IBM unveiled findings from its “2011 IBM Global Utility
Consumer Survey,” which revealed that many consumers around the globe do
not understand the basic unit of electricity pricing and other energy concepts
used by energy providers. The company also identified a list of crucial
behavioral patterns that have the potential to impact how providers communicate
and drive motivation amongst consumers.
IBM surveyed more than 10,000 people across 15 countries to
explore the wants and needs of energy consumers worldwide. The findings expose
a major gap between what consumers currently know and what they need to know to
reduce energy consumption and benefit from smarter energy initiatives. Over 30%
of those polled, for example, have never heard of the term “dollar per
kwh” or the equivalent currency, and more than 60% are unaware of smart
grids or smart meters.
The survey also revealed that knowledge is linked closely to
people’s willingness to embrace change and their approval of local energy
initiatives. 61% percent of people with a strong knowledge of energy technology
and pricing terms viewed smart meters and smart grid deployment plans positively,
compared to only 43% of those with minimal knowledge.
“There have been major strides with new energy saving
technologies, new programs, and incentives, but in many cases the market is
seeing more confusion amongst consumers than expected,” says Michael
Valocchi, Vice President, Global Energy & Utilities Industry Leader for IBM
Global Business Services. “This year’s survey points to a need and an
opportunity to go back to basics and educate consumers by using terms that they
understand, behavioral triggers and channels they already use. People want to
conserve energy; we just need to get better at showing them how.”
Shifting consumers perceptions and influences
The perceptions, expectations, and influences of the energy consumer
have changed over the last four years. Despite efforts by utilities and others
in the industry to create consumer-friendly conservation tools, many consumers
still do not have the information or the proper incentives to make better
energy choices.
Some of the key findings from the 2011 IBM Global Utility
Consumer Survey find additional relevance when combined with related IBM
efforts. Last year, IBM industry experts along with academic experts in
consumer decision-making identified several key factors related to consumer
usage of electricity. By examining the energy usage through the lens of
behavioral economics, utilities have better insight into the thoughts of
consumers, their motivations, misconceptions and triggers for change. These
behavioral factors include:
Alternative Motivation: Financial incentives are not the
only factors that encourage consumers to decrease their energy consumption. In
fact, based on the consumer survey, money no longer dominates the
decision-making process compared to years prior. Instead, younger consumers
today are evaluating choices based on the environment while those over 55 noted
the health of their national economy as a key motivator for behavioral change.
The first step towards activating behavioral change is by acknowledging that
consumers are not simply triggered by monetary drivers, but also motivated by
benefits such as comfort, sustainability, and confidence in the nation’s
economic prospects when making decisions about energy use.
Information Availability: How a choice is framed and presented
can make a big difference. For instance, presenting too many options can at
times be detrimental. While in theory more options should always be a plus, the
resulting complexity can ultimately demotivate consumers. This finding is
consistent with the IBM survey results which showed that consumers under 25 are
prone to follow the lead of others rather than sort through the options on
their own, being two and one-half times more likely to rely on their personal
networks as a primary source for information than those 55 or older. By
presenting the right balance of choices, utilities can help reduce the need for
complex, time-consuming decisions that can hinder a consumer’s desire to make
independent choices about their energy consumption.
Social Drivers: Another approach for
greater adaption of smarter energy is to tap into people’s inherent social
nature. People rely on social proof, or the behavior of
others, to determine the right ways to act in many situations. This social
action trigger is behind the introduction of new programs such as consumer
portals which allow consumers to see and compare their usage to those of their
neighbors. For energy providers such as Enemalta Corporation and Water Services
Corporation in Malta,
the portal is instrumental in encouraging consumer adoption and lowering
overall usage. This approach demonstrates that social comparisons are frequently
a more powerful lever of persuasion.
By understanding the human psychology of choice and decision
making, the industry can identify the greatest barriers inhibiting change,
discover opportunities for improvement; adopt new methods of communication and
design programs that are in line with consumer demands.
