Residential Demand Response-How to Engage Customers in 5 Steps

Utilities are beginning to understand that customer engagement can make or break a demand response program.
Published: Fri 04 Apr 2014

In order for residential demand response programs to be successful, customers need to be properly engaged and willing to participate. Without this engagement, demand response programs will fall flat.

Today, utilities have a number of options to choose from when it comes to winning customers over. The integrated suite of software, hardware and services has helped utilities across the US to attain high levels of customer participation. Consider these high participation figures:


· 48% of eligible households in the Pepco Holdings (PHI) residential markets of Washington, D.C. and its northern Maryland suburbs are participating in their Energy Wise Rewards demand response program.

· 52% of eligible households are participating in the Southern Maryland Electric Cooperative (SMECO) Cool Sentry program.

These high participation percentages show that consumers are willing and eager to become more engaged with their energy consumption. The figures also point to the fact that demand response can be a very valuable resource for the utility.

Five ways to gain high customer engagement

In order to achieve a high success rate when it comes to consumer participation, Mr Blake Young, President and Chief Executive Officer of Comverge, points to the following:

  1. Analysis-It is critical that utilities gain an understanding of the target demographics. Segmenting is important when identifying customers that are most likely to participate in a residential demand response program. A good strategy will build off of those first participants who will communicate a positive word-of-mouth, thereby creating a virtuous cycle. Subsequent tactical messaging will then be necessary to reach additional segments within the region. In the end, all core messaging must resonate with the broad range of customers that utilities need to engage. In our article, Utilities: Focus More on Consumer Practices, Dr Anca-Diana Barbu, Project Manager for Energy and Environment, European Environment Agency, discusses how focus must be broadened and that utilities need to take the time to understand their customers’ needs and interests. Utilities need to find various ways of communicating with different segments of the targeted group.

  1. Channels-Today, utilities have access to a wide range of communication channels to keep residential participants informed. While direct mail was effective in the past, maintaining a strong Web presence and a well-informed call centre is critical. A compelling program will utilize channels that continue to grow in popularity-these include text messaging, email, phone applications, social media, and Web portals. Different segments will be more inclined to use one over the other. This is where a proper analysis will go a long way since each market is different. Utilities will also need to determine when to implement each channel as part of a comprehensive communication strategy. How, when, and by what means are all important questions to ask before initiating any strategic plan for program recruitment.

  1. Education-Establish appropriate expectations with customers by educating them. Often, customer dissatisfaction comes about when expectations do not match reality. Develop easily accessible information online along with simple, clearly written materials that can be delivered directly to the customer. Educate customers before attempting to engage them in a demand response program. Be transparent about all elements of the program for the full length of the customer participation and beyond. It is essential to empower your customer. [Utility Must Teach the Consumer to Engage]

  1. Choice: Provide a variety of technology options and cycling strategies. Customer choice is very important as one size does not fit all. As customers gain experience and familiarity with the program over time, they can be given the opportunity to increase their participation in the program.

  1. Partnerships: It is essential for utilities to engage with all interested parties, such as state and regional regulators. To facilitate engagement, communication is essential between all stakeholders, and utilities should provide regular program updates and include parties in collaborative sessions that are relative to the enhancement of the energy management program. Developing positive relationships with partners from the beginning with make it easier to gain the necessary approvals as the program progresses.

To attain success from its demand response programs, the utility cannot rely on technology alone-it needs the full participation of its customers in order to maximize the value of its demand response programs. By following the five steps above, a win-win situation can be realized by all stakeholders.

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