Recognizing that kWh are a commodity in the minds of most customers, many utilities have sought to extend and diversify their value proposition beyond electron supply as a means to deepen customer engagement and open new revenue channels. Using online marketplaces, utilities promote product and service offerings such as EV chargers, smart thermostats, PV panels, heat pumps, energy storage, HVAC maintenance and more.
This diversified business model offers compelling benefits, including:
- Improved brand perception as energy retailers evolve from a commodity provider to a trusted partner for the home
- Increased profit per customer
- Improved customer satisfaction and engagement
- Demonstrated progress toward electrification and decarbonization targets
Marketplaces promise valuable revenue sources for utilities, with the potential to increase global utility revenue from $118 million to $468 million in the next 10 years, according to research firm Guidehouse Insights. But despite the convincing business case and revenue potential, many utilities pursuing a marketplace strategy have not yet realized the revenue or engagement they anticipated.
As Bidgely CMO Gautam Aggarwal discusses in the Forbes’ article “Energy Marketplaces Can Drive Smart Home Appliance Shopping,” the answer lies outside the energy industry. Arguably, no segment has as successfully cracked the code of customer engagement better than leading consumer brands like Netflix and Amazon. These tech giants have forever changed customer expectations by using AI to harness the power of customer behavior — i.e. purchasing and viewing habits — in order to personalize and tailor recommendations and improve a customer’s ongoing experience with their platform. This strategy has proven to deepen customer satisfaction, foster brand loyalty and increase revenue. At the same time, their model has been so successful that it has simultaneously created an enduring customer expectation of one-to-one insights and personalized service from all ecommerce experiences.
Traditional utility ecommerce sites have also struggled to compete with the brand recognition and loyalty of Amazon and the Home Depot, especially when utilities have offered a more limited catalog of products than established home improvement e commerce outlets.
It’s time for a utility marketplace reinvention.
With Bidgely’s UtilityAI™ Smart Shop™, utilities are able to bridge the gap between the ineffective marketplace structures of yesterday and the proven AI-insight-driven smart marketplaces that are setting a new standard today.
Legacy utility marketplaces have most often taken the form of a stand alone web page or microsite operating as a not-well-integrated “add on” to a utility’s core website. Because these marketplaces are typically created as part of a utility’s demand side management program and funded by energy efficiency dollars, they often are conceived to fulfill that mandate exclusively, rather than as an important additional element in the overall customer experience. They are therefore disjointed and do not tailor the shopping experience or offer personalized recommendations for products and services, but instead present the same products or “measure” options within the DSM portfolio to all customers.
Other limitations of first generation utility marketplaces include:
- Disjointed and Impersonal – Product recommendations are not hyper-targeted to each customer’s unique energy usage and appliance health.
- Insufficient Inventory – They include a very limited number of products and services.
- Arbitrary – Product offers and rebates are presented to customers without context or actionable insights to make the relevant.
- Rigid – They do not enable “get the best deal” comparison shopping or “freedom of purchasing channel” options.
Building on our UtilityAI foundation and the world’s most accurate and actionable customer energy profiles, Bidgely saw an opportunity to create an entirely new approach to utility marketplaces that is akin to what the most successful consumer brands do on their respective platforms. The UtilityAI Smart Shop delivers a personalized marketplace for every energy customer that functions as an integrated element in the overall utility-and-customer journey.
While utilities have made strides to increase customer satisfaction through personalization, marketplaces have not benefited from these advances, and more effective marketing is still needed to drive marketplace engagement. The UtilityAI Smart Shop surfaces personalized product offerings and promotions for each individual customer across 20 different product categories based on that particular household’s unique energy use habits and preferences. We enable utilities to make targeted, highly relevant recommendations exclusively to those customers who will benefit most.
Smart Shop recommendations stem from the UtilityAI NBI (Next Best Interaction) Engine, which combines utility-supplied customer energy consumption data with contextual weather, home location, rental/ownership status and historic utility program interaction data to generate next best interactions in a dynamic fashion for each customer. The universe of NBIs developed for each customer include personalized suggestions that drive customers to the utility marketplace. For example, an NBI alert might inform a customer that he or she could save ~$50 dollars per year by replacing 15 inefficient light bulbs with LEDs. By clicking on “learn more,” the customer is then redirected to a buying guide that presents more information about LEDs to inform any purchase decision. The goal is to empower the customer with more product knowledge, nurture the buying decision and then enable the purchase simply and easily via a number of different channels from which the customer can choose his or her favorite. With Smart Shop, utilities guide each customer through his or her own unique purchasing journey.
From a customer experience standpoint, this approach facilitates a greater and more granular understanding about how they use appliances and consume energy in their home and what they can do to optimize their energy usage. Purchasing decisions made through this process therefore bolster customer satisfaction.
The success of product and promotional offers is also improved as they can be delivered to customers via a variety of different channels and utility touchpoints, including text and email alerts, the utility website or conversations with energy advisers or CSRs in the call center. In this way, product and service offerings are presented in context as part of holistic solutions — such as helping a customer improve their energy efficiency, reduce their energy spend or achieve unique personal goals like transitioning to renewable energy or purchasing an electric vehicle.
For example, a customer may call in with concerns about a high bill. Using the UtilityAI platform, the CSR can pinpoint that the high bill is the product of a high AC load resulting from a low temperature setpoint. The CSR is then in a position to make a helpful, customized recommendation that if the customer were to purchase a smart thermostat they could save $X, and provide them with an easy link to make the purchase.
Only utilities can deliver this depth of energy product personalization. Without the benefit of AMI data, mainstream consumer platforms can’t compete, enabling utilities to carve out a dominant position in connection with smart home and energy-efficient appliance shopping.
Smart Shop also optimizes the rebate experience, making it possible for customers to receive rebates in almost real time, immediately after they make a purchase through any ecommerce platform of their choice. Beyond rebates, Smart Shop also layers on additional discounts that Bidgely has negotiated directly with manufacturers or with a utility’s preferred partner vendors, providing an additional incentive to motivate customers to cross the chasm and make a purchase.
An additional advantage to UtilityAI’s integrated, personalized customer journey approach is that it eliminates the need for costly paid digital advertising via Facebook and Google Ads to generate marketplace traffic and engagement. Traditional targeted digital marketing is replaced by direct-to-consumer micro-targeted marketing that is both lower cost and more effective, generating a far greater marketing ROI.
The UtilityAI Smart Shop also yields benefits for other programs utility-wide. Programs seeking to advance EV adoption or other electrification measures, for example, can be integrated into the broad Smart Shop framework where they are more likely to generate desired revenue. Utility programs are promoted on an individual basis, so if a user is only eligible for programs X and Y but not Z, they only receive promotions for X and Y.
At Bidgely, we believe that utilities can evolve to become their customers’ trusted partner, not only for their energy supply but also for energy-related products and services. The UtilityAI Smart Shop was designed from the ground up to provide an integrated, personalized smart marketplace for every energy customer that recommends the right product to the right customer at the precise time when they really need it. By reinventing the marketplace model, utilities can finally realize the full revenue and engagement potential long promised by diversification.