What soap and the smart grid have in common

“Cause-related marketing,” which aims to align the social issues that matter most to customers and the commercial goals of the business, has been proven to positively engage consumers. Dawn Saves Wildlife is a great example of this – the detergent-maker not only donates thousands of dollars to wildlife organizations, but has also developed an educational program about the impact of oil on wildlife and has donated thousands of bottles of Dawn to help clean animals impacted by oil pollution. The program helped Dawn make Fortune’s list of the World’s Most Admired Companies.

There are plenty of strong cause-related reasons for the deployment of smart grid technology: more efficient use of energy resources, a smaller carbon footprint, and consumer empowerment, to name a few. These are all are powerful motivators for customers to embrace the modernization of the power grid.

But efforts to improve consumer perceptions around the deployment of the smart grid, in particular smart meters, have mostly fallen flat. Compound that messaging failure with consumers’ suspicions that utilities want to take their personal control away, while simultaneously invading their privacy and poisoning them with radio frequency emissions, and the situation looks discouraging.

One conclusion is that commercial, utility and advocacy organizations that support smart grid roll-outs have simply not demonstrated that their efforts will benefit the causes that consumers support. What’s more, customers feel that messages about cost savings and enhanced efficiency opportunities are inauthentic, as many have already taken measures to reduce their electricity consumption during times of economic hardship.

The Smart Grid Consumer Collaborative’s Pulse Wave 2 Study, suggests that there are two key messages that could raise the level of support for the smart grid among consumers:

  • Smart grid projects will create tens of thousands of jobs and bring an estimated $12 billion to the U.S.  economy in the next two years.
  • Many components of our electricity grid are decades old and wearing out.  Replacing them with smarter technology in a timely way will help ensure the consistent power delivery we depend on.

Will these kinds of messages change energy use actions in any kind of sustainable manner?  They’re a piece of the puzzle, but in themselves they don’t define a successful program of customer engagement.  Especially since, as Deloitte reported in its U.S.-focused 2012 reSources Study, that serious trust issues exist with utilities.

Many consumers – 73 percent, according to the Deloitte survey – believe that while they have done their part to conserve, their bills are still going up because utilities keep raising their rates.  Justified or not, utilities have a reputation for being opportunistic, and smart grid programs are perceived as part of that opportunism. Utilities face a credibility gap.

To overcome that gap, messages to consumers about the smart grid must connect emotionally to consumers.  These connections are critical to altering the often adversarial relationship between energy providers and their customers. Timely access to consumption information, peer comparisons, games and incentives will all help, but utilities must deliver on these promises with complete transparency to avoid the broken promises of early smart grid deployments.

U.S. customers expect energy service providers to address the needs of society by acting on their commitments and communicating efforts to improve the delivery of energy services in a way that gives consumers an authentic voice in these efforts.  Because the deployment of a smarter grid addresses broad social concerns, such as climate change, security, and cost savings, there is an imperative to tackle these issues in the light of day.

The stakeholders in grid modernization efforts must include the energy consumer. When companies and consumers come together with a common cause, a virtuous cycle can begin.

Carol Stimmel is a research director responsible for leading Pike Research’s Smart Grid practice including key industry and client relationships, management of the research agenda for the practice, and personal contributions to consulting engagements and research reports. Stimmel has more than 20 years of experience in emerging technology markets including operating roles as well as extensive experience in market intelligence and analysis. She’s the author of a standard text on organizational management, The Manager Pool. She holds a BA in philosophy from Randolph-Macon Woman’s College.

Images courtesy of Al Howat.