Jana Jones had a problem.
After taking charge of the online residential energy efficiency program at Commonwealth Edison in 2013, she realized that the utility didn’t truly understand its customers.
Like every power company, ComEd had general data on demographics, household energy consumption, demand spikes and billing history. But it didn’t know much about the people behind the meter -- their lifestyles, their feelings about the utility, or their willingness to save energy.
When Jones asked for insights from her team, they had only limited answers: “They said, ‘We only think about the billing and the meter.’”
A few years prior, ComEd had partnered with Opower to mail home energy reports comparing customers’ energy use to their neighbors. The mailers helped incrementally cut consumption, and the utility decided to scale the program up from a few hundred thousand customers to 1.5 million customers.
But the basics weren’t enough. As ComEd expanded its basic behavioral efficiency program to more customers, savings levels started to dip as they brought in lower-energy users. The utility couldn’t rely on cherry-picking high users if it wanted to deepen savings and meet efficiency goals.
“We needed to get smarter about defining customer classes,” said Jones in an interview. “We could just throw some paper out there and get some savings. But we wanted to do more. We landed on a lot of the targeting.”
ComEd went back to Opower and asked for more. The utility has since become an early adopter of some of Opower’s new products, including deeper segmentation based on psychographic information and a behavioral demand-response pilot modeled after a successful program at Baltimore Gas & Electric, a utility owned by ComEd’s parent company, Exelon.
ComEd also turned to C3 Energy, a top rival of Opower, to test another customer segmentation tool and energy savings reward program. Combined, the efficiency programs have reached nearly half of ComEd’s 3.8 million customers -- up from 50,000 in 2009.
They gave the program a name: the premier customer experience.
“The idea was to create a better experience. We might not be able to squeeze a lot [of energy savings] out of them, but it creates more value,” said Jones.
ComEd's efficiency efforts are becoming as much about improving customer satisfaction as saving kilowatt-hours. Improved segmentation now allows the company to reach out with more personalized messages during important moments -- creating high-bill alerts with actions to reduce consumption, presenting savings opportunities when a family moves into a new home, or offering customization options whenever someone signs up for e-billing. It's about making ComEd an active energy advisor, not a passive, anonymous wires company, said Jones.
Jones is not alone. Utilities across the country worried about flat demand and competition from third-party distributed energy providers are also thinking more broadly about how to improve their customer relationships. And Opower is betting that more of them will follow ComEd's lead and seek out customer care solutions beyond standard behavioral efficiency offerings.
An evolution from behavioral efficiency to customer care
Jana Jones was one of many utility employees attending Opower's user conference in Miami last week. The three-day event, called Power Up, brought together a couple hundred efficiency program managers and utility executives to hear about the software provider's product roadmap and discuss their own experiences with efficiency programs.
Opower has always seen itself as a utility ally, not a disrupter. Company executives used last week's event to further push that narrative, telling existing and prospective customers alike that they want to help them transition to a customer-focused business model.
One representative from PSEG called the user conference a "support group" for utilities looking to improve efficiency and get closer to their customers.
Flanking either sides of a stage in their opening presentation, Opower co-founders Alex Laskey and Dan Yates paced the room, excitedly laying out their new software products and updates. One word kept coming up: “we.”
“We have the opportunity to make our businesses better,” said Laskey, letting the utility crowd know that Opower was firmly on its side.
The company's new products reflect that philosophy. Opower's sixth-generation software, officially released last Wednesday, features a bundle of new offerings designed to improve call center operations and customize the billing process. Although efficiency will likely be the largest source of Opower's revenue for some time, the company believes that customer care is an area of vast untapped potential.
"We're moving into an area of the utility that wasn't previously a primary objective," said Neel Gulhar, Opower's director of strategy and product marketing, in an interview.
Among the many updates to Opower's sixth-generation software, two stand out: the billing suite and the improved segmentation tool.
Opower's goal is to take over the entire billing process -- the rare time when customers are interacting with their power company.
"Why the bill? Because eight years later, it is still the biggest missed opportunity," said Laskey.
Over the last year, Opower has quietly begun to use its analytics engine to build operational software to run utility call centers and billing operations. The company says that 30 percent of calls to utilities are related to high bills or confusion around payment. By providing customized insights about customers to call center staff in a scripted format, Opower claims it has been able to cut call center time by 19 percent in early pilots. The company also hopes that it will help call-center employees promote additional efficiency programs.
On the billing side, Opower is working to individualize the roughly three dozen notifications that utilities send their customers each year, both through paper and e-bills. It calls these touch points "moments that matter" as power providers work to become energy advisors to their customers. These moments include high-bill notifications, equipment upgrade suggestions, a welcome message to new homeowners, and outage warnings.
Opower itself doesn't have much real-world experience with the full billing suite yet. As of now, Puget Sound Energy is the company's only customer. But there are some positive signs.
When National Grid implemented a new mover notification that offered information on pricing and recommendations for saving energy, the utility saw a 30 percent increase in customer satisfaction after surveying its customers. And ComEd has also adopted some of these new communication tactics as part of its premier customer experience program.
Opower believes the potential is strong. In general, utilities have reported positive results when testing out new notifications. According to a recent survey from J.D. Power, customers who receive communications from their utility report satisfaction rates 74 percentage points higher than those who don't.
Can improved customer care help utilities sell more products?
The customer care strategy is not unique to Opower. C3 Energy and Tendril, Opower's two most common competitors when bidding for utility business, are working on similar tools. C3 has long touted its efforts to improve call-center operations and billing, while Tendril has been working to improve its personalized notifications and create a marketplace for utilities to broker energy services.
These companies are all trying to increase business efficiencies and strengthen customer ties. But they're after another important goal: helping utilities sell more.
Last summer, Opower CEO Dan Yates described this strategy after suggesting that the company may want to help run the billing piece of communitysolarprograms. "[Distributed generation] is rippling across the country, and we don't think it's fair to cut utilities out from saving themselves against the competition," he said.
Other services could include information on electric-vehicle models and chargers, explaining options for installing solar, building a utility-run marketplace to sell appliances and contracting services, or even cross-promoting other demand-side management programs.
Utility executives at Opower's conference said they were looking for ways to increase those options.
"I want to be the person they come to for all those choices," said Jim Madej, senior vice president of customer energy solutions at National Grid. "At the end of the day, we should be the one place people go to to get that portfolio of products."
Jason Teller, Puget Sound Energy's vice president of customer solutions, concurred: "We should be the core provider within the whole stack [of products and services]. I should be able to sell something to every single one of them, increase their value, and increase my bottom line -- and not be ashamed of that," said Teller.
Utilities aren't the only ones facing that problem. With sales cycles as long as 24 months, Opower is looking to boost revenue from its existing 95 customers and prove to investors that it's capable of a lot more than mailing out home energy reports. Picking up a new customer is a lot more costly than selling new products to an existing one.
And as ComEd's experience proved, energy savings get harder to come by as programs expand beyond higher-than-average energy users. Opower must find new ways to reach more difficult customers. Behavioral demand response, which has been very successful in BGE's territory for the last two summers, is one potential way to expand savings.
George Malek, the energy efficiency director at ComEd, said he thinks the customer-care side of the software business may offer more long-term potential. ComEd recently expanded Opower's standard home energy reporting, but the utility is now becoming more interested in using analytics to make customers happier -- along with helping to cut their energy use.
"The future here isn't just in energy savings. It's also other products," said Malek. "This has become a catalyst for customer engagement."