Ten years ago, there wasn’t an incentive for utilities to run rewards programs. Today, they make a lot of sense.There’s a good reason rewards programs are popular. They benefit folks on both sides of the transaction. Customers get perks for small behavior changes, and retailers see a bump in metrics like satisfaction and loyalty. Ten years ago, there wasn’t much of an incentive for utilities to run rewards programs. But today, when the entire industry is looking for ways to make the grid the most compelling place to buy electricity, they suddenly make a lot of sense. The benefits are clear for utilities in competitive markets, or those that are taking steps to combat grid defection. Points and rewards make customers happier. People who participate are more likely to feel like valued customers, and that their utilities are value providers. If you’re a regulated utility, you’re increasingly focused on those metrics, too. You’re also thinking about ways to motivate customers to take high-value actions — to save energy, to enroll in programs, to switch to paperless billing, to use self-service channels that are less expensive to operate, and so on. Points and rewards can give customers the incentives to take action. Just ask Tom Baron, a Senior Program Manager at National Grid: "There's an element of gamification, which we see in a lot of industries," Tom points out in the video. "It brings some fun to what we're doing." "It also provides an incentive for people to act. We want them to take certain energy-saving tips at home, we want them to participate in a rebate program. Why not incent them with some Points and Rewards?" So that’s what National Grid did. In 2013, Tom and his team launched a Points and Rewards program on top of Opower’s software platform. Customers signed up on the National Grid web portal, started earning points for taking important actions, and redeemed those points for gift cards and charitable donations. At first, Tom’s team used the program to drive energy efficiency behaviors. “But just recently,” he adds, “we piloted something in Rhode Island, where we're advancing another utility agenda. We offered Points and Rewards for folks to convert from a paper bill to an ebill." "The response was fantastic. We had several thousand [signups] in 11 days." All told, Points and Rewards customers were 9x more likely to sign into National Grid's web portal than other customers.
Points and Rewards are cost-effective. A $2.00 reward for converting to eBills saves a utility $9.10 in annual costs.
As we wrote last week, digital engagement — particularly around billing — isn’t just a nice-to-have anymore. For a lot of utilities, it’s a strategic imperative. Customers who engage online are significantly more likely to say that they trust their utilities (+10%), that they’re satisfied with their service (+14%), that they’d recommend their provider (+29%), and that they’d participate in an energy management program (+21%). Not only that, but they’re less expensive to serve. Offering customers a $2.00 reward for converting to electronic billing, for example, saves their utility $9.10 in costs over the course of a year. "What really moved me is that we saw a 10 percent increase in satisfaction on the idea of value,” Tom says. “So people participating in Points and Rewards feel that National Grid values them as a customer, which is very important to us, and they feel that National Grid brings them value.”
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