Crowd Control: Utilities and Social Media
No matter what your industry, social media is the Great Unknown. Even innovative businesses, with full teams devoted to managing content for platforms like Facebook, Twitter, and YouTube, struggle to mine and assess the content that emerges from said platforms. Still, social media is a proven barometer of consumer sentiment. Any company concerned about its reputation should be concerned about what users say online.

To illustrate, imagine the following scenario: a rate increase at a utilities company ignites angry reactions, which get posted online in a matter of hours. The response catches the attention of traditional media, whose coverage foments additional vitriol. The ultimate result is a plunge in satisfaction ratings. Whereas disappointed customers might, in the past, have written letters or grumbled privately about an increase in costs, their reactions are now a part of the public discourse –and a damaging one, at that.

This story reflects the experiences of many companies, but it can be avoided through the use of social media monitoring. With an eye on social networks, a provider can quickly latch onto and address any indication that users are displeased with its policies. Some negative sentiment may be altogether neutralized, and any unavoidable backlash can be effectively managed. The bottom line is that listening to customers on social networks is nearly as important as using social networks to talk to them. By establishing dialogue through social media, companies effectively create a feedback loop that supports reputation-management and customer satisfaction as well as marketing objectives.

Connecting to Customers
Two-way communication is valuable to utilities companies in more ways than one. A feedback loop between providers and customers is the principle behind Smart Grid, which uses a network of sensing, measurement and control devices to enable both providers and users to monitor energy consumption. Customers linked to a Smart Grid can use their Smart Meter to track how they personally use energy, when and at what rate, and they can then self-regulate their energy use to maximize budget efficiency. In theory, satisfaction levels rise as personal energy costs drop, and providers see less strain on the grid as demand evens out.

To introduce customers to the concept of Smart Grid, to track its efficacy post-implementation, or to better understand energy consumption habits writ large, utilities providers can use an online research community. Online communities are a cost-effective way to combine quantitative and qualitative insight and engage users in dialogue. Since providers can reach out and receive instant feedback on any number or variety of topics, they have a constant source of insight to support their strategic approaches to customer service and operations. This insight is crucial as utilities navigate the introduction of a new technology or any other concept (including changes in rates or service availability). They can suss out how their users will respond and adjust their tactics accordingly.

Conclusions
No matter how tremendous a technological development or how vital a change in the business model, the best companies will attend to customer response before and after they initiate a change. Before they leap to introduce a concept, providers will conduct qualitative and quantitative research to gauge how it will be received and refine their strategy. After they implement a well-researched plan, those same providers will keep an eye out for any signs of discontent.

Social media monitoring is the latest innovation in market research designed to help companies monitor and address responses to their actions. Online communities offer a way to “look before leaping,” refine ideas prior to their introduction, and minimize the risk of negative reactions. Ways of reaching out and conveying information to customers have been in place for a long time. These research tools offer an opportunity to receive feedback from customers and thereby create services and make changes more attuned to their desires. By staying connected to their customers, businesses can improve satisfaction and performance –and thereby stay ahead of the game, whether that means coping with change or increasing competition. In line with our corporate mission, FGI Research is on the forefront of developing research methods to help companies do both.

As companies worldwide endeavor to rebrand themselves as “environmentally friendly,” and stories about “going green” pervade the news, the cultural emphasis on sustainable living is becoming indisputable. Wal-Mart has announced an initiative to make its outlets “greener” by 2015. Other companies are capitalizing on the green trend by using clean energy sources in their production processes, creating eco-friendly products (like Clorox GreenWorks), or incorporating recycled materials in their designs. In a new study, FGI Research focuses on the question of saving energy from the consumer’s perspective. In it, we find that 9 in 10 respondents think reducing home energy consumption is “somewhat” or “very important.”

“If you take steps to reduce your electricity usage, for what reasons do you do so?”

Using FGI’s online panel, SmartPanel^TM, we asked U.S. consumers whether they took conscious steps to reduce energy consumption and, if so, what their motivations were. The vast majority (93%) of those who responded said they took steps to save energy at home. As their impetus, many cited concerns about the environment and the economy. FGI Research delved deeper, asking about the ways that respondents saved energy and how they felt about technologies like the smart grid, which increase efficiency. Are customers willing to give up control over some aspects of energy consumption to “go green” and “save green”?

Consumers Take Action to Save Energy
One of the most widely-recognized ways of saving energy is by purchasing appliances that bear the EnergyStar label. This label means the product meets EPA efficiency standards. Other ways of saving energy include turning off lights, using appliances at certain times, investing in home improvements, and using energy-conscious climate control. The FGI Research study asked which of these steps respondents took.

The most common way consumers save energy is by turning off lights upon leaving a room (95%), followed by using compact fluorescent bulbs (88%). Consumers also cut energy costs by keeping the thermostat at a reasonable temperature (88%) and wearing seasonable clothing to reduce the need for air conditioning or heating (78%). About three-fourths (74%) of those surveyed unplugged appliances and chargers when not using them. Slightly fewer people reported using appliances during off-peak hours (69%) and investing in home improvements to improve insulation (63%).

Smart Grid: the Provider Steps In
These energy-saving tactics are all consumer-driven. But the advent of smart-grid technology creates the opportunity to reduce energy expenses and consumption even more. Smart grid achieves this through collaboration among manufacturers, consumers and electric utilties. Specifically, energy providers have greater control over how and when power is used. The smart grid relies on two-way digital communication to monitor all electricity-use within a network. It may or may not incorporate smart meters or other devices that let customers see how much energy they use in their own homes.

Customers receive incentives, such as paying lower rates, when they take steps to save energy like operating appliances at “off-peak” (lower-demand) hours –for instance, running the dishwasher late at night. Some smart grids allow a provider to link appliances to a network and turn them on or off remotely to suit these hours. Although this option takes control out of the user’s hands, it reduces the utilities bill at the end of the month and offers benefits to the system overall. These benefits include more accurate and timely monitoring, quicker service response, reduced risk of black- and brownouts, reduced pollution, and reduced need for additional power plants. Boulder, Colorado is an example of a smart-grid-enabled city (the first “Smart City”) already reaping such benefits.

Consumers Attracted to Economic, Environmental Pluses
FGI Research asked residential customers whether they knew what a smart grid was, whether they were attached to one or would be open to trying it. An overwhelming majority (96%) said they were either using one already or would use one, given the option. Nine out of ten respondents said the smart grid would save them money. Eight out of ten said the technology would save electricity.  Roughly two-fifths (43%) said that ceding some control to their utilities provider would actually reduce stress, since it would save them money and energy with minimal effort on their part.

Smart Grids or Not-So-Smart Grids?
Notwithstanding overwhelming support for the smart grid’s benefits, many worry about the disadvantages. 62% of consumers say they hesitate to have someone else decide when they can or cannot run appliances. Two out of five (41%) were particularly worried about having a loud appliance turn on in the middle of the night. About half (48%) expressed anxiety about technical difficulties or glitches in the system. Nevertheless, benefits of the smart grid appeared to outweigh the pitfalls. A mere 4% of respondents indicated they would not be open to trying the technology.

“In your opinion, which of the following are disadvantages of Smart Grid/Smart Meter?”

Actionable Insights
The results of this FGI Research study illuminate several clear insights. First, customers want to save energy for economic as well as environmental reasons. Second, many are already taking individual steps to do so. Finally, most favor the idea of a smart grid, if they are not already attached to one, even if some see downsides to implementing the technology. Energy providers can benefit from this information in several ways, if they have the information and the opportunity to act.

• Providers can field an awareness/usage study to put in perspective their customers’ level of understanding of smart grids and, where necessary, take steps to educate them. Adequate education may lessen customers’ concerns about problems they see with grid updates.
• Providers should undergo research to find out how their customers feel about smart grids and smart meters. Surveys can indicate the overall level of support for network updates, while online focus groups and communities can bring up subjective concerns of individual customers. New concepts and price points can be accurately evaluated.
• As always, providers should engage in ongoing research to monitor customer satisfaction and respond with actions that make sense from a customer-service standpoint.

Next Steps You Can Take

• Learn more about the results of this study: complimentary access to the data in this report, including cross-tabulated results, is available upon request from FGI Research.
• Contact FGI Research: click here or call us at (919) 929-7759
• Explore FGI Research’s market research solutions, including custom panels, full service research, and our online sample (SmartPanel).
• Join FGI Research’s online panel to participate in future studies.

Survey Methods
Respondents: 131
Date of Survey: May 25-June 1, 2010
Sample Source: FGI SmartPanel

This nationally-representative sample consists of adults aged 18 and up and is balanced to the US population using recent census data. One can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

In the last five years, custom panels have brought tremendous benefits to market research teams across multiple industries. More recently, online communities have started to replace traditional qualitative methods like in-person focus groups. At FGI Research, we help many of the country’s leading utilities draw maximum benefit from custom panels and online communities alike. Every utility client sees promising results as it adopts these up-and-coming market research methods. Below is a summary of key benefits that utilities are generating:

#1 –Savings: Market research is a major expense for electric and gas utilities. Their core studies often include customer satisfaction trackers, concept and ad testing, and saturation studies. Altogether, the cost for these studies can eclipse a million dollars or more per year. Properly implemented, custom panels and online communities can help a utility’s MR department shave off 20-40% of these research costs. Even when trackers require multi-modal designs, the cost savings from using custom panels and online data-collection are huge.

#2 –Quality: Utilities dramatically improve the quality of their market research when they conduct studies from their own custom panel, for several reasons. First, a custom panel with FGI provides a private source of sample that we recruit from the utility’s customer file and use exclusively for their research. Second, FGI Research stresses the importance of appending in-house data such as segmentation scores and customer usage information to a utility’s custom online panel. Commercial online sample sources simply cannot match the depth, quality and reliability of data that such a well-constructed and -managed panel provides. Finally, a utility’s online community (especially when it incorporates both qualitative and quantitative elements) yields data and insights that go far beyond the results generated by traditional focus groups.

#3 –Speed and Flexibility: Custom panels and online communities combine to form a ready and reliable platform for any number of real-time market research applications. For utilities, this means that studies launch quickly and field efficiently. In most cases, FGI’s utility clients can conduct multiple studies in the time it used to take to complete just one. They can much more rapidly determine the feasibility of a proposed study and design an approach that will meet their analytical, budget and timing requirements.

Custom panels and online communities help gas and electric utilities generate better, faster and more cost-effective market research for their internal clients, which in turn helps them satisfy those clients more effectively. Even better, new insights from innovative research methods fuel superior decision-making across the board, so a utility can see gains in its overall performance.

David Wilson
CEO
FGI Research