By Adam Ajzensztejn and Roberta Bigliani, IDC Energy Insights
In a new study, “The Role of Gamification in Utilities’ Consumer Engagement,” IDC Energy Insights forecasts that by 2014, worldwide utilities IT spending for gamification tools, applications, and services will be approximately $13.5 million, rising to $65 million in 2016. IDC Energy Insights also expects that by 2016, 60% of progressive worldwide energy retailers will utilize at least one gamified application.
Gamification is a much vaunted strategy to engage and encourage audiences to undertake and adopt actions or behaviors that they may not get round to left to their own devices. It relies on the use of game thinking and game mechanics to leverage people’s natural desire for competition, achievement, status, self-expression, altruism, and closure. Applying these characteristics, which are common in gaming environments, and transferring them to other aspects of people’s lives is predicted to be at the heart of a new business revolution.
Utilities are increasingly recognizing the importance and need for consumer engagement for the long term success of their business. It helps them to attract new and retain existing customers, and addresses behavioral changes to improve energy efficiency and peak response. Engaging their consumers to achieve such goals is seen as a comparatively low cost solution in contrast to expensive alternatives such as brick-and-mortar projects and big advertising campaigns.
Gamification offers one approach to instigate behavioral change and engage consumers, using characteristics which are familiar to large segments of the population, including some demographics often harder to engage through conventional communication programs.
The key drivers for gamification in the energy sector can be summarized as follows:
- The advent and mass installation of smart meters which provide granular, real time data
- Pressure on utilities to make consumers’ smart meter data accessible and available in a secured and standardized format
- Regulatory energy efficiency and demand response targets being placed on utilities
- Competition between utilities, particularly in Europe, to attract and retain customers
- Increasing emphasis on corporate social responsibility and sustainability.
Successful gamification campaigns benefit utilities as they are able to prolong or eliminate investment in their infrastructure, reduce peak loads and thus prevent brownouts and blackouts, improve engagement with their customer base by lowering their energy bills, and by being more visible. Consumers benefit from lower bills, the social aspect that gamification provides, and from a more reliable energy provider.
Early indications for gamifying utilities and other energy players seem positive and provide and interesting avenue for further investigation and research. But with all the hype surrounding gamification, some of which is rightly deserved, it remains to be seen how well these mechanisms work over the long term or the level of appetite and patience that audiences will have when faced with a plethora of gamified applications vying for their attention.
Various approaches to gamification in the energy sector are being piloted or commercially deployed, each adopting differing gamification techniques and having different key objectives. A common factor to each is their use of granular and real time energy data which allows them to provide instantaneous feedback. Thus, mass deployment of smart meters and smart grids is likely to result in increased adoption of gamified applications in new markets.
Gamification has neither a set formula nor rules, but it is common for one or a combination of multiple game mechanics and techniques to be deployed to engage consumers. These include the use of points, badges, levels, leader boards, avatars, gifting, real time feedback, virtual currency, and challenges or quests to keep consumers engaged. An increasing variety of vendors are bringing gamification technologies to the market, which integrate with social platforms and enterprise applications. Utilities will continue to adopt such technologies, serving as a key component of their communication and consumer engagement strategies.
The IDC Energy Insight study notes that the use of gamification mechanics and techniques alone are not enough to secure a successful campaign; many gamified applications fail to live up to expectation as a result of not giving enough consideration to some of the basic and strategic concepts. A successful campaign should be underpinned by a clearly thought out objective, understanding what actions or behaviors are attempting to be motivated. Simply attaching gamified add-ons to an application, without thinking the process through, will lead to an experience consumers struggle to connect with.
Gamification does not usually aim to sway a target audience to do something they do not wish to do in the first instance — its intention is to provide a gentle nudge to what may be mundane or low priority, and light up the path and make the experience more engaging and fun.
With potential rewards for consumers and energy players alike, the gamification of the energy sector has begun – let the games commence.
Adam Ajzensztejn is senior research analyst, IDC Energy Insights, EMEA.
Roberta Bigliani is associate vice president and head of EMEA, IDC Energy Insights.