As utilities look to their future, they should consider not only a new decentralised power system architecture and changing business models but also their future customers.
And this group is increasingly consisting of the ‘next generation’ of energy customers – the millennials, or Generation Y, who were born during the 1980s and 1990s. Indeed, in the United States in 2016 millennials overtook baby boomers – those born in the late 1940s and 1950s – as the largest generation in terms of population.
As such, understanding of this group will be crucial for customer engagement strategies.
Millennials as energy consumers
Last year market research by Accenture of almost 10,000 millennials in 17 countries identified three broad ‘wants’ from them - renewables and other new energy products and services, home energy management data and deeper engagement with their energy providers.
A new study from the Smart Energy Consumer Collaborative (SECC, formerly Smart Grid Consumer Collaborative) in the US sheds further light on the millennials’ attitudes to energy and how they engage with their utility providers. While on a smaller scale, involving input from 1,300 respondents and restricted to the US, it is nevertheless indicative of what can be expected in other regions.
So who are the millennials, which the SECC defines as those born between 1982 and 1999?
The study finds that they are most likely to be tech-savvy and regard smart technologies as a part of their lifestyle or look to smart energy programmes to save themselves money (named by the SECC respectively as ‘green champions’ and ‘savings seekers’).
Indeed, when asked about energy efficiency, millennials express interest in anything that may help them save money or contribute positively to the environment, from solar to electric vehicles and time-varying rates. They also are more willing to pay for programmes and services than non-millennials.
Millennials also are generally satisfied with their energy provider. They trust their recommendations when it comes to energy efficiency and energy technologies. For example, about 50% are likely to invest in energy saving technologies and programmes if their utility endorses them.
And they engage often and through any means available to them. Their preference is for digital communication – almost 60% have used this channel within the last six months – but they will also leverage telephone and in-person contact, deciding on the moment which channel is easiest and most convenient.
Nevertheless, despite this level of satisfaction, over one-third would consider purchasing electricity from an alternative supplier and would be likely to switch if the opportunity is available.
Utility opportunities - new revenue streams
What then for utility providers are the implications of these findings, which show that millennials are engaged and hungry for information on energy and sustainability, and adept at change?
In short, according to the SECC, they are the attributes that the provider should have and that providers should now be seizing the opportunities with engagement products and information. With millennials’ willingness to support sustainability initiatives, these also could add an additional revenue stream.
The comfort with and use of new technologies needs to be taken into account in providing meaningful offerings and services to these younger consumers.
While it may be difficult for the electricity provider to manage multiple channels, particularly when platforms and contact systems are not well-integrated, a record of every contact is invaluable to the next interaction, especially since these consumers will leverage any and all channels available to them.
As Engerati has previously argued, the cloud utilising software as a service will be crucial to underpinning such engagement efforts.