere [near Amsterdam], a city with a population of 180,000, is the first self-build project attempted on a truly large scale…The local authority draws up the street plan, then makes the plots available at standard commercial cost. Local people, freed from any further planning restrictions, can then design and build whatever takes their fancy.

…Keeping homes affordable is key to the Homeruskwartier project, which means creating plots for self-build flats as well as houses. Tellinga cites one group of 25 individuals who built a block of flats. Including the plot and building, the cost of each flat was just £69,000, without any subsidy. Cutting out the developer’s profit – and those expensive marketing suites – saves a small fortune.

But self-build is not just about money. “What I like most is the way people develop their curiosity and skills – they bring ideas and test construction techniques more than any developer would. We don’t insist on sustainability requirements, but it’s amazing how much people just do it themselves,” says Tellinga.”

United Consumers Energy

(Via google translate):

“Hot deals and fare guarantee

• Via United Consumers can receive a fixed annual discount of € 30.00.
• The first year will also receive a welcome bonus of € 70.00.
• We follow the tariffs of your area dealer.
• Used to get 1.00 cents consumption reduction, on average € 60.00 discount per year.
• Your total discount is as average to more than € 340.00 in three years.
• So you are always cheaper!

Good service and green power, better and cheaper!

• United Consumers Energy awarded best energy supplier.
• In addition, we make your green power always free.
• Registration is sufficient, we do the rest.”

Other important features:

Subscribe and save: Enter your postcode, sign up for electricity and / or gas off and start to save.

“Calculate your energy rebate” tool.

Using the Behavioral Wedge for household efficiency

Another paper discussing (perhaps best) the approach of targeting the behaviors that matter, and more importantly considering the time horizon for performing large actions like replacing major appliances or heating systems.  The addition of the ‘behavioral plasticity’ term (turnover in 10 years) makes it possible to understand the total impact of an intervention – some things that should have a reasonable return but require a large behavioral investment may not be worth putting at the top of the priorities list.

An example they cite is thermostat setbacks: if it only has a 35% plasticity, the savings at year 10 are less than half of the potential–people need to be constantly motivated (beyond inconvenience) and possibly helped by technology.

Perceptions of energy use vs. reality

As Cosimo from Sneakers says, “everything in this world, … operates not on reality – But the perception of reality.”

this is a problem as people for the most part overestimate the impact of curtailment behaviors (e.g. turning off lights, reducing HVAC) and underestimate the impacts of other actions.  Part of the cause of this is the media campaigns focusing on curtailment behaviors, rather than the actions which will reduce energy use the most.

Education can be an effective tool for aligning perceptions with reality, and a media campaign by E.ON could be the vector for this.

Where the gains are

The Short List, by Gardner and Stern, describes the relative contributions of different parts of American (and by extension developed nation) energy consumption.  The key issue is that the big energy consumers in the home are HVAC and water heating.

If space heating is approximately 19% of the energy use, that’s the big place to focus efforts, but the problem there is that the interventions in that space are for the most part one-time or infrequent.  Insulating cavities and lofts has a huge return on investment over time, as does sealing drafts, which is good and bad for our purposes. These projects, ranging from minor (caulking windows, installing door stripping) to major (insulating exterior walls) require planning and execution, and may not be DIY projects for the idle afternoon.  The good part about these things is that once they are done, there isn’t more engagement required.

Water heating (including hot water used in clothes washing) is responsible for 6.5% of the energy use.  Upgrading water heating systems (installing a tank blanket, tankless heater, and heat recapture exchanger) can reduce the energy required to heat a volume of water, and curtailment behaviors (e.g. shorter showers, washing clothing in cold water, and using a dishwasher/good hand-washing practice) can provide some benefit, at the expense of some potential discomfort or customer engagement (E.ON shower timer anyone?).

Lighting overall has a relatively small overall slice, 6.1% – and this is also amenable to upgrades (LED bulbs, occupancy sensing), and behavioral interventions/habit design.

In terms of our E.ON strategy, the key issue is how to (1) accomplish meaningful energy use reductions and (2) improve customer satisfaction.

1. We need to encourage customers to make the one-time investments (time, inconvenience, money) in home upgrades and maintenance.  Insulating the loft is not sexy like a Nest, but it’s worth a lot more in terms of carbon.  The good part is that you do these things once, the bad part is that they’re probably not really good for cultivating goodwill on a regular basis.
2. The little things like timing showers and unplugging chargers is a recurring touchpoint (you do these things 18 times a day), which can be either endless frustration (bad), moral licensing (worse?), or a way to get the brand image into people’s consciousness.  If done right the little things can help bring E.ON to the top of mind, and help people to do good things meaningful in aggregate after taking on the big projects.  One of the hazards to avoid is having people only do the little behavioral things and not make the investments in the big things that will save them money and carbon over the long term, at the expense of one-time investments.

http://www.tandfonline.com/doi/pdf/10.3200/ENVT.50.5.12-25