A new study by IBM’s Institute for Busines Value has highlighted the extent to which changing consumers behaviour is challenging organisations and the fact that they need to adapt their engagement strategies if they are to stay ahead of the pack.
The 2011 IBM Global Utility Consumer Survey explored the key influences, perceptions, knowledge and expectations of about 10 000 energy consumers in 15 countries. One of the most revealing insights was that many consumers do not understand the basic unit of electricity pricing and other energy concepts used by energy providers. Given the drive towards green energy and the need to reduce reliance on conventional power, this basic lack of knowledge is seen as a hindrance to creating an energy-conscious consumer.
More importantly, the study identified a list of important behavioural patterns that could have an impact on how providers communicate with and motivate consumers. The study was conducted in Australia, countries in Europe, the United Kingdom, Brazil, Canada, Chile, Japan, New Zealand and the United States, and therefore reflects more sophisticated utility services and a more sophisticated choice of providers than is the norm in Africa.
Although studying consumer behaviour towards and perceptions of utilities may seem incongruous with a leading IT services and solutions organisation, IBM uses these insights to provide better advisory and support services to customers in this sector. It is also central to the company’s “smarter planet” philosophy, which aims to create an environment and society that work smarter, better and with long-term sustainability as the ultimate goal.
“Understanding consumer behavior and perception is critical if we are to advise our customers correctly, which is why the IBM Institute for Business Value undertakes studies such as this,” said Lesley-Anne Wilkinson, the institute’s Middle East and Africa regional lead.
“The most insightful outcome from this particular study was that consumers don’t feel empowered to understand the core issues related to green energy, or how they could contribute to a more energy-efficient planet. Not having a basic understanding of what their bill reflects or how they can reduce their energy consumption will delay the behavioural change that is needed.”
Some of the key insights into consumer understanding are that a little more than 30% of the consumers interviewed were unaware of the basic unit of charge for energy consumption, almost half do not understand the concept of time-of-use pricing, 60% do not know the meaning of the terms “smart grid” or “smart meters” and 80% are unaware of “consumer energy portals”.
Also, more than half of the respondents do not know whether their energy provider has a green-energy programme and almost a quarter of those who participate in green-energy programmes have no idea whether they pay a premium for that power, or how much more they pay. Given the need by utilities to reduce their environmental impact, to which efficiency-minded consumers can contribute by adapting their behavioural patterns, this is of grave concern.
Even more so, however, is the feedback from respondents that they garner their information and develop perceptions based on traditional media reports, internet-based sources such as the social media and the opinions of friends and family rather than from direct communication from their utility provider. “The level of apathy associated with an uninformed audience is best demonstrated by the level of engagement and interest shown by the most knowledgeable respondents,” said Wilkinson.
“Forty-two percent of this audience said they were more likely to have a positive opinion of local green-energy programmes, while a staggering 64% were more likely to change energy-usage patterns to meet specific goals,” said Wilkinson. “What is interesting for us is the tremendous role that new media plays in shaping perceptions and behaviour and, in this study, it is clear that utilities can no longer rely on traditional communication channels to bring about the change required for us to evolve into a smarter planet.”
Therefore, the need to change engagement and education models was paramount for utilities if they are to win the battle against diminishing resources and increased demand. Wilkinson said this insight could be applied to all spheres of industry and business, which were adjusting to a new world order in which an organisation’s voice and reputation were no longer managed only along a one-way communication channel.
“It’s all about conversation now and, unless organisations learn how to engage in and possibly steer those conversations, they are at a distinct disadvantage. The key is that this interaction can also be used to inform organisations about consumer behaviour and perceptions and thereby help them adapt education and awareness campaigns to get the desired results,” she said. For example, the IBM study showed distinct differences in energy-related concerns and priorities in different age groups.
The younger demographic was more concerned about the environment and natural resources, whereas the older group was more concerned about the impact on the national economy. This kind of insight, albeit gathered from a survey and not through social media, provides invaluable information for utilities on how they should be interacting with these disparate groups.
Similarly, companies with greater insight into and engagement with their audience are more likely to manage perception and behaviour. “We are now going to take the results from the study and look to see how those insights can be applied by our customers, irrespective of their industry,” said Wilkinson.
“We have to acknowledge that the world has changed and that people want and need to be engaged differently. This is far more of an opportunity than a threat, as genuine conversations with consumers deliver far greater results and returns when used to align strategies or campaigns. This is a lesson power utilities are going to have to learn.”
This article originally appeared in the Mail & Guardian newspaper as an advertorial