The four dimensions of motivating demand response: how to sell to the end-user


Conference: Metering, Billing/CIS America
Location: San Diego, CA, USA
Presenter: Peter C. Honebein and Roy F. Cammarano
Abstract: Presented by Peter C. Honebein and Roy F. Cammarano at Metering, Billing/CIS America

Smart Metering is sweeping the world, with many short and long term benefits being associated with this trend. For most electric utilities, the business case for investing in Smart Meters is solidly based upon increased operational efficiencies and process changes which require improved employee performance. For other utilities, the business case must also include achievement of demand response and energy efficiency goals, which requires improved customer performance.

Economists have long been the oracles of strategy for shaping customer behavior with regard to demand response and energy efficiency. For example, if you significantly increase the price of electricity on a peak day, most customers reduce consumption provided they have been informed and believe that they can take action.

The theory of price elasticity is often met with the reality that price is a sensitive issue for utility customers, and it can easily cause customer backlash and ultimately restrictive legislation. Thus, triggering a significant change in customer performance rarely rests on one strategy. Rather, coordinated, sustained change requires an orchestration of strategies. In our work with a variety of companies, across a wide range of disciplines including utilities, we have found that the four key strategies for enhancing customer performance and changing customer behavior are Vision, Access, Incentive, and Expertise.

  • Vision is showing customers the kind of performance you want from them, and then providing feedback on how well they are achieving the desired performance.
  • Access is providing customers the tools they need to perform.
  • Incentives provide customers an external motivator to perform in a specific way.
  • Expertise reflects the knowledge and skill customers must acquire to be able to perform tasks.