Everyone Knows You Except for Your Electric Utility

Netflix, you were right. I liked Downton Abbey. And thanks, Amazon I do want to read Michael Lewis’ new book. I still can’t figure out how Google knows I have a new dog.

Even if at times it feels a bit eerie, such ‘consumer-of-one’ marketing is a convenience many of us have come to appreciate. And it’s an approach now embraced by most major retailers.

The exception? You’ve guessed it: the ever-old fashioned electric utility.

But that’s changing. And Colorado-based technology company Tendril is intent on nudging the electric industry into the new era of micro-targeted marketing. It’s a move that won’t just sell us more stuff, but could seriously improve energy efficiency and lower costs.

Tendril this week launched a new energy services management (ESM) platform to help your utility figure out what you might want from it.

Figuring you out

Tendril collects vast amounts of publicly available information about people served by a utility energy consumers: house size, income level, and a lot of other data available from services like Experian. The company also looks at individual energy usage patterns provided by the utility. It then runs the information through a simulation model to get to know you: your demographic, buying behavior and inclinations, and types of messages you respond to online and off.

So, say, an energy company wants to sell solar panels in Lincoln, Nebraska. Tendril’s algorithm  figures out likely purchasers. Those with pools and big houses, for example. It will configure its platform to isolate homes of over 3,000 square feet, made of brick, with a pool and central air conditioning, and with more than three inhabitants.

utility

Simulated daily net energy consumption for a 4,500 square-foot brick home in Lincoln, NE,
assuming central air conditioning, a pool, and a 4.5 kW solar-electric system

Such targeted research offers added value; it could reduce solar costs. Acquiring residential solar customers is expensive. It costs about $3,000 to $5,000 per customer, according to Tendril. Buck-shot marketing is expensive, but marketing only to those likely to buy drives down this cost.

Another example: a utility wants to institute a program to get homeowners to save energy. In many cases, such programs only achieve a one to three percent savings, according to Tendril. More people might participate if Tendril uses its database and algorithm to find the most likely participants, and the utility hones its marketing message to them.

The utility will know how to talk to you, for example, if you’re green-leaning and have an old house with old windows.

The program allows the utility to look for a very specific type of households. Maybe one in the electricity-pricey Northeast who earns less than $30,000 per year and spends 40 percent of its energy bill on HVAC when the temperature is above 80 degrees.

Ho-hum, unless you’re a utility

For Google, or Amazon, or Netflix, this might be a big so-what. But for the utility industry its relatively new ground. Utilities have captive customers (who in the US would ever forego electricity?), so haven’t spent a lot of time thinking about micro-marketing before. It’s a new move thrust upon utilities as competition looms. Companies that offer solar, microgrids, combined heat and power, and others are threatening to lure away the utility customer.

Thus, Tendril sees large opportunity ahead as utilities, retail electric suppliers and others increasingly embrace energy services management. ESM will spur $54.3 billion in consumer spending on energy products and services by 2030, according to a paper by Manifest Mind that Tendril distributed.

Of course, some people are uneasy about this kind of marketing. They fear utility spying or misuse of their personal information. But as Tendril points out, the ATM and debit card caused similar concerns and now their use is  commonplace.

So welcome, utility, let me know what I want!  I suspect it’s a Nest thermostat. Am I right?

Want to read more articles like this? Visit EnergyEfficiencyMarkets.com. Thanks!

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Tags: EMS, Tendril, consumer-of-one, efficiency, energy, home, management, servicesVis

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Comment by Dennis Heidner on May 15, 2014 at 3:54pm

O Power has been doing a similar thing now for perhaps five years.  The utilities sign up for the OPower service, they use their (OPower) software to look at the location, climate data,  energy use, then offer suggestions for energy efficiency improvements, track your progress,  help provide suggestions to the utility for rebate / efficiency programs that would help the utility meet conservation targets.

The customers are given opportunities to opt out, and they can actually provide additional information to the utility/OPower database, e.g.  they can record the improvements already made, correct size of house and number of occupants - such that the recommendations are more targeted and specific.

Comment by Matthew Levene on May 12, 2014 at 7:11am

This was great. Thanks Elisa. Hopefully this data will be used not only to sell more goods and services to ratepayers, but also to optimize the grid and comfort in the home :)

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