In 2019 the publication of the Climate Change Committee (CCC) report on achieving net-zero, concluded that an energy transition to net-zero in the UK by 2050 would be challenging, but was both affordable and achievable. The passing of legislation by the UK and Scottish governments to set legally binding targets for net-zero carbon emissions was an enormous milestone for energy policy.
The pathway set out in the CCC report and the adoption of net zero targets by the UK and Scottish governments has done much to catalyze the whole of the UK’s energy sector. However, more still needs to be done. As recognized by Ofgem’s customer and behavioral insight team report published in October last year, much of what needs to be achieved is reliant on societal and behavioral change:
“Changing consumer behavior is crucial to hitting net zero: the Committee for Climate Change estimates that 62% of the actions required will involve some element of societal or behavioral change. These include changes to the way we heat our homes and power our vehicles.”
“But by better understanding consumer views and the drivers of consumer behavior, products and services and regulations can be designed in a way that helps to enable the desired behaviors.” 1
The good news for energy suppliers is that changing customer behavior is not an impossible or daunting task. It involves empowering customers with the right information and ‘nudging’ them to make the desired change.
‘Nudging’ is a proven behavioral science based theory, and it forms the basis of Advizzo’s successful customer engagement strategies and solutions. It’s based on the theory that people are often unable to make good decisions when they lack experience, context, knowledge, or are overcome with inertia.
More often than not, we allow our autonomous nervous system to make decisions on our behalf, bypassing the conscious thinking process. The solution involves guiding people in the right direction – towards the more beneficial option, which for the purposes of climate change and energy transition goals, is to save energy. You can read more about the theory of nudges in our blog, ‘How a nudge can help your customers save energy and water’.
Over a decade of behavioral economics research has revealed that ‘nudges’ are highly effective in influencing consumer behaviors. They are therefore a critical component in the push towards energy transition, and here’s why…
To restore trust
Even though energy is an essential service, to date, energy suppliers have been very slow to engage with customers. Instead they have tended to be reactive rather than proactive, relying on customers to get in touch if and when there is a question or problem. As a result, customers report that they don’t feel engaged with their supplier. According to BEIS Public Attitude Tracker levels of trust in energy suppliers in March 2020 were similar to those in 2019 when more than half of the UK public ‘don’t trust energy suppliers’.
For an energy supplier to influence a positive change in their customer behavior, the customer has to trust them. That involves regular, positive and proactive interactions that demonstrate that the provider cares about the customer and is invested in providing a quality service. Taking the customer on a user-led journey is a very good way to achieve this.
With a flick of an API, fully personalized online widgets can deliver each customer with full visibility of their energy usage, as well as useful insights into how they are using their energy and how they can reduce their consumption. Giving data back to users via a personalized and friendly online interface will not only restore trust, but also encourage engagement, reduce complaints and improve satisfaction.
Providing customers with a choice as to how they engage with their supplier is also essential. Every customer is different, and therefore their online experience needs to be personalized with options as to how communications and information are received and accessed.
The data is now available
A nudge taps into an individual’s intrinsic motivation. In 2021 50% of UK homes should have been equipped with a smart meter. It’s time for energy suppliers to take a customer’s smart meter data and use it to empower the customer to make changes that will benefit their household, by reducing consumption and bills, as well as the planet, by helping with energy transition. Data insights and information relating to consumption patterns and behaviors must be displayed in a way that’s both meaningful and actionable.
The solution’s ready to roll
For a utility company to replicate the kind of behavioral science based software, services and solutions that we deliver, it would take years. With a plug and play solution from Advizzo, we can save energy suppliers years of planning, testing and development, and months of recruitment and training. Instead, Advizzo’s software and solutions provide energy companies with the opportunity to deploy proven and tested solutions that improve customer satisfaction, whilst reducing risks and cost to serve. You can read more about this in our ‘Build versus Buy’ blog.
You may also want to read our blog “Boosting water and energy companies’ journeys to net zero.”
To find out more or to book a demo, get in touch, and let us help you build your business case for a successful customer engagement project.
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1https://www.ofgem.gov.uk/news-blog/our-blog/role-consumer-achieving-net-zero