Communication umbrella - TNO · differentiating between consumers segments) is being analysed and...

Communication umbrella

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Communication umbrella for residential consumers

D5.4

Programme FP7- Cooperation/Energy Grant Agreement Number 308923 Project acronym Advanced Type (distribution level) Public Date of delivery 30-11-2014 Number of Deliverable D5.4 Status and version Final v1.0 Number of pages 106 WP/Task related WP5-T5.4 WP/Task responsible Thomas Mikkelsen (VaasaEtt) Author(s) Thomas Mikkelsen/ Caroline Vanderweerdt Company(ies) Contributing VaasaEtt, TNO, Enel Distr, TNS, ERDF, RWE, Iberdrola


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1. Executive Summary

The concept of AD or Active Demand is not new to the utility business. On the

contrary one could say that it has been there since the oil crisis in the 1970s and

has been under constant development for at least ten years – and in those years

and during that period has seen a lot of different definitions. Maybe that is part of

the reason why it is still not clear to either utilities or costumers how to

communicate or take part in it. Deliverable 5.4 of ADVANCED, focuses on the

residential customer communication in the utility sector and by doing so,

investigates customer perception alongside with the utilities’ perception of their

customers in trying to identify the best ways to create an environment and a

communications strategy where AD can become a valuable asset for the

industry.

The first chapter takes a look at how communication has been treated and used

in the utility industry since the liberalization process began around or just before

the year 2000. The conclusion is, that there is a close resemblance between the

politics influencing the industry and the way communication appears and is being

used and that communication trends are similar in between different European

countries. The next chapter takes a look at the development in communication in

general and in communication channels, which has undergone a dramatic

change from being focused at primarily one way and mass communication to a

much more complex and digitally oriented communication, which involves the

end-customer and focuses on understanding the mechanisms of interaction

between the end-customer and the retailer and how to establish an actual

relationship. The utility industry has so far not been focusing their communication

efforts within these new areas and has very little experience in doing so.

From these analysis and introductory paragraphs the fourth chapter introduces

and explains a communication model, called the AD Communications Wheel

which has been developed specifically for this deliverable and which main focus

is to introduce a concrete way of driving customers through the phases of the

Conceptual Model, explained in D5.1 (Report describing the validated conceptual

models of active consumer participation in AD.


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In chapter 5 the work from D4.2 (Report describing the AD perception in Europe

differentiating between consumers segments) is being analysed and used to

develop a segmentation model, showing the differences in customer perception

and preparedness to participate in AD programmes. The segmentation model

and findings from D4.2 is at the same time the starting point for Chapters 6 and

7, which brings forward a concrete communication strategy and methodology for

establishing trust, understanding and lasting relationships between the parties of

an Active Demand programme - according to the analysis of D4.2 the three key

factors in determining whether an AD programme becomes a success or not. The

learnings and content of the communication from the four pilot projects of the

participating utilities are used to derive messages and explain what works and

what does not, when it comes to customer communication about AD.

The deliverable sums up by showing a couple of examples of how the

methodology can be applied to real life situations and actual customers and

concludes that in order to succeed, changes are needed not only among

customers, who needs education – but also internally in the utilities and in the

industry, as new ways of interacting with the end-customers is a necessary

means to gain new grounds in Active Demand.


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2. Table of contents

1. Executive Summary ..................................................................................... 3

2. Table of contents .......................................................................................... 5

3. Communications in the Utility Industry ...................................................... 7

3.1. A (short) history of Utility Communication in post-liberalization times ................... 8 3.1.1. Liberalization process .................................................................................................. 9 3.1.2. An early start ............................................................................................................. 10 3.1.3. Brand building ............................................................................................................ 11 3.1.4. Educating and caring utilities ..................................................................................... 12 3.1.5. Crisis Communication ................................................................................................ 13

3.2. Building relations ......................................................................................................... 14 3.2.1. A steep learning curve ............................................................................................... 14 3.2.2. A starting point for customer communication ............................................................ 15

3.3. Advantages and challenges ........................................................................................ 18

4. On communication channels .................................................................... 20

4.1. The development in communications ........................................................................ 20 4.2. Digital communication ................................................................................................. 21 4.3. Change in the media landscape .................................................................................. 23

5. Methodology ............................................................................................... 25

5.1. The AD Communications Wheel ................................................................................. 25 5.2. The Steps of the AD Communications wheel ............................................................ 27

5.2.1. Targets and Goals ..................................................................................................... 27 5.2.2. Stakeholder Analysis ................................................................................................. 31 5.2.3. Identifying customers ................................................................................................. 34 5.2.4. Data collection and analysis ...................................................................................... 35 5.2.5. Communications ........................................................................................................ 35 5.2.6. Measuring effects ...................................................................................................... 36 5.2.7. Organizational set-up ................................................................................................ 37

6. Identifying the Actors ................................................................................ 39 6.1. Knowing your customer .............................................................................................. 39 6.2. Knowing your targets ................................................................................................... 39 6.3. Knowing your responsibilities .................................................................................... 40 6.4. Customer segmentation .............................................................................................. 40 6.5. Defining customers – an example .............................................................................. 41 6.6. Defining targets and means of communication ........................................................ 41 6.7. Segmentation for Active Demand ............................................................................... 42

6.7.1. AD segmentation model ............................................................................................ 42 6.8. Personas in Active Demand ........................................................................................ 43

6.8.1. Active segment .......................................................................................................... 44 6.8.2. Moderate segment ..................................................................................................... 46 6.8.3. Indifferent segment .................................................................................................... 47 6.8.4. Oppositional segment ................................................................................................ 48

7. Building an Engagement Engine .............................................................. 50 7.1. Knowing your targets ................................................................................................... 51

7.1.1. Benefits from communicating AD services ................................................................ 52 7.2. Knowing your responsibilities .................................................................................... 54

7.2.1. Electronic consents ................................................................................................... 54


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7.3. Internal involvement and understanding ................................................................... 55 7.3.1. Competences and staff.............................................................................................. 55

7.4. A project oriented mind-set ......................................................................................... 55 7.5. Getting started .............................................................................................................. 57

Strategy, conceptualisation and ambitions ........................................................................... 57 Building, integrating and implementing ................................................................................. 57 Delivering, developing and revisiting ..................................................................................... 57

7.6. Strategy, development and implementation .............................................................. 59 7.6.1. First step – goals and KPI’s ....................................................................................... 59 7.6.2. Second step – data and analysis .............................................................................. 60 7.6.3. Third step – Engagement plan .................................................................................. 62 7.6.4. Fourth step – concept and design ............................................................................. 64 7.6.5. Fifth Step - implementation ....................................................................................... 65 7.6.6. Launch ....................................................................................................................... 66 7.6.7. After the launch ......................................................................................................... 67

8. Identifying Customer Journeys ................................................................. 68 8.1. The development process ........................................................................................... 68 8.2. Building a digital marketing platform ......................................................................... 69 8.3. What makes it work ...................................................................................................... 69 8.4. From data to insights ................................................................................................... 70 8.5. Triggering the next step ............................................................................................... 71 8.6. Adequate information – don’t tell me, show me........................................................ 71 8.7. Customer dialogue = customer relations................................................................... 72 8.8. Introducing customer journeys................................................................................... 73

8.8.1. Drive .......................................................................................................................... 73 8.8.2. Act .............................................................................................................................. 74 8.8.3. Grow & Share ............................................................................................................ 74

8.9. Learning from the Pilot projects ................................................................................. 74 8.10. Customer journeys by Persona .................................................................................. 79

8.10.1. Getting started ........................................................................................................... 81 8.10.2. After the first sign up .................................................................................................. 82

8.11. Journeys, personas and relations to the pilots ......................................................... 82

9. Examples of applied communication ....................................................... 90

9.1.1. Making Daniel an AD advocate ................................................................................. 90 9.1.2. Making Maria aware and interested .......................................................................... 92 9.1.3. Reaching out to Susanna .......................................................................................... 93

9.2. Regional variation ........................................................................................................ 94 9.2.1. Regional variation in figures ...................................................................................... 94 9.2.2. Working with regional variation ................................................................................. 98

10. Revisions .................................................................................................. 100

10.1. Revision history .......................................................................................................... 100

11. Conclusions .............................................................................................. 101

12. External documents ................................................................................. 103

13. Appendix A: Figures and illustrations in full format ............................. 105


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3. Communications in the Utility Industry

As an introduction to developing a Communications Umbrella for applying a

successful AD programme this chapter will take a look at the communication

activities and strategies in the past 15 years within the utility industry. This will

serve as a back ground for the changes suggested in regards to communication

and organization later on in the deliverable and to introduce some overall

concepts of communication, which will be used throughout the documents.

Retailers in the utility industry have experienced a challenging market position

ever since the liberalisation process started in the industry in the late 1990’s. The

industry has developed a market with increasing marketing costs and in most

markets also low returns. At the same time, the past ten years have seen rising

energy prices and high investments in for example smart metering, grounded

cables and in some countries even fibre optic cables, known as FTTH.

Figure 1, Electricity prices 2005-2012, Eurostat and European Commission.

Note that prices are relative to the year 2005, so that differences in taxes and

VAT between regions does not influence the picture.


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May be as a result of the increase in prices and most certainly because of the

attention to the industry created by the increase in marketing and sales efforts

also the consumer organisations around Europe have experienced a growing

watchdog effectiveness and in many European countries the trust in utilities is

very low indeed [Ernst & Young, 2013].

As a result most utilities seek to form communication strategies to encompass the

growing scepticism of consumers, to promote a green agenda, to build actual

relationships with their customers and last but not least, to develop new products

and services which will help expanding their business in an industry facing

increasing market pressure.

When it comes to communication around Active Demand it is a key aspect to

enable the participants of pilots and future customers of products and services to

understand the principles enabling them to ‘actively participate’. Only by active

participation the results will be optimal for the individual and for the system.

Establishing relationships between customers and retailers in the utility industry

has not been exercised much among most utilities before. Communication should

support households to Act (save energy and offer flexibility), to experience the

benefits (and consequences) of AD and to iteratively grow into their new role in

the energy system.

This chapter deals with the underlying motivations and inhibitors which can be

used to create the communication needed for making residential customers

engaged in Active Demand Services.

3.1. A (short) history of Utility Communication in

post-liberalization times

“No communication is an island” one could say with a small transcription of the

old expression. Hence, to successfully introduce a new story called “Active

Demand” to energy consumers it is a prerequisite to understand which stories

has already been told to customers from and about the energy industry.


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3.1.1. Liberalization process

European legislation on liberalizing the energy sector took its first step in 1988

with the release of “The Internal Energy Market” from the European Commission

and soon thereafter real legislation was released with Directive 96/92/EC

(electricity) and Directive 98/30/EC.

These political actions, which can be said to follow a more global pattern for

liberalization throughout old - often state owned – and integrated – monopolies,

created a whole new landscape for the utilities throughout Europe in which to

manoeuver. The political aspirations were high as the state ownership or private

monopolies had failed in improving efficiency within the sector. To introduce

competition in the areas no longer considered to be “core monopolies” such as

generation and supply appeared possible and effective, also in the electricity and

gas sectors and it was expected that prices should fall, companies merge and

production units and grids be modernised.

In the years to follow not everything followed the plan laid out and the political

aspirations behind it. In the 2002 Energyforum Global Report [Lewis et al, 2002]

the state of the liberalization process is described as slow – close to non-existing

in many countries except for the UK and the Netherlands.

Today it is still discussed how far the liberalization process has yet emerged. The

American financial consultancy and IT solutions provider Sungard Financial

Systems sums up the way they see it in this way: “In November 2012, the

European Commission (EC) released a report on the progress of the

liberalization of the European energy markets. The liberalization effort, underway

for more than 20 years and culminating in the Third Energy Package of regulation

released by the European Commission in July 2009 and effective September of

the same year, envisioned a more or less homogenous European market for

power and gas, one in which supplies of energy could seamlessly cross national

borders, ensuring adequacy of supply at the lowest possible price for consumers.


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However, in the Commission's November report, the regulators note that

progress has been much slower than originally envisioned, and the goal of a fully

liberalized market by 2014 is in jeopardy. In fact, 18 of the 27 member nations

have yet to complete the required transposition of the rules contained within the

third energy package into national law and continue to operate regulated energy

markets, well past the March 2011 deadline for transposition” [Sungard, 2014].

So let’s take a look at the different communication strategies and efforts from the

industry over the past 15 years

3.1.2. An early start

As can be expected the first efforts in this newly liberalized market basically

focused on trying to get people’s attention and introduce the company brand.

In 2001 RWE introduced themselves to the market through a campaigning

activity based on John Lennon’s immortal “Imagine” and a basic storyline which

could be seen in different versions over most of Europe with different brands and

different music, but all explaining the importance of electricity and those who

secure a safe delivery. Not much can be said of these

early communication efforts beside the fact, that they

proved very professional, most probably expensive but can also be labelled

something like: “- We’ll give them a good song and hope they’ll like us”. Basically

people liked the setting and the song. The only thing was that the product was

invisible for the end costumer inasmuch as it came to life on the screen.

The classic dilemma of the communication was,

that it made no differentiation whatsoever between

the utilities, and soon they needed to be more

focused on how to stand out from the crowd.

RWE commercial; Imagine 2001

E.On commercial; Mix it 2001


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To stand out, the electricity product in itself needed to be unfolded and made

more tangible. Most people still saw electricity primarily as a commodity.

E.on’s 2001 campaigning activity; “Mix it” is a good example of these first

attempts to stand out. Coupling with a world famous actor and the idea that

people could themselves decide the source of their energy generation proved

how hard it is to explain and educate consumers to a complex product in a field

which for most customers was absolutely incomprehensible.

3.1.3. Brand building

Upon these first attempts to

differentiate the players in a field not

yet marked out, a next logical step for

the utilities was to start brand building

or simply name recognition. The

number one target to achieve in those

years was how many people would be

able to name your company, when asked in a survey. Among these campaigns

most are very professional and very costly sponsorships indeed – not at least

among national football teams.

A study of these early attempts concludes that even though being extremely well

made (and costly) the communicated values do not match the target group.

“Branding In a Climate of Change” [Wellendorf and Larsen, 2009]

The study continues to state, that the

gap between the consumer, the

messaging and “energy” is just too

big, so messaging ended up

becoming unclear and in a time of

rising energy prices the spending on

DONG Energy sponsors Danish National Football team 2004

Iberdrola campaign 2010


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commercials seemed ridiculous to many people.

As stated above, this trend can be found all over Europe with most sponsor ships

ending in between 2010-2012.

In the more recent versions of these communication efforts the relation between

the individual player and the individual customer comes into play, like in the

beautiful Iberdrola campaign from 2010.

But still the messaging is unclear and primarily focused on creating a brand and

over the last 4 years the trend of utilities spending large budgets on brand

building through big sponsorships has almost disappeared.

3.1.4. Educating and caring utilities

The branding effort in the industry left many customers annoyed with the

supposed high marketing costs and all over Europe customers were falling either

ignorant or even in opposition to the communication efforts of the utilities. Also

the effectiveness of the communication had only proved to heighten the

knowledge of the industry and a few named

companies and not the likability of the

individual utility, so a new strategy in the

communication from the utility industry can

be observed from around 2007-2009 –

although overlapping with traditional

branding campaigns, this trend grows

stronger until the beginning of the financial

crisis. It is an attempt to educate the customers and to show the importance of

the product – and to how serious and caring the utilities are in providing it.

Still though, many people had a hard time relating to the product – and

increasingly the sector was under pressure to show evidence of market

competition.

ERDF campaign 2009


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3.1.5. Crisis Communication

And then – a change appeared. Following the financial crisis a head start was

given for the sector to find a new focus and create a new relation to both

customers and stakeholders. In most of the Western world, the energy sector

became part of the problem; in terms of finance (not providing cheap energy for

industry and consumers alike) and in terms of climate change (still firing on fossil

fuels). Investments and political discussions followed - and so the strategies for

engaging in electricity markets in Europe saw dramatic shifts; Within these new

terms of engagement a fossil free energy sector emerged as a major focus for

regulators and with it concepts like Smart Grid and Demand Response.

It also gave way for a new ways of communicating with customers:

All over Europe the utilities created new

green products and a new green profile.

But for the end customer it was still hard to

decide whether the energy really was

green – since it appeared to be the same

product whatsoever.

In terms of communication the appealing

thing for the industry was that all of a sudden the product became more tangible

and even more likeable.

It was easy to communicate about being green – but it was also dangerous

ground; what many utilities realised as they became easy targets for consumer

groups stating that all the fuzz about being green was not true and that the

industry made a profit out of destroying the environment.

As concluding remarks to this short

story of customer communication

Enel Green Power 2010

Anti RWE ad made by consumers on Social Media, 2010


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in the utility industry it is clear that the industry has indeed fought hard to build a

market and establish positions amongst each other– and has made mistakes

along the way, which has caused customers to become dissatisfied with the

industry as a whole. The other side of the story though, is the fact that within the

short time span of 10 to15 years, the industry has also been capable of changing

point of view and adapting to both stakeholder’s and customer’s changing

viewpoints many times which proves an adaptability and engagement in creating

customer relationships.

3.2. Building relations

3.2.1. A steep learning curve

The whole process of creating a market and changing the utility industry to a

commercial business has happened extremely fast. In only ten years a whole

sector has changed its DNA, from slow moving, securing stability and providing

only long term investments to fast moving, ever changing and focused on

profitability. Many people will claim that this process is not yet finished and most

of the industry will agree on that.

On the other hand it must also be acknowledged that change has indeed taken

place and the industry from 10 years ago cannot be recognized in what it has

become today. When it comes to communication, the learning curve has also

been steep, and so the media landscape has also changed dramatically. There

was nothing like Social Media in the year 2000 and the internet had only just

begun to prove its worth back then. This is easily forgotten when looking at the

many flaws and miscommunications which can be found when analysing the

communication trends from the early years up till now. To start communicating

about Active Demand and to create a starting point for the communication about

it, all this history needs to be taken into account. From the ADVANCED project

new knowledge has also been found, which can guide us along the way to find a

new starting point.


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3.2.2. A starting point for customer communication

When looking at the results from the surveys in the ADVANCED project D4.2

(Report describing the AD perception in Europe differentiating between

consumers segments) we can identify some very interesting correlations between

customer perceptions and customer actions, which can serve as a way of

identifying where to start the communications process – and in terms of getting in

the loop of the AD Communications Wheel, which targets and goals to start out

with.

The same correlations has been shown in D5.1 (Report describing the validated

conceptual models of active consumer participation in AD) where the correlations

are shown in relation with the conceptual model:


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By isolating the correlations a chart can be build, which shows the different

correlations and how they are related to each other:

Figure 2. The Validated Conceptual Model - Key Validated Variable Inter-relationships, from D5.1


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First of all it should be noted that two areas stand out when it comes to the key

areas of Active Demand “Customers paying more attention to consumption” and

“Customers desire to save Energy”.

One correlation lies in the fact, that a “high bill as share of income” makes

consumers more likely to look after savings. Another correlation lies when people

feel informed; they are also more likely to desire energy savings.

In this respect it is important to observe an important difference. With a high bill

as share of income customers tend to be dissatisfied with their energy provider

whereas, when they feel informed they tend to be satisfied with their energy

provider. Satisfaction with the current or existing supplier is not enough in itself to

attract people to participate in AD, but it is an important step to create trust with

the industry. And from the survey it is clear, that there is a correlation between

trust in the industry as a whole and the readiness to take on services like AD.

From this much shortened summary of the quantitative survey it is in other words

clear, that making people feel informed is an important element in making AD a

success. From a communications perspective this is even more interesting as

communication must be accepted as one of the most important aspects of

Figure 3: Correlation chart between areas of the

quantitative survey of the ADVANCED project (D 4.2).


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making AD a success. When looking at what makes people more informed one

important measure comes about; being introduced to easy energy monitoring and

managing tools and services.

In chapter 4 we will look at how a communications strategy can be built on the

findings, we have just sketched out here.

3.3. Advantages and challenges

In this chapter we have been looking at the different explicit and implicit

narratives which need to be taken into account when communicating to the

customers with whom we want to interact and with whom we want to create a

relation which in turn can make Active Demand a success for reducing costs and

CO2 emissions in and from the industry.

Firstly we looked at the complexity of the utility industry and the very short time in

which it has existed on a commercial playing field. It has given the industry a

somewhat discredited reputation among both customers and policy makers.

Whether this is due to much too high expectations for rapid change and lower

power costs or failure in the industry to make the right choices is not for this

report to guess upon. In a communications perspective it is nevertheless in

important factor to be aware of.

Secondly we looked at the history of utility communications which in turn is also a

story of a very steep learning curve and an industry maturing very fast in the art

of communicating. The utility industry is in many ways also a proof of the fact,

that communication cannot be separated from a business’s actions. In the first

years of the liberalization in the industry it is only all too clear when looking at

how and what was communicated, that marketing and communication were

separate entities of the utilities and not an integral part of the management as

communication and actions all too often looked as they were not coordinated. We

only know begin to see a change of this perspective.


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Thirdly, we have been looking at the opportunities which lie in the large surveys

conducted as part of the ADVANCED project as they tell us a lot about the

correlations of peoples actions and their perceptions of the industry and their

likelihood to participate in service offerings as Active Demand. In this respect

these surveys can give us a starting point for creating a customer

communication, which will lead to success for Active Demand programs in the

industry.


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4. On communication channels

To begin the discussion on how to create a successful communication for

introducing AD, let’s take a look on the development of communication channels.

This is needed to understand the difference between the communication which

has been used so far in and by the industry, and what is needed in order to

succeed in implementing an AD programme.

The media landscape has changed dramatically over the past 15 years. Hence,

in this chapter it shall be briefly discussed on which ground our modern

communication channels are build, and what dramatic impact the change from

traditional to digital media has had on the way we are communicating today in

contrast to the way most communication was designed only a few years ago…

4.1. The development in communications

When the liberalization process in the utility

industry started around the year 2000 most

communication was based on traditional media

like TV commercials, ads in newspapers and

magazines

, letters

and outdoor print. Land line telephones was

the most used tool for instant

communication, with the internet and email

communication moving along fast. The hottest thing on

the street was the Nokia 3210, which helped to

revolutionize the mobile phone industry and in 1999

became one of the first mobile phones to reach mass

market potential.


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The following 15 years saw a dramatic change in almost every aspect of

communications – and

in doing so also changed the

perception of customers and the

way in which to reach them.

From the year 2000 and onwards all traditional media, which had ruled the media

landscape for more than 50 years started to loose importance and impact and

only one platform overtook almost every aspect of the space; digital

communication.

4.2. Digital communication

Nobody could foresee the impact digital

communication would have on everyday

life, business and culture, when people

slowly started to use the internet during

the 1990’s. This might best be illustrated

by the dot-com bubble which burst some

time in 2001, when the market realised, that the expectations to the businesses

of the digital era had been massively overrated and misunderstood – in other

words, that the market and businesses were extremely immature and that almost

no one understood the mechanisms from which they functioned.

Nevertheless the channels of digital

media continued to grow in a way

and at a pace, which has seen very

few if any precedents in the history

of the modern world.


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This is true whether you look at email rates, the development and shipment of

smart phones or active users on social media platforms like Facebook.


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4.3. Change in the media landscape

This somewhat dramatic change has also meant a change in the way people

relate to communications. The great omnibus media no longer have the impact

and power they used to, when people start to seek for information on a much

more individualized basis.

With this change the traditional media from broad and passive channels like print

and TV declined and the more targeted and active saw a dramatic increase.

And patterns changed from communication traditionally being sent to a customer,

and the business waiting for the customer to answer the communication to much

more channels – but still only one way. This situation though, only lasted as long,

as the new platforms were still only one way communications channels

Figure 4, “Change in marketing channels” Presentation from Danish marketing

agency. Magnetix 2009


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The really dramatic change happened, when all communication started becoming

individualized, interacting and bidirectional. At this stage, there was no longer

use for a special outbound communication to reach a certain customer, which in

turn returned it to the sender. There were no more sequences on which to rely

but instead a multitude of actions and options - and thus communication changed

from being one way messaging to becoming interaction and interdependence –

which is on the one hand much harder and much more complex to handle, but on

the other hand also holds a big set of new opportunities to create better customer

relations.

Figure 5, “Omnichannel marketing” Presentation from Danish marketing agency. Magnetix 2009


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5. Methodology

From understanding the development of communication in the utility industry and

during the years in which it has been liberalized now is the time, to look at the

methodology from which a new communications platform can be developed.

In this respect it is important to realize that Active Demand is not a tangible

product but more of a service. One could even argue, that it is not even a service

but rather a concept, where a company and a client or customer reach a mutual

understanding of the needs of the other - and accepts their different roles and

responsibilities in making the concept function to the benefit of both parties.

5.1. The AD Communications Wheel

To understand the mechanisms of communicating a concept to a mass audience,

rather than a product, it is fruitful to look at “social marketing”, which became a

discipline in the 1970s, when pioneers of marketing theory; Philip Kotler and

Gerald Zaltman realized that the same marketing principles that were being used

to sell products to consumers could be used to get acceptance of ideas, attitudes

and behaviours.

In 2007 Kotler together with A.R. Andreasen defines social marketing as

“differing from other areas of marketing only with respect to the objectives of the

marketer and his or her organization”. In this respect social marketing seeks to

influence social behaviours, not to benefit the marketer, but to benefit the target

audience and the general society. [Kotler et al. 2007]

Like commercial marketing, the primary focus is on the consumer; on learning

what people want and need - rather than trying to persuade them to buy what

happens to be produced. Hence it is important to observe the difference between

talking to the consumer, and about the product – where the latter in most

instances will be the focal point of most businesses - all communication, which


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seeks to involve and engage the customer, should take its starting point in

identifying the motivations of the individual in focus.

In this respect, the marketing and communications theory of Kotler and

Andreasen supports the different stages identified in the conceptual model of

chapter 5.1 (Report describing the validated conceptual models of active

consumer participation in AD)

In this chapter the stages of the conceptual model, which was developed in D5.1,

have been transitioned into a concrete tool that describes a communication

process called the AD Communications Wheel. It builds on the different stages of

the AD customer in the Conceptual Model, but transforms the developments into

actionable steps.

In doing so the AD Communications Wheel also introduces a learning curve for

both the utility and the customer. It builds on the fact, that customers are not

alike, do not share the same readiness to participate in programs like AD and

therefore needs to be addressed in different manners. Similarly it encompasses

the other factual part of the equation; that utilities need to change and adept to

customer behaviour in a similar way as the customer does. In other words: the

communication will have to change in accordance with the changes in the

engagement between the two parties as it grows larger and they become more

and more interdependent.


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5.2. The Steps of the AD Communications wheel

Taking the first loop in the AD Communications Wheel will always demand more

attention and resources than when the steps has already been taken once. The

initial starting point would normally be to describe what we are trying to achieve.

5.2.1. Targets and Goals

Targets and goals

Stake-holder

analysis

Identifying customers

Data collection

and analysis

Communi-cations

Measuring effects

Organizational set-

up

The AD Communi

cations

Wheel

Figure 6: The AD Communications Wheel


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The first step to be addressed is the focus of the communications and should

initially consist of answers to questions like: What is the primary focus of the

communication – i.e.: Are we focusing on education, information or actual

participation? These questions could (and should) take their starting point in the

Conceptual Model’s 5 key areas:

1. Intervention

2. Enablement

3. Drivers

4. Actions

5. Sharing experiences

It is utmost important, that each communication addresses only a very few

elements, since trying to communicate everything at once will make the

communication unclear and less understandable – and in the end the effort will

most probably have no effect.

Figure 7: The Validated Conceptual model from D5.1 showing the 5 key areas


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In this respect the first step is almost entirely a strategic decision, which needs to

be discussed and agreed between Directors of Business Development and

Directors of Marketing and Communication.

An example from ERDF, being one of the participants in the ADVANCED project

could serve as a means to understand this in a more concrete manner. The

following statement was articulated during the process of the project:

Within its current strategic and operational development along the lines of Active

Demand ERDF wants to:

1. Better understand what the real potential of AD is:

What is the actual level of consumers' interest and engagement?

Are the impacts of different types of AD programs on load curves?

What are the economical, sociological, technological and regulatory

barriers and, on the contrary, key success factors?

What will be the available potential in the next years?

Are there interesting benchmarks?

2. To learn about the impacts of AD for DSOs:

What are the opportunities and risks of AD?

How can we use AD to optimize distribution network planning and

construction, system

operations, management of emergency situations, etc.?

What are major issues to optimize the value created by AD? (for example,

identify best practices in terms of cooperation between TSOs, DSOs and

AD operators)

What are the prerequisites to avoid destroying value at the distribution

level (when using AD exclusively upon national energy balancing criteria)?

What are the views of foreign DSOs on these issues?

To share our ideas and better understand the positions of other parties

involved


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Looking at these goals and targets it is worth observing, that they all belong to

the first three parts of the Development & Learning curve in the Conceptual

Model: Intervene, Enable and Drive.

Along the same lines it should be noted that all targets are related to answering

questions – not to achieve a particular change of behaviour or start the process

of actually implementing AD.

This will almost always be the case in the early stages of a communications

programme. A more matured programme will normally have most of its efforts

focused on the last three elements: Drive, Act and Share and will focus more on

how to influence and educate the recipients of the communication.

Source: Marie Miquel; Direction Strategie et Grand Projets, Aug. 14th

2014


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5.2.2. Stakeholder Analysis

Getting back to AD Communications Wheel, the next step is the

Stakeholder analysis. Before initiating any communication, you

should always consider the environment in which the

communication is going to take place.

The illustration above describes the 5 key factors related to stakeholder relations

identified during the project development. To understand the content of a

stakeholder analysis in relation to AD, here is an example.

Expectations of Politics

First of all are the expectations of the legislators and regulators. The

observations should be made at both international, EU and at national level,

primarily focusing on larger trends and the most important aspects. It is merely a

question of being observant of the megatrends of the industry and the political

aspirations behind current legislation.

Figure 8: Stakeholder Umbrella. Roelien van Attema, TNO


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As an example the above chart illustrates a global trend in governmental

spending on providing green stimuli in different countries. This trend is

furthermore backed by statements from leading politicians, that green jobs is the

way out of the economic crisis, as president Obama told the world in 2012 after

accepting the nomination for presidency for a second time:

“We have doubled our use of renewable energy, and thousands of Americans

have jobs today building wind turbines and long-lasting batteries.”

Even though this statement and the politics behind it has been (and still is)

questioned, it remains a major influencer of political decisions and investments

and thus should be seen as an important part of the political environment in

which the communication for AD has to be performed. Hence the stakeholder

analysis is not about arguing about what is right or wrong but rather to observe

and describe the different political motivations and trends, obviously in an overall

descriptive manner and focusing on what is important on a national level.

Expectations of the public

On a more indirect level the observations of the public (i.e.: all citizens) also has

major impact on the way any communication from the energy industry will be

received. Thus, the expectations of the public needs also to be taken into

consideration before starting to communicate. As it will be shown and discussed

Figure 9, Green Stimulus Spending, HSBC 2009


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in the chapter 4 “Identifying the Actors” one way to deal with the different

expectations of the public is to identify segments and communicate in

accordance with their different values and belief systems.

On a more overall level though, it is worth noticing from the analysis in D4.2

(Report describing the AD perception in Europe differentiating between

consumers segments) that the impact of the current economic crisis on a national

level has a significant impact on the way new measures like AD is received by

the public. This might explain why some of the southern economies of Europe

seem to have more incitement to reduce energy costs by participating in AD

programs, compared to some of the more northern economies, which is one of

the more striking findings in D4.2.

In the public domain is also other major influencers, like the Fukushima disaster,

which led both Italy and Germany to phase out nuclear power due to public

pressure, even though nuclear was previously seen as an important means to

reduce CO2 emissions.

Needs of DSO’s and retailers

The utility industry needs to balance between the legislator’s demands for a

competitive market and a change to greener energy generation on the one hand

and the consumers focusing on stable supply and low cost. In this situation all

investments in new AD measures will notoriously be part of a careful cost benefit

analysis. The results of which might in many instances hinder an immediate

massive roll out of new technology since the economical aspect of AD has

proven difficult to predict, which again results in smaller roll outs and a step by

step approach to introducing AD.

Marketing and Behavioural insights

Two other measures - Marketing and Customer Psychology - should be observed

as part of an initial stakeholder analysis.


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As an example of how customer

psychology can influence the direction of

customer communication a consortium led

by Aarhus School of Engineering and the

Alexandra Institute performed an

anthropological study of how users interact

with new technology designed to reduce

and control energy consumption. The study

which is known as MC-HA or Minimum

Configuration – Home Automation

concludes that people tend to interact with

new technology at three levels; Personal,

Social and Societal and which level is the

most predominant changes with the context.

So the study concludes; Customer’s behaviour are irrational – but even so, they

want to be taken seriously. Customers tend to act simultaneously in various

areas. Their actions are context dependent and often conflicting. Hence; in

accordance with this study any communication based primarily on rational and

educational content is most likely to fail.

In the following chapters another approach to reach customers and engage them

in AD is suggested. It is based on meeting customers in their everyday life with a

methodology known from modern behavioural marketing based on data

generation and rule based dialogue.

5.2.3. Identifying customers

After initially deciding the reasoning behind the communication

and the landscape in which it is going to take place the next step

is to identify who will be addressed in order to get questions

answered and goals achieved.

In this part of the loop two elements are taking precedence. The first element is:

What do we know about our current and future customers? The second element

Figure 10, Entwistle et al, 2009


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is defining our current relation with them. We will examine these elements closely

in the following chapters, therefore we will not go into this discussion here.

5.2.4. Data collection and analysis

In the next step of the communications wheel we will should look

at our existing data. In the preceding parts of the wheel we have

decided what we want to say and to whom we want to say it to,

and now only one thing remains before we can start the actual

communication; identifying what we know about the customers from before. This

will enable targeted and personalized communication and with this increase the

potential effectiveness of the communication.

Looking at existing data enables much more individualised and pertinent

communication through profiling and segmented content. Using data as part of

the communications process is often underestimated. As an example the

combination of consumption data, a simple benchmark and an acknowledgment

will in most instances prove the professionalism and seriousness of the sender

and make the communication effort much smoother.

This part of the communications process is also where it is recommended to think

ahead for the next loop in the Communications Wheel. For example: So if we do

not have an email address, should this part of the communication give us access

to communicate via this channel next time?

The data collection and analysis should always look to expand our knowledge of

the customers and collect new knowledge to build on.

Much of this will be discussed in chapters 6 and 7.

5.2.5. Communications

Now we know what we want to achieve, to whom we want to

speak and how we are able to do it. Hence, this part of the

Communications Wheel is what most people will define as the


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“real” thing. This is where:

1) The message is defined

2) The channel is chosen

3) The timing is decided upon.

The communications process is likely to be creative and will be the most tangible

part of the process. What is important to emphasize is, that no communications

effort is better than the preparations allows it to be. Even though you can have

success with a communication out of chance, you will most likely not be able to

identify why - and in this way the momentum gained from the success will be lost

in trying to find out what happened.

Hence, in this part it is discussed what are the best means to reach a specific

customer group; are we for example able to reach out via email or is it a very

specific target group which is better addressed on the phone? Or even; do we

need to address a lot of people (that are more or less anonymous to the utility)

and thus use mass media?

Part of constructing the message is also to look at how best to address the

specific target group and look for opportunities to time the effort for maximum

impact. We will examine this further in chapters 5 and 6.

5.2.6. Measuring effects

So did the communication have the expected effects? The

answer to this question will in almost every instance be both yes

and no. When it comes to complicated and complex

communications like engaging customers in Active Demand it

should even be expected to have more “no’s” than yes’s”. The delicate part is,

that in most businesses success is linked to answering “yes” to this question and

failure linked to answering “no”.


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If we want to learn and not do the same mistake again this prerogative is wrong

and it should be stressed, that a lot of important knowledge disappears from

businesses, when employees are trying to cover up their mistakes because they

are afraid of being sacked when a communication effort has gone wrong.

Hence, the measuring of effects should be taken very seriously in the business

and instead of asking whether the communication succeeded it is much more

fruitful to ask: What did we learn? In this way communication is also accepted as

a process instead of a means to a definite end.

5.2.7. Organizational set-up

The last part of the loop before it can start all over again is to

look internally at the organization. Where the measuring of

effects takes a look at external changes it is almost as important

to look at the deliveries and responsibilities of the organization.

As each loop in the communications wheel also changes the relationship

between the sending and the receiving party it is necessary to seriously consider

these changes of also being part of the business’s set-up. As an example AD will

collect a lot of data. Who in the organisation is responsible for taking care of the

analysis – and what about privacy issues?

Will the changes in the relationship give rise to new questions from the

customers or new expectations? Who is responsible for hardware installations

and are there new risks to take into consideration regarding billing, when the

complexity of the relationship expands. In complicated environments and with

more complicated products involving AD the customers might also choose to get

in contact with the utility to try and clarify issues that are “open” from their point of

view (i.e. additional call center capacities might be needed and all channels of

communication the customers might use should be aware of what is ongoing and

where to “send” customers asking for additional information on AD.

Hence this part of process seeks to identify and prevent misunderstandings

which can occur as the result of the changes in the relationship between the

costumer and the company.


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6. Identifying the Actors

When focusing on creating a communications umbrella for residential customers

the identification of the actors in this chapter has been limited to discussing the

actors in the relation between residential customers and the utility industry.

To start defining the actors three noticeable elements from the preceding

chapters should be taken into consideration.

6.1. Knowing your customer

First there is the knowledge gained from the surveys conducted in the

ADVANCED project. As previously shown it has been possible to establish a

hierarchy of correlations between the utility industry and its customers. It gives

us insights into the relation between the end customer and the industry and

creates a path on which to start the communications.

6.2. Knowing your targets

The communication path helps us in determining targets. From an AD

perspective several steps are needed in order to create success for any given AD

project. As a first step customers need to feel informed and trustful.

With this in mind it is paramount to realize, that any AD activity will be linked to

other activities from the industry as a whole. Hence; in defining targets for the AD

activity also targets for the business in itself should be articulated. As an

example; could and should the AD communication activity be linked with a

retention or a selling activity and is the communication then performed by a

distribution company or a retailer – and is this even legal?

The target could also be to help customers reduce their energy consumption or

even to make them become happy customers or even ambassadors. Targets

need to be quantifiable and measurable and it needs to be agreed when and how

these targets are measured. The classic mistake in this process is to define only

sales targets of products or in the case of AD only the amount of flexible kWhs.

Since any AD activity is long term by nature it is all about relationship building.


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6.3. Knowing your responsibilities

As we have learned from the surveys establishing a relationship and creating

trust are two main factors for a successful roll out of AD. This fact however, is

also a challenge in the sense that if a business fails to deliver in an already

established relationship, then the impact is much bigger because expectations

are much higher. – Just like if someone you know well fails you… Everybody in

the business needs to understand that - and responsibilities need to be delegated

and appointed from the beginning.

6.4. Customer segmentation

As a starting point it is worth looking at the principles of customer segmentation

in the utility industry, and how they are useful in determining goals and ambitions

– not to mention describing strategies for the different groups. First a classic

example from a very well documented segmentation model from the Danish utility

SEAS-NVE.

The important aspect here is not so the much the model in itself as it is how it can

be used to specify the different ways to communicate to each customer group –

and ultimately define which goals to achieve.

Basic

Advanced

Rational Creative

The Comfy

The Economical

The Green

The Dreamer


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6.5. Defining customers – an example

As an example of the way the segmentation can be used is first a set of high

level descriptions of each customer segment - primarily to make it easy to

understand them. Underneath this high level definition is (or can be) a hierarchy

of determining factors, which eventually can be used as a questionnaire in the

dialogue with end-customers to make an initial segmentation, which in turn will

determine the next step in the communication cycle. To make the segmentation

more comprehensible it is also of value to create personas [Jenkinson, 1994] – or

personifications – of each segment. It means creating a character, with whom

you will be able to relate and who has a set of distinct characteristics which you

will find represented among the customers belonging to a certain segment. This

being said a persona should be seen as a tool and a representation, which can

help in shaping the right communication, but it will never be able to hold all the

elements from a segment, since segmentation per se can be subdivided into

each and every individual living human being on the planet.

6.6. Defining targets and means of communication

From understanding the basic values and preferences of the customer next step

is to determine how to communicate and what goals to accomplish. It need not

be in a long document analysing each segment – since in the end the ultimate

goal is to make each customer their own individual segment (like we all feel we

are, indeed). Hence this exercise is merely to agree on some common ground,

on which the communication can get started:

Segments Utility role Ways of communicating

The Dreamer Guide

Where can this take me? Inspiration, options, very

descriptive, lots of words and imagery, Many positive

words

The Comfy Advisor Step by step explanation, constant reassurance, not

too many words. Easy to understand diagrams,


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The Economical Analyst A lot of data – very few words. Comparisons, do it

your self-tools, savings/benefits

The Green Coach Asking questions – giving answers. Encouraging,

status on environmental benefits

6.7. Segmentation for Active Demand

One of the major findings in the ADVANCED study is the segmentation models

for Active Demand. From the surveys and the pilot projects in the ADVANCED

projects it has been possible to establish a segmentation which we in turn can

use to determine what and how to communicate with customers for an AD

programme.

6.7.1. AD segmentation model

TNS, which has been the responsible party for the surveys within the

ADVANCED project, has done a latency analysis based on the questionnaires of

D4.2 (Report describing the AD perception in Europe differentiating between

consumers segments)

In doing so they have identified four distinct groups, which can be described as

this:


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In identifying four distinct groups it would at a first glance be most appropriate to

fit these groups into a matrix in order to logically arrange differences and

similarities. As we have seen from the example above, this is also the most

common way to work with segmentation, but in the case of Active Demand the

four groups are ordered in different dimensions. This led to a reorganization of

the matrix into a polarized axis:

6.8. Personas in Active Demand

In what follows, the four consumer target groups that were identified within the

different steps of the ADVANCED project are analysed more deeply using the

Figure 11: Latent Class Analysis by TNS, August 2014

Figure 12: Four segments of Active Demand


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concept of “personas” [Jenkinson, 1994]. As described in the introduction to this

chapter a Persona is a “typical” or rather archetypical customer that could belong

to one of the segments. In this part each Persona derived from the segmentation

of the Active Demand surveys of WP4 (Quantitative surveys of ADVANCED) is

described more deeply and is provided with a “story” that describes his life, living

situation etc. more deeply.

6.8.1. Active segment

Daniel Martin - Active

Power by the people – let’s get into action

- When tucking his son into bed, he tells him a story

about a penguin that together with his friends comes

into action to preserve his icy nesting ground. “And

by a stroke of luck, without him even knowing, he

inspires all the penguins in the world”.

Daniel is 45 years old and works as a planner for a local construction company.

He owns an apartment in a city, where she lives with his wife, son and daughter .

He is an enthusiastic cyclist; he thus tries to juggle his time with his work,

children, work, household matters and his hobbies as efficiently as possible. He

does not hesitate to use technology to support him with that; before hanging out

with his kids he quickly orders some new t-shirts online and shares thoughts

about good routes on a social network for cyclists. On weekdays it is mostly not

before 6PM that Daniel and his wife come home after having picked up the kids

at grandma’s. In the weekend they like to be outdoors a lot, as well. For

transportation he prefers walking or cycling, but he is quite content with the new

small electric vehicle they bought ever since chargers became available outside

their apartment building.

Daniel has incorporated energy conservation behaviour in his daily life. Motivated

by a concern of how his children will be able to enjoy nature when they grow up,


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and the possible scarcity leading to an increase in costs, he actively looks out for

options to save energy at home. He recently bought a so-called ‘smart’ display

that shows how he uses energy in real-time. He also uses an app that, based on

his actual usage, compares with historic usage figures and figures of other

households. His daughter has her own app; a game with which she earns points

for environmental actions, such as collecting batteries and drying laundry outside

on the balcony. Daniel has a good laugh when his daughter points out to her

what she can do differently, yet he is glad to see her so committed.

Daniel likes a good debate on societal topics such as the energy domain. He

feels that energy companies should actively join in this discussion, and even

guide by making really clear how his actions, and those of the community, can

contribute to saving energy. Not in the least, the energy companies should be

honest and transparent in their standpoints and how they foresee the near future,

he feels. What will the main sources of energy be in the near future? Can he

make use of local initiatives for producing energy with sun and wind? And what

does this mean for costs and pollution? Daniel is inspired by a good dialogue,

rather than one-way communication through a marketing campaign. He wants to

feel challenged and supported by the people and organisations around him, so

that he in turn is motivated to take specific action and set real goals that will

actually contribute.


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6.8.2. Moderate segment

Maria Bruno – Moderate Progress is good, but one step

at a time

“A few years ago I never imagined myself playing

Patience on a tablet, but look at me now”, she

laughs while chatting with her friends. She is quite

proud of the fact that she often tries to adopt new

things.

Maria is 62 years old and lives with her husband in a modest-sized detached

house in a local town. Her children are grown up and now have children

themselves. Not all of them live close by, but the family enjoys coming together

on a regular basis to catch up and enjoy Maria’s pot roast. Although she did not

finish school and was a stay-at-home mum, she is quite savvy when it comes to

running the household. While her husband pays the bills, she is the one that

actually makes the household decisions, ranging from holiday destinations to the

insurances they have. Doing that, she likes to deal with the same organisations

she has known for a long time. Being retired and a central point for the family,

they spend quite some time at home.

Her mother already taught her to be modest with using water and turning off the

lights, as she felt she should not waste resources and she should save money.

Maria still continues these habits until this day. Also her children, motivated by

school programs, have influenced her to be more aware of the environment and

the positive actions she can take. This made her care more than she used to. A

while ago, the energy company called her and told about a renewed energy

contract with flexible (day and night) pricing in combination with a new energy

display. She went along with the proposal and had her new display installed

recently. It took some time to learn how to interpret the figures on the display, but

after her son explained it thoroughly to her, she now gives her energy usage

much more thought. Being home a lot, a significant part of the household budget


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is spent on the climate of the house (aircon in the summer and heating in the

winter) and she is interested in more efficient ways to heat and cool her house.

For Maria to take on new things and experiences, she must always be sure she

can rely on the help and service of other parties. For her, long-term relationships

are key. Also, her doubts should be addressed thoroughly, whether they have to

do with changing her habits and the effect that will have, operating new tools, or

her apprehension regarding privacy. Being coached and reassured, she learns

and becomes more self-secure. Step by step, she becomes more comfortable

with new things, and in a while, even becomes an ambassador.

6.8.3. Indifferent segment

Susanna Weber - Indifferent I have lots of other things to

care about

Having dinner with her parents, Susanna discusses

the plans she has for the future, which seem

unrealistic sometimes. She loves them for the

support and advice they continue to give her.

Susanna is 25 years old and lives in a rented apartment with her boyfriend in the

university town where she remained to live after finishing her study. She is

looking for a job; she obtained her master degree in Communication and the

amount of interesting and available positions in that domain is still low. In the

meantime, she does some freelance work for small companies in need for a

communication message or the like. Given her situation, she is home quite a lot,

more than most of her friends at least, resulting in more use of heating and

electricity for her laptop that is on for a large part of the day.

Energy in itself is not a topic Susanna is very much concerned with, though. She

believes her energy costs are quite low and besides being conscious about


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turning off the lights, there is not much she can do about it anyway since the

landlord is in charge of energy management of the whole building she lives in. Of

course she knows that the environment is not an inexhaustible source for energy,

but she feels that energy saving on a personal level is a bit futile considering, for

instance, many large companies that seem they cannot be bothered. Given her

situation, there are also other things that motivate her much more, such as

sustaining an income to pay for the rent each month.

Susanna has lots of plans and ambitions for the future, such as buying a nice

house, building a solid career, travel more, and maybe start a family. Being able

to grasp every possibility that comes along to shape her life is what drives

Susanna the most. She likes to spar with people she respects and trusts, and is

open to new ideas or advice on alternatives from them that fit her situation. She

is however not out to try new things that are seemingly pushed by large

companies and do not have a direct positive influence on her personal situation.

Her scepticism can be overcome by addressing and understanding her situation,

and by giving her easily accessible, straightforward and suitable advice.

6.8.4. Oppositional segment

Simon Miller – Oppositional Listen to the man in the street

“Sure, those people should do whatever they please, but

not in my backyard”, Simon grunts as the local windmill

initiative is discussed in the pub.

Simon is 55 years old. He is married and has 2 children; a

16 year old son, and his 23 year old daughter who lives

close by with her husband and baby girl. He lives in a residential area of a

midsize town, where he owns a terraced house. He likes to do a bit of gardening

in his small backyard and enthusiastically supports his local soccer club every

Sunday. Simon works as an administrative official for his municipality. He is


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committed to his work and he enjoys the contact he has with his colleagues,

although he does look forward to his retirement sometimes; he struggles with his

health and high blood pressure, and he would like to be able to spend much

more time with is grandchild. But he is well aware that his work pays the bills, and

he surely does not want to have to worry about his expenditures, which are rather

modest anyway.

With the same amount of devotion towards his family and beloved soccer club,

he opposes to institutional forces that want to interfere with his life. For instance,

being forced into other behaviour by what he calls ‘sensation seekers’ who

proclaim climate change, upsets him. The saving tips he has received from the

energy company once, he thus considered to be intrusive rather than helpful. He

does not care too much about his yearly energy bill; it is quite the same every

year and he does not really know how his own behaviour can influence the

figures.

Simon does have regard for authority, but only if it is earned. He puts trust in

organisations and institutions that have shown understanding for his situation and

for his neighbourhood, and actually listen to what is important to them. He is

open to new ideas and experiences, as long as they are shared and brought by

people he can relate to- and not “some guy in a suit who tells what’s going to

happen and that’s it”. On the other hand, if he is educated by someone he

recognises as one who understands him, he is very willing to learn.


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7. Building an Engagement Engine

From describing segments, creating personas and thus making them come alive;

to understanding the dramatic change in communication which has taken place in

the past 15 years, the next step is to start identifying the appropriate means in

which to establish a relation with each segment.

Taking into consideration the segmentation model and the demand for interactive

communications we can build a model to describe the different means for the

individual segments. For the segments within the AD segmentation the model

looks like this:

From this differentiation in means of communication for each segment also the

targets within the scope of introducing Active Demand can be illustrated using the

same methodology:


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From this point on the actual goal setting is becoming much more tangible and

the next step in the process can start.

7.1. Knowing your targets

In returning to the AD communications wheel from the third chapter:

Figures 13 a and b: ADVANCED segment communications approach


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The first thing to do is to define the ambitions. The nature of these ambitions will

determine how the actual AD communication effort is designed as it will seek to

support the customer experience related to the goal setting. The nature of the

targets can be divided in to sub groups like this:

Sales and services: Ambitions, markets, products, offerings

Building relations: Customer Life Cycle, differentiating customers

Customer Retention: Segmented targets and propositions

Customer in-sights: Customer database and profiling for accumulated

knowledge and business planning

7.1.1. Benefits from communicating AD services

Considerations over the different benefits which an investment will deliver will

normally be included in the process of target setting. Not only, but to a certain

extent to enable an actual business-plan to get built. The AD communication

supports in this respect a number of areas, as it gives a natural and direct access

to each customer participating in the programme. The following are a number of

examples, which relate to both distribution and retail business, depending on

which part of the business is supposed to run an AD programme:

Increased marketing effectiveness

Reduce reliance on expensive direct mail, advertising and telesales

Communication will not be identified as marketing, so it can be distributed to

all consumers – an added benefit as greater numbers of consumers opt out

from traditional forms of marketing communication

Will give access to the customer at multiple platforms – with their consent

Incremental Customer Acquisition

Deliver proposition differentiation

Move the sales conversation away from price and towards support,

understanding & lowering bills

Cross Selling Opportunities


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Energy efficiency insights will identify where customers are wasting energy

and suggest products and services that will reduce long term usage

The communication with the end-customer will create insights into energy

waste and where energy use can be optimized

Possible Home Energy management System Product Sales

Hardware that will capture granular consumption data enabling insights to be

gathered and greater savings to be made

Hardware that will deliver greater control to customers, so in the future they

can take control of changes within more advanced ToU commodity tariff

regimes.


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7.2. Knowing your responsibilities

Last, but not least an organisation running a communications cycle based on the

AD communications wheel should consider legal and organisational issues –

both in order to avoid crossing the line of data privacy and as importantly to

secure that the whole organisation is supporting the new way to drive customer

relations. In following the steps of the communications wheel this should both be

considered in the “Stakeholder analysis” phase and after a communications cycle

has been maintained referring to the section called “Organizational set-up”.

7.2.1. Electronic consents

Using personal data in one-to-one communication requires in many countries an

active consent from each user. Some times this has to be added to the service

and/or privacy policies of the company. A customer engagement programme like

AD needs marketing permissions in order to initiate any communication which is

even the slightest bit marketing oriented or individualized in the way that was

described earlier. Furthermore it needs a lot of individual permissions from single

customers in order to create a viable business case and produce the desired

results. If such permissions do not exist at the outset a non-individual “buy-in”

programme needs to be instigated.

This chapter will not go into detail with concerns related to electronic consents or

data privacy, which is much more thoroughly explained in D6.4 (Report on

privacy and data protection impact assessment).

http://www.google.dk/url?sa=i&source=images&cd=&cad=rja&docid=7VLDBoa2ToHnYM&tbnid=4ndKasmcUdExUM:&ved=&url=http://www.saadkamal.com/privacy-lovers-can-now-opt-out-of-google-analytics/&ei=tGiHUYWYG8fGtAbDlIGwBw&psig=AFQjCNFMEL9lJwy_tNqsOcWVeNpOOU14xA&ust=1367915060493058


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7.3. Internal involvement and understanding

Starting up an AD communications programme requires initially only a few

resources from the company providing the service – it should be easy to get

started.

On the other hand it also has the risk of alienating the internal business from the

customer dialogue and the customer insights gained from starting to work

systematically with customer relations.

During the process of rolling out the AD related offerings month by month and

year by year business and product owners have to be involved and are needed

to give input and need to be updated on progress, insights, leads and sales

generated on an on-going basis.

On-going feedback is required from the business in order to fine tune messaging,

tactics and graphical appearance as well as an overall understanding of the

concept is needed to get support from the managerial level.

7.3.1. Competences and staff

The company providing an AD service offering should set a team working with

the Active Demand communication. The team should provide input to and make

quality assurance of all AD services and offerings to ensure the offering will not

offend the customers making them turn their back to future offerings.

Suggested staff for a business running an AD communications programme:

One project manager – full time

Involvement of all relevant business unit decision makers

Including visual branding responsible

IT resources for providing data and setting up integration

7.4. A project oriented mind-set

Whether an Active Demand programme is kicked off by an initial project which is

setting things afloat or it is being directed by a certain department – or even


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departments - working continuously with customer engagement should not be

taken lightly, as it demands a constant focus not to fail.

After the first communication cycle from the AD communications wheel, the focus

changes to a more process oriented approach where small insights are obtained

and optimization is carried out on a rather tactical level. This can raise the

demand for a different group of people working with the programme on an on-

going basis, than the ones initiating the programme.


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7.5. Getting started

Building the engine to maintain AD communications and establish an ongoing

relationship with the end-customer can be described in three steps:

Strategy, conceptualisation and ambitions

The first step is about defining the vision and the strategy. It consists of various

workshops defining the scope and will eventually end up delivering an

implementation plan and a budget

Building, integrating and implementing

The second step is building the solution based on the output from the strategic

phases. This is half technical; delivering the rules engine, the usability, the

technical integration. But the other half is as important – delivering the content,

the graphic design and the project management to constantly keep the focus on

the overall strategic decisions.

Delivering, developing and revisiting

The third step is the launch. But launch is not the right word. It is more of a

beginning. As soon as the AD Communications engine is running it has to be

constantly monitored, developed and accustomed to customer behaviour.


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7.6. Strategy, development and implementation

Implementing a digital communications strategy is closely related to the steps

taken in the AD Communications wheel. The difference comes from the fact, that

when you implement the strategy it will initially involve also building a software

and hardware system to support the growth and scaleability of the

communications efforts. In other words, the first time the communication process,

described in the AD Communications Wheel is started, it involves also building

the system to support it for the future. In this section, the first implementation is

decribed in six steps.

7.6.1. First step – goals and KPI’s

Initially the first step is a workshop, which will enable the out-coming strategy to

aim for the right targets. It is about understanding the specific needs of the

business. This first step is closely linked to the first two steps of the AD

Communications Wheel

The first work shop should bring together a number of either

external experts and/or employees combining knowledge on

customer engagement, data analytics, energy products and

digital communication. The first work shop should also include

people from product development and marketing.

The workshop could be a whole day event or a series of events

with the following agenda:

Goals and

KPI’s

What do we want to be for whom and with which result?

Workshop to gain insights into existing systems and data

Determining relevant KPI’s – measurable

and realistic


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The outcome of the first step is a documentation report which describes

customers, ambitions, strategy and targets. It will sum up the work shop in

clearly measurable KPI’s which in turn can be used to decide the actual

content of the solution.

7.6.2. Second step – data and analysis

The second step is an analytical process to identify

what knowledge is available in the business today

about the customers. It is intimately connected to the

third step of the AD Communications Wheel. This is an

important step, because it will enable the right

decisions to be made about creating a starting point –

and to be able to ask the relevant questions to get the

answers which is not available. For example about the

knowledge which is already available on our

customers.

Analysing existing data is sometimes already

institutionalised in the business, and can as such be a

Creating Customer Engagement in a world of digital overload

Insights from existing communications channels, rule based marketing

Marketing insights – the move away from traditional advertising to more

direct and personalised communication channels

The Customer as a starting point

Business experience – What do you know about your customers? What

contact point do you have with your customers today?

Working with segmentation and personas

Defining the right solution for your business

Discussion to identify customer goal and targets when dealing with

Active Demand.

Identify long term plans for customer relations and ambitions within AD.

Data and

Analysis

Who are our customers? How do we identify desired and critical behaviour?

Data mining Gap analysis Interactive data sessions Cluster-analysis Key Correlations

Customer insights Set goals for KPIs


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discussion with the data analysis department. Sometimes it takes a determined

effort by data mining specialists to perform it. Either way; it is a very valuable and

important step which will deliver new insights to the business about its customers

The most common way to undertake this session is to get a data dump of the

existing customer data, to perform an analysis on them, and come back with

findings to be discussed in a session including product development, marketing

and strategy people.

The outcome of the second step is a description of existing data, and a

structured set of goals defined on the basis of existing data. This step is

also setting the scene for the actual implementation strategy as it is

uncovering where a customer dialogue could start from.


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7.6.3. Third step – Engagement plan

Step 3 is the strategic output of the two first steps.

Basically it comprises all the knowledge gained from the

first two steps and gives adequate and thought provoking

new ideas on how to drive customer engagement and

active participation in AD.

This step is either a presentation or a report. Obviously a

lot of work will have been done ahead and the recipients

would normally be product development, marketing and

strategy and presumably some of the senior executives.

The report or presentation is basically a strategy

document, which holds the knowledge to conclude on the

budget and which targets from the first two sessions,

should be pursued.

In most cases it is relevant to focus on a smaller amount of

the KPI’s to keep the budget down, but from a

management perspective this session will also provide

knowledge on to the cost/benefit of the different objectives

set by the business and how much effort and money it

would take and cost to achieve.

The output of this step is like a communications business plan with

concrete recommendations for a customer engagement strategy. It is the

foundation for the creation of an actual activity and the white paper to start

building the AD communication programme.

Engagement Plan

What do we communicate to whom, how, at which time and via which channel?

Prioritized idea catalogue Mapping of all relevant touch points Influence on data and systems

Segments

Conversion

Recruitment

Key messages

Dialogue


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7.6.4. Fourth step – concept and design

In contrast to the preceding three strategic steps the fourth step is

much more concrete. In this step the creative output, design and

content will be created – either by external partners or internally.

Basically the fourth step is a conceptual design to translate the

strategy into actual content.

It will normally involve people from marketing and product

development. Also marketing agencies or other marketing

professionals can take part in this session if the business wishes to

include them in the process.

The outcome is a document describing how to approach the

different customer segments, with what messages and via

which channels. It is at the same time giving life and colour to these

messages and describes the technical implementation needed to

implement the ideas. It will also include a full budget.

Concept

and Design

How will it look? How will is sound? How will it feel?

Concept Design Text tonality Detail prototypes

Finished creative elements ready for production and technical

implementation


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7.6.5. Fifth Step - implementation

Fifth step is building the solution. It will involve people selected to

participate in the process; primarily technically skilled IT

professionals, which are rarely internal employees, depending on

the size of the company. To ensure that the dynamics and

ambitions of the strategy are actually built in to the solution this

step will also demand strong project leadership. The process will

as such vary - depending on the wishes from the business. Much

can be done internally and much can be done via out sourcing.

These things have already been described in the fourth step, and

the fifth step is more or less the actual plan being executed.

The outcome of this project is a proto type solution, which is

refined until a common solution is reached, on which the

different parties in the business all can agree. When the

prototype is signed off, the communications engine for

creating an engaged AD customer is ready for launch.

Production and technical

implemen-

tation

Production and implementation of selected ideas and

efforts

Production plan

Complete script

Detailed design

Dialogue flows Setup and

Configuration

Integration

Finished digital and physical elements

Emails, SMS

Rule flows

Full integration

Web interfaces


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7.6.6. Launch

The process leads to a launch. From a communications

perspective though, this is only the beginning. This is

where the strategy meets the customer and the real

testing takes place. It creates a lot of excitement, but to

avoid pit falls, some simple measurements should also

be taken. When the project is launched, this is referring

to the point of the AD Communication Wheel named

“Communications”. In the wheel two more steps follows,

before the wheel turns again: “Measuring” and

“Organizational review”.

Launch

Quality Assurance and status on results and achievements

Stepwise launch Quality assurance Control group benchmarking Evaluations

Documented results


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When launching a complex communication tool, it is advised to do it in small

steps:

1) For most people it may seem trivial, but to ensure the quality and

comprehensive behaviour of the complex customer communication now

beginning it is advisable to do a step by step launch and even create

control groups among internal staff and trusted customers.

2) For the business in itself the launch is the start of getting paid back the

investments done in building the mechanisms to fulfil the strategy. Hence

it is appropriate with an agreed documentation and evaluation process as

part of the launch.

7.6.7. After the launch

As mentioned, the launch is basically only the beginning, and the dynamics of the

setup will require constant attention and focus.


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8. Identifying Customer Journeys

Continuing the cycle of the AD Communications Wheel, utilising the Engagement

Engine described in the previous chapter – or repeating it with new content is

about developing a relationship with the end-customer. Building this relationship

is herein described as Customer journeys.

Customer journeys are a way of describing the different steps different customers

are taking on their way towards a certain goal. In this chapter we will take a

closer look at the different approaches and the different measures which should

be taken in order to meet the expectations of our different customers and thus

enable us to lead them along the way to a more engaging and positive attitude in

relation to Active Demand.

8.1. The development process

The development process as described in chapter 6 shows the phases from

building the strategy to the actual launch of the service. This figure basically

comprises the 6 steps described in the chapter into one model.


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The process is basically the strategic and tactical approach by which a working

AD communications platform in the utility industry can become realized. In this

chapter we will take a look at the paths or customer journeys, by which the digital

communications platform can lead customers to become much more engaged

and active volunteers for AD programmes. Before this, we will briefly sum up the

findings so far and complete the picture of what we are building.

8.2. Building a digital marketing platform

From our research and findings so far, it is quite clear, that a successful Active

Demand programme cannot function properly without a strong strategic

foundation in the corporate strategy of the business implementing it. Hence – as

we have seen in the previous chapter - the first three stages of the development

process are dedicated to building exactly that. After the initial strategic exercises

the next step is to build a database, rules, explore the organization and develop

marketing elements for launch and support.

Building the actual AD communications platform is both an exercise in software,

organization and communication. From the mock-ups made in the consultancy

phase now everything needs to be made to function in reality, and also the

campaigning elements and the launch need to be prepared. It is likely, that a

marketing agency already applied to the utility will create most of these elements

– but it cannot be done as a stand-alone exercise – it might be necessary to force

different actors/departments to play on the same stage.

8.3. What makes it work

The digital engagement engine is best described as working from three main

principles:

Data

Creating an ever growing knowledge database not only helps individualising and

familiarising the content it is also a cornerstone for developing customer

propositions and expanding the communication strategy


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Triggers

Decides when, where and how communication is presented for the end-

customers

Gamification

The concepts stands on the pillars of gamification, a term gaining much

momentum from the 2012 book by Andrzej Marczewski: “Gamification: A Simple

Introduction”. It is about presenting data in a way which is compelling and makes

people want to engage. It is the opposite strategy of telling people what to do -

we are teasing people to get involved, hiding things and promising disclosure

from just a tiny effort.

8.4. From data to insights

The idea behind collecting data, storing and analysing data on a constant basis is

sometimes referred to as “big data”. As this concept might be either unfamiliar or

suffer from becoming a buzz word, we will primarily stick to the concept of

collecting customer data and in doing so shaping a profile, which in the case of

an AD communications programme can be used to start a conversation. Hence;

from the thousands of data representing a normal household’s energy-

consumption we want to add more. In the following chapter, there will be

examples of what is meant by this – but the simplest add-on is a simple bench

mark of consumption with households of similar sizes. A more sophisticated add-

on is adding for example consumptions patterns and suggestions of how

electricity usage during night time might be translated into savings, since it is

often stand-by consumption. This will not happen over night, but analysing data

and asking the right questions enables us to create a dialogue about customer

behaviour which actually triggers end-customers to want even more because

they can see themselves and are met with relevant information – which is only

visible when presented in a larger context. Also it is important to design such

systems of customer engagement in a proper way, i.e. utilising privacy by design

principles, in order to make sure that data are not misused.


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8.5. Triggering the next step

So how can one best utilize customer data to create end-customer engagement?

The idea behind is called: Triggers. So when spotting a trend in analysing

clusters of data – we have got a potential trigger.

A trigger in this respect is a rule, which will be built in to a bigger set of rules. And

when a certain condition occurs – out goes communication addressing this and

that specific situation, i.e. if it is known that the consumer is interested in e.g. a

heat-pump (which might include flexibility options if set-up in the right way), it

makes sense to make the customer aware of such flexibility options and the

potential advantages they might bring to him or her.

The more we know, the more data we collect – the more rules can we build – and

the more adequate will the communication feel to the end-customer.

Behind the theory lies the idea that we as individuals are subconsciously aware

of many of these trends and can easily comprehend them, when they are

presented for us. In this respect the message based on analysing data is just

taking us the little step from being on the edge to actually take the final step…

The idea here being that positive experiences with data sharing (e.g. actual

savings realised) build trust between the parties and provides a “fair” deal on

data, i.e. consumers who share their data for certain purposes are actually

profiting from such sharing.1

8.6. Adequate information – don’t tell me, show me

1 Another practical example for such sharing could be a prosumer who allows the network operator to explicitly

monitor the production of the PV or CHP installed on the premise in very short time intervals. Based on these and

other data a DSO could actually make a projection of overall production in the geographical area while at the same

time providing information to the prosumer if such an installation was behaving irregularly.


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The oldest theory of all communication is – as is well known from personal

behavioural science – we hate to be told, but love to discover.

From the theory of gamification [Marczewski, 2012] comes the add-on, that what

you can discover yourself, will have even greater implications if new discoveries

are recognized and immediately responded to – who does not want to be

applauded for a personal revelation?

8.7. Customer dialogue = customer relations

Many people love listening to themselves. And in these days of ever increasing

numbers of people talking, we are all automatically developing a filter keeping

noise and people only trying to sell us something away from us. The sad fact is,

that many companies have not realised this fact and are still trying to persuade

buyers by simply overdoing their own abilities. The fact is, that we as individuals

now have created a very few limitations to our automated rules of not listening.

The only way to become accepted is to apply the simple rule of life and

persistently keep to that: “if you are worth listening to, people will listen”

Hence, the theory behind the AD communications programme is very simple:

“By always teasing or asking questions and not giving answers people will

start discovering for themselves, thus getting involved. Every bit of

knowledge is in turn turned into a new part of the equation – making the AD

communication evolve with the user.”

From a communications point of view, the utility will have to stay one step ahead

to direct the customer in the direction they want – not two. Always curious,

always wondering but never further away, than being considered an equal

partner in the communications dialogue.


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8.8. Introducing customer journeys

The customer journey explains the development of the relationship with the

customer and it is in this respect a series of communication points in which the

customer and the utility creates an understanding of each other’s needs.

The ADVANCED Customer Journeys are based on the ADVANCED conceptual

model and the materials used in the pilots, and in this chapter we will seek to

identify the consequent differences in nature of the different customer journeys,

when addressed to the four identified segments of the ADVANCED

segmentation.

It should also be noted, that the journeys support the realisation of the phases

‘Drive’, ‘Act’, and ‘Share’ (as the phases ‘Intervene’ and ‘Enable’ do not require

specific marketing and communication) in the conceptual model. See D5.1

(Report describing the validated conceptual models of active consumer

participation in AD) for a complete introduction.

8.8.1. Drive

In the “Drive” phase it is necessary to reach a potential customer while he is not

even aware of either his consumption or the AD offerings at hand.


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First and foremost this is a phase, where the utility primarily wants to attract

attention and get a first point of contact. In this respect it is possible to use more

traditional means such as for example, competitions and mass media to establish

a first touch point.

8.8.2. Act

In the “Act” phase active participation will often require a change in behaviour

and this should be addressed. In terms of segmentation it should, for example,

be thought of how a customer would prefer to sign-up and what securities and

guarantees they need. In this step it is of great importance to support the

customer with the first steps (installation, first use, etc.) and to lead him by the

hand and give instant feedback on every change or interaction. The first steps in

the “Act” phase might be the most delicate, since this is kind of a trial and error

experience for the end customer, where he tests out, whether these services

or/and offerings are of use to him.

8.8.3. Grow & Share

In the final phases a sort relationship and trust will have been established. The

communication is as such not as delicate as in the “Act” phase, since the

customer is now very much aware of the how and when of the AD

communication. On the other hand this phase should be compared to a loyal

subscriber of a newspaper or other service. Most customers will accepts some

flaws, but if the service continues to fail and the experience is becoming less and

less relevant the relationship will easily turn from positive and engaging to loud

criticism and even termination.

The opportunities however in this phase are also great. Since both trust and a

relation has already been established this type of customer will have the

opportunity to influence his own network and he can be an invaluable asset to

grow the AD community when motivated to share experiences in a way he/she is

comfortable with.

8.9. Learning from the Pilot projects

Many of the suggestions, ideas and methodology which is presented in this


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document is related to the communication initiatives which was part of the four

pilot projects; ADDRESS in Spain and France, Enel info+ in Italy and E-DeMa in

Germany. At an overall level the projects started out without looking specifically

at segments, and without addressing them individually – but as importantly all the

projects ended up recognising segments, which can be related to the final

segmentation of the ADVANCED project. This will be firther elaborated in

chapter: 7.11. “Journeys, personas and relations to the pilots”.

Also the Spanish ADDRESS project conducted a segmentation analysis after

they had started their pilot. During this analysis three clusters were identified.The

aim of this cluster analysis was to explore what characteristics a household might

possess that would make their adoption of ADDRESS type technology more

likely.

The three types identified was:

Example of segmentation from the German E-DeMa project based on how Users

(Nutzergruppen) have different approaches to energy management and control.


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Effective time managers: 75% of the participants grouped in this cluster would

consider adopting ADDRESS type technology in the future. They are divided

almost equally between those whose homes are occupied during weekdays and

those whose houses are unoccupied except between 2 and 4 on typical

weekdays. 75% of those participants changed the settings on their EBoxes.

Time constrained doubters: None of the participants grouped in this cluster

would adopt the technology, whilst most of them have irregular time schedules,

and 30% of them have houses that are unoccupied on weekdays. However, 50%

of those participants changed the settings on the EBoxes.

Laid back adapters: All the participants in this group would accept the

technology, and whilst the way their homes are occupied varies, only 20% of

them have changed the settings on their EBox.

The ‘Effective time managers’ may have found the technology intrusive, however,

their ability to be home (either throughout the day or in the afternoon) and having

changed the settings, they were able to accept the technology. It appears that the

‘Time-constrained’ doubters, due to other commitments and demands on their

time, appeared less likely to want to engage with the technology or consider

adopting it in the future. The final grouping, the ‘Laid-back adapters’, do not find

the technology intrusive, however, they would consider the technology. This

group is less likely to be constrained by an irregular schedule and have found the

technology not intrusive on their day-to-day life.

[Source: D5.2 - Key societal factors influencing the adoption of the ADDRESS

Smart Grids architecture, ADDRESS project, May 2013]

It is also clear from the pilots, that establishing a relation with the end-customer

and focusing on establishing trust and ensure education of users are some of the

most valuable elements in securing success of an AD roll out.

As an example the ADDRESS project in France went door to door to involve

customers on Houat and Hoëdic islands, they did demonstration of the

equipment in rented houses and established contact with a teacher of a


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secondary school – to make a visit of the pupils to make information spread on

the islands. Also technical assistance was offered to all participants together with

website, brochures and a hotline. It is not possible to make such a close attention

to participants in a full roll out, but it shows the level of engagement which is

needed to make people participate, when you start from a point, where nobody

has any knowledge fom before.

One of the important elements from the Enel info+ communication in Italy was the

way education and building a relationship with the customer was used.

Source: ADDRESS pilot in France - communication material


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Not only did the information materials show advanced user interfaces on energy

consumption, but even more importantly; the information from the active users was

used to communicate directly and start a dialogue about the consumption via a report.

This is an important learning which is being used also in this final report Customer

Commuinications, since it showed, that by doing this it is much simpler to keep the

attention and engagement of the end-customer.

Source: Enel info+ - communication material


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8.10. Customer journeys by Persona

As described in chapter 5 each Persona has its own characteristics; explaining

the differences in their journeys. Customer Journeys must in this respect be

understood as the individual experience from customer to customer of moving

from being unaware about AD to becoming a sharing part of an AD community.

Source: Enel info+ - Consumption report


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The differences in the journeys are also related to the differences in the starting

point of different personas but also in the communication related to what

motivates the individual Persona on the path to becoming a participating and

engaged customer in an AD programme.

In this introduction we will start with a small recap of the four Personas and their

characteristics before moving into the discussion of how they can be motivated

through different means of communications.

Daniel - Active

Strong environmental views; concern over energy costs; takes action in reducing

energy consumption

Maria – Moderate

Some environmental views; some concern with energy costs; takes action in

reducing energy consumption

Susanna – Indifferent

Some environmental views; less concerned with costs; less interested in taking

action to reduce consumption

Simon – Oppositional

Anti-environmental views; not concerned with costs; not interested in reducing

consumption or in technology.


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8.10.1. Getting started

To take a first step as a customer - you need to have an incentive. For attracting

the attention of the four different Personas, there will be different ways of

communication – and most probably different media in which to get their

attention. Also they will need different carrots to make them take their first step.

A common denominator to create a hook for the first communications to start

could be a reward programme or prize draw. It can be described in three easy

steps:

1. Get rewarded for signing up

2. Receive communication in accordance with whom you are

3. Start the Customer Journey


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8.10.2. After the first sign up

In the first contact through the generic approach a minimum of data should be

collected about the individual. For example: Age of the house, Household size,

Energy consumption and costs, Income level, and the satisfaction level with

energy products and services. The balance is to get enough information to keep

the communication being relevant and still not annoying the customer, to make

him step back from the programme. Basically this communication could reach out

to both existing and potential customers.

From every bit of information given, the customer should experience a sort of

feedback. For example the above mentioned data, is enough to provide the

customer with a benchmark of energy consumption to similar households.

8.11. Journeys, personas and relations to the

pilots

Every Persona will then experience different Journeys in becoming more

engaged in an AD programme and it is possible to identify some overall

characteristics of the journeys related to each Persona. For crafting these

Customer Journeys, the communication material and practices of the four pilots

have served as inspiration and concrete input. Examples of these are given

below, beneath the different Customer Journeys themselves. (Note: These

matrixes can all be found in full format, which might be more readable in the

Appendix A)

Daniel:


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Input from the pilots for Daniel: E-DeMa

The E-DeMa pilot proposed a very clear distinction between different

functionalities and usability aspects of AD, for the research they conducted

among participants. They found, for instance, that a large percentage (66%) used

the (personal) display and found it had added value for the whole ‘AD

experience’, more than the pilot ‘Marketplace’ (an online platform about the pilot

as a whole). This served as inspiration for the focus on personal statistics in

Daniel’s journey. Furthermore, a significant positive relationship was measured

between participants that have affinity with technology and/or focus on saving on

the one hand, and (perceived) usefulness of the display on the other hand, which

implies an even greater role for a display with interesting items to engage Daniel,

also focused on savings and quite technology savvy, more with AD.


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Source: E-DeMa_IKT_GWI_Fraunhofer_Chartbook_final.pdf

Connection between attitude (Einstellung) and how features are valued

(Bewertung)

Maria:


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Input from the pilots for Maria: ADDRESS

The target group for ADDRESS seems comparable to Maria, for instance

because of the geographic overlap (Maria is a Persona that can largely be found

in Spain). For ‘driving’ AD uptake and motivating people to actually join,

ADDRESS has given ‘home visits’ a prominent part of their campaign. In fact,

personal contact and support has been quite fundamental in the ADDRESS

communication strategy with participants, resulting in the same suggestions in

Maria’s journey. Also, the very clear step-by-step information seems as a good

way to go for engaging Maria.

The sequence of contacts with the participants can be summarised as followed:

1) Recruitment call 2) Second call for confirmation 3) Home visit to sign the

contract and get information from the house 4) Home visit for installation and

setting up the system 5) Pre-questionnaire (all participants) 6) Interview (30

participants) + Diary (17 participants) 7) Final questionnaire (all participants) 8)

Deinstallation.

[… ] During the physical visit to get the contract signed participant more

information about the project was delivered and questions were answered. On

the installation day more questions were answered and the equipment manuals

were given to the participants as well. Moreover, participant had at their disposal

different channel to received support (i.e. telephone number, email and physical

helpdesk)


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Source: ADDRESS pilot communication material

Susanna:

Input from the pilots for Susanna: Enel

Enel put a lot of effort into reaching potential participants by communicating

about the pilot in a wide array of places that fit into people’s daily life. As


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Susanna is best reached in situations that fit hers, Enel’s approach served as

logical input for her journey. Both by being present physically on specific suitable

locations, or by reaching her through setting where a lot of her peers are, such as

a campus. The visuals used by Enel, emphasise this connection to someone’s

daily, too and are very concise and clear.

Source: Enel pilot communication material


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Simon:

Input from the pilots for Simon: ADDRESS

ADDRESS has given a lot of attention to creating awareness through media and

‘channels’ that are familiar and trusted by potential participants, such as local

newspapers, the municipality and local schools. As Simon needs reassuring

cues, such as parties he knows or peers that are already participants of AD

programs, this approach by ADDRESS has served as input for Simon’s Customer

Journey, as well. Furthermore, the local open information sessions held by

ADDRESS help to create an atmosphere of transparency, trust and partnership

instead of selling, which is sure to turn off Simon.


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Source: ADDRESS pilot communication material

These four different ways of leading different customers towards the same goal is

the key to keep the process unfolding. In the last chapter we will take a deeper

look into some concrete examples of the journeys.


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9. Examples of applied communication

In this chapter, actionable information and practical examples are provided for

applying the above described communications umbrella and strategies to real-life

practice. Examples of segment variation in communication

In order to make the AD Personas and their respective Journeys come alive,

three distinct and descriptive examples are given here. These concepts or mock-

ups serve to explore the possibilities and inspire for actual campaigns,

demonstrating variations in tone-of-voice and the importance of delicacy as

elaborated upon earlier. They are just examples; logically, actual communication

means and messages should be preceded by a solid strategic approach as

described earlier.

9.1.1. Making Daniel an AD advocate

Compared to the other Personas, Daniel (Active Persona) will be easiest to reach

and willing to adopt AD. A greater challenge for Daniel is thus to make him, once

a customer, a real AD advocate and even motivating others (e.g. other

Personas) around him to also participate. The example below thus focuses on

Daniel’s Customer Journey phase: ‘Grow & Share’.

Following from the fact that Daniel prefers to use digital channels as a customer,

the example below shows how Daniel’s needs for insight and control in his

household energy figures are addressed. He can check his performance, see

how he compares to others, and share his good results with friends. Gamification

is brought in as a tool to educate and empower him more, and also to involve his

children. Lastly, by giving him the chance to give feedback on possible

improvements, he will feel even more engaged.

The important difference between this example and the various numbers of

solutions out there, which gives access to consumption data in various formats, is

the way data is treated as a way of communication and interaction. Data is not


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only shown but is presented in accordance with other data: As benchmarks, as

suggestions, as controls, as proposals, as advice and in a multiple of other ways,

which creates value for Daniel and his fellow Personas.


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9.1.2. Making Maria aware and interested

Maria (Moderate Persona) is a segment that is already in some way concerned or

active regarding energy behaviour and/or costs. With a certain tone-of-voice, she

can represent a viable segment for AD.

In the example below, Maria has participated in a campaigning activity for a prize

as described in chapter 6. The reward program asks her for a very few details on

household size and yearly consumption.

To test and prove the communication options, this example is then based on a

profile which:

1) spends below average on energy costs

2) Is not (yet) an AD customer

3) Has a moderate interest in energy savings

The goal of the e-mail below is to introduce Maria to Active Demand as a service

(Drive); build trust; build a profile of this segment (expand knowledge) and

prepare her for the next step (Act).


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9.1.3. Reaching out to Susanna

For Susanna (Indifferent Persona), it is important to align with her main concerns

in life in order to even have her become aware of the possibilities of AD. One way

she can be reached, for instance, is thus by relating to her main life events. In the

example below, information on Active Demand is given at an information market

on a new building project for people first entering the housing market.


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9.2. Regional variation

The Personas are for a large part based on the ADVANCED surveys executed by

TNS. Although the names chosen for the Persona do reveal a slight connection

to the region in which their dominance is greatest, the regional differences are

still important to clarify to ensure effectivity of AD campaigns. In the following, the

most distinctive differences and their effect on campaigns are highlighted (for

detailed information, please refer to D 4.2 (Report describing the AD perception

in Europe differentiating between consumers segments)).

9.2.1. Regional variation in figures

Broadly, the TNS surveys turned out that the degree of involvement and activity

in saving energy moves along a diminishing path from Southern Europe to

Northern Europe.


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Interestingly, the pattern of regional variation continues when it comes to the

technological advancements in regards to control over the energy management:

as the graphs below demonstrate, in the Southern regions people have more

control over their heating system and are more open to monitoring by the energy

company. (Overall though, people want to control their appliances themselves,

rather than fully handing over control to the energy company).


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There is an interesting deviance from the ‘South to North’ pattern explained

above here, though, and that is that in Spain people are (much) less satisfied

with their energy company than in other countries and especially compared to a

Nordic country such as Sweden.


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The findings above on the degree of involvement and activity in saving energy,

are summarised by TNS in the following way:

Source: TNS - Active (green), moderate (yellow), indifferent (blue) and

oppositional (red) segments by country in the survey


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Not surprisingly, the Active people are dominant in Italy and Spain and the

Moderates in France and Germany. The Indifferent segment makes up a large

part of the studied population in the Netherlands and the United Kingdom,

whereas even more northerly, in Sweden, the Oppositional segment is most

dominant. In other words, farther away from the Mediterranean, people tend to

show more ‘anti-green’ sentiments and (far) less concern for the environment and

energy costs.

9.2.2. Working with regional variation

For some, all the above might seem counterintuitive. Have the Nordics not

always been frontrunners when it comes to green politics and giving priority to

sustainability? It might be explained by the fact that the Southern parts are simply

catching up and the Nordics are slowing down. Another explanation can also be

that in the Nordics environmentally conscious behaviour has so much become a

fact of life, that it is now actually a 'low interest' topic. But, as the data turns out,

there might also be other dynamics at play, such as reluctance towards AD

requirements such as monitoring and/or control by the energy company; which

differences between countries may here for instance be culturally shaped. The

uptake on energy saving in Southern countries, may also be explained by

economical drivers, which motivates people to actively seek ways for saving

costs (“it is possible that the amount spent on electricity is related to the

perceived importance of reducing energy consumption”), although that probably

is only one side of the story [reference from D4.2 (Report describing the AD

perception in Europe differentiating between consumers segments)].

These variations in behaviours and attitudes between different countries is

challenge for AD initiatives that are pan-European. It becomes clear that

communication strategies should not only take into regard different drivers and

barriers (explained in the Personas) but also these regional and cultural

differences. Here it is important to note again, however, that certain regional

aspects are, however implicitly, incorporated in the Persona’s, as well. For

instance, the indifference of Susanna, who in name and appearance seems to be

of Northern European origin, resembles the level of indifference in the Nordic


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countries.

As described already by TNS in D4.2: “…improving satisfaction and enhancing

the image or providers will be a critical first step in the Spanish market, but less

important in the Netherlands, where more effort can be directed in instilling a

need for behaviour change”. And in Sweden, the scepticism towards AD as a

means for more control by the energy company should at some point probably be

addressed. Thus, when creating a communication strategy or just one piece of

material, a local ‘check’ on how it is received, is a good step before finalising.


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10. Revisions

10.1. Revision history

Version Date Author Notes

0.1 1/10/2014 Thomas

Mikkelsen

First draft

0.2 10/10/2014 Stella Di

Carlo/Oliver

Franz

Comments

0.3 20/10/2014 Thomas

Mikkelsen

Document revision

0.4 30/10/2014 PM/TM Comments

0.6 15/11/2014 Thomas

Mikkelsen

Document revision

1.0 30/11/2014 PC/QM Final check and approval


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11. Conclusions

The ADVANCED Customer Communications Umbrella for residential customers

is one of the most actionable outcomes of the whole ADVANCED project. As

such the knowledge gained through the pilot projects, analysis and interviews

throughout the project period is summed up in the parts of this delivery.

D5.4 is based on an analysis of existing communications material from the pilot

and the research from the surveys established in the project, and on this basis is

provided a set of tools and a way of working with communication alongside the

roll out of Active Demand which seems promising for the future.

To secure success with the roll out of future AD programs it is shown, that

engaging customers and establishing relations is crucial. The trust and the

relation in between customers and utilities is a necessary prerequisite for rolling

out AD.

To ensure the building of trust and establishing a relationship a step by step

approach is needed in the communication. The conclusion of this chapter is, that

this is possible – especially since utilities in the relatively short period since the

liberalization of the energy markets in Europe has been able to relate to changes

in their environment very quickly. With new digital ways of communication at

hand, the transformation in communication needed in the industry is mostly about

making the decision as to when and where.

In this respect it seems most possible, that the potential flexibility and the energy

savings of future energy consumers can be dramatically changed. This however

demands a change not only in the customers mind, but also in the approach of

the utility sector towards their customers and towards communication over all.

The most important findings can be summed up in the following 8 points:

1) A new methodology – the AD Communication wheel – has been created.

It emphasizes the fact that communication about AD programmes of the


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future needs to be a part of the business development and take its

starting point in actual business goals.

2) From analysing pre-existing communications in the utility sector – not

necessarily related to AD activities, but in a broader sense focusing on the

messages sent and perceived from all communication coming from the

industry - it has been observed, that communication until now has been

focusing on mass market and above the line communication channels and

content. When moving into AD, this needs to change to become

personalised and relevant for the individual customer.

3) At the same time as the energy market has been liberalized the whole

world of communication has seen a dramatic change from traditional

mass media campaigns to digital and targeted communication.

4) Findings from surveys in the ADVANCED project have been turned into

actionable goals and segments, which enables a much more targeted

communication approach.

5) On the basis of segmentation, the project has been able to establish a

digital Engagement engine, which provides a methodology to ensure the

roll out of AD programs in the future.

6) The pilot projects from the participating utilities has provided unique

insights into which communication methods that works, and which does

not. This has been a major contribution to developing the methodology

and the examples of communications for driving AD participation.

7) Most importantly, the finding from the ADVANCED project does not only

require change within the minds of the customers but as important

internally in the organizations of the utility industry.

8) The methodology of personal customer communications opens up also

new possibilities and business options for the industry


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12. External documents

[Accenture, 2012a] - Actionable Insights for the New Energy Consumer;

Accenture end-consumer observatory 2012

[Accenture, 2012b] - The New Energy Consumer Balancing Strategic and

Operational. Imperatives Reference guide 2.0

[Alexandrov et al, 2013] – Alexandrov, A., Lilly, B. and Babakus, E., 2013. The

effects of social- and self-motives on the intentions to share positive and negative

word of mouth. Journal of the Academy of Marketing Science, 41:531-546

[Berger and Schwartz, 2011] – Berger, J., and Schwartz, E.M., 2011. What drives

immediate and ongoing Word of Mouth? Journal of Marketing Research, Vol.

XLVIII, 869-880

[D5.2] - Key societal factors influencing the adoption of the ADDRESS smart

grids architecture. Report on the results of WP5 verified by the experience

obtained in the field tests – ADDRESS consortium

[Fleissner, Gölz, 2013], E-DeMa_IKT_GWI_Fraunhofer_Chartbook_final.pdf,

Report on ERGEBNISSE E-DEMA IKT-GW I, Kundenakzeptanz-Forschung

[Langley et al., 2012] – Langley, D.J., Bijmolt, T.H.A., Ortt, J.R., and Pals, N.,

2012. Determinants of social contagion during new product adoption. Journal of

Product Innovation Management, 29(4):623-638

[Kotler et al., 2007] Kotler, Philip and Andreasen, A.R.: Strategic Marketing for

Nonprofit Organizations, Addison Wesley, 2007)

[Entwistle et al., 2009] Entwistle, Johanne Mose (ed.): Minimum Configuration of

a Smart Home, Aarhus School of Engineering and Alexandra Institute; 2009

[Lewis et al., 2002] Lewis, Philip E. (ed.): Energyforum Global Report

On Deregulated Electricity Marketing, Energyforum International AB; 2002


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[Wellendorf and Larsen, 2009] Larsen, Astrid Klarskov and Wellendorf, Kristine

Schaumann: Branding In a Climate of Change, CPH Business School; 2009

[Ernst & Young, 2013] Postance, Richard (Author director): In utilities we trust?

How can energy providers win back the trust of their customers?; Ernst & Young

2013

[Jenkinson, 1994] Jenkinson , A .: ‘Beyond segmentation’ , Journal of Targeting,

Measurement and Analysis for Marketing , Vol. 3 , No. 1 , pp. 60 – 72

[Marczewski, 2012] Marczewski, Andrzej “Gamification: A Simple Introduction”,

April 2012

Web resources:

“Green Stimulus Chart”: http://www.wri.org/resources/charts-graphs/green-

stimulus-spending-country

“Barack Obama DNC speech” http://www.opposingviews.com/i/politics/2012-

election/transcript-barack-obamas-dnc-speech

[Sungard 2014] “Sunguard Financial Systems on European Electricity liberalization”:

http://financialsystems.sungard.com/solutions/energy-trading-operations/Industry-

Topics/emerging-regulation

http://www.wri.org/resources/charts-graphs/green-stimulus-spending-country

http://www.wri.org/resources/charts-graphs/green-stimulus-spending-country

http://www.opposingviews.com/i/politics/2012-election/transcript-barack-obamas-dnc-speech

http://www.opposingviews.com/i/politics/2012-election/transcript-barack-obamas-dnc-speech

13. Appendix A: Figures and illustrations in full format


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Customer Journey for Active Segment – Persona: Daniel


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Customer Journey for Moderate Segment – Persona: Maria


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Customer Journey for Indifferent Segment – Persona: Susanna


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Customer Journey for Oppositional Segment – Persona: Simon

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