Renewable loyalty: How can energy providers motivate customers to be more loyal and more sustainable?
Renewable Energy & Renewable Loyalty Programs – Time for Change
By Ko de Ruyter, Debbie Keeling and David Cox
Energy companies operate in a hypercompetitive marketplace in which customer loyalty has suffered a significant power loss. People simply shop around for the best deals and can seamlessly switch provider every year, while regulators cap variable tariffs and keep increasing taxes. Millions of customers in the UK alone pull the plug on their energy provider every year. This is a nightmare scenario that will make any loyalty marketer wake up bathing in sweat. Sure, there are old school solutions to prevent those price point hunters from switching. British Gas has a rewards program that does just that, as it offers deals on Sky TV packages. But, a leaky bucket approach is only as effective as the next energy company’s offering with discounts on what? ….. budget holiday flights?
Time for Change
Climate change and global warming, the Paris agreements, the UN Sustainable Development Goals, the Covid Pandemic and, yes let’s not forget, teenage activist Greta Thunberg are all stressing something needs to change. More often than not fingers are pointed at energy companies, demanding that they start sourcing their core product from renewable sources. A core business that is under threat is a challenge, but it also presents incredible opportunities for innovation and growth, for start-ups and incumbents alike. It sets the scene for renewable loyalty, a bond that is not based on easily depleted price utility, but on positive motivation and preference.
As loyalty specialists, we are cognizant of the fact that parts of our core business are also under pressure. Regulators are increasingly expressing concerns about programs that stimulate behaviour that is detrimental to the environment, such as frequent flyer schemes. Recently, the UK’s Committee on Climate Change has proposed to ban schemes that incentivise excessive flying. Without wanting to sound too Greta-esque, it is time to recognise the need for change. Airline companies are responding. Qantas has introduced “Fly Carbon Neutral,” a reward program that enables members to earn points for carbon offsetting which can be invested in projects to protect Australia’s Great Barrier Reef.
Renewable loyalty is an exciting puzzle with many missing pieces.
Renewable loyalty still has a way to go to find all the pieces in the puzzle. At Motivforce R&D we are dedicated to helping clients, thought-piece by thought-piece. We are happy to share four of our thoughts:
1. How can consumers be motivated to favour pro-environmental behaviour over personal gains such as cash or incentive travel?
This is a fundamental question and a daunting challenge, given that literally hundreds of publicly- and industry-funded social marketing campaigns have failed to achieve this. In our recent study (called Me, Myself and Future Generations) we show that when people are made aware of the interests of future generations, they are more likely to engage in behaviour that is good for the environment. So, why not offer program members the opportunity to donate points and rewards to pro-environmental causes that benefit generations to come (as Qantas does), or put points in a ‘loyalty trust fund’ that contributes to financing of planned renewable energy projects to make the world a better place our children.
2. How can energy companies learn from hotel chains?
We know loyalty program managers in the hotel sector are experimenting with rewarding circular behaviour. Several hotel chains are now offering ‘green points’ to guests if they use fewer towels, have their room cleaned less often, return reusable containers, choose sustainably sourced options from the restaurant menu or even opt to stay in energy-efficient accommodation. What can energy companies take home from these hotel examples? Renewable loyalty can be about helping customers to start navigating the Internet of Things (IoT). Tech-savvy homeowners are increasingly using smart thermostats, app-controlled lighting, connected appliances, and AI-enabled devices to control their energy use in conjunction with sourcing it from clean energy providers. Energy providers should consider offering energy-saving rewards (or crypto points), such as smart metres, vehicle charging stations, and sensors that optimise energy use (by turning off lights when nobody is in a room). These aspects of a renewable loyalty program offer opportunities for making program members more environmentally conscious.
3. Energy companies are uniquely positioned to become important players in the market for electric vehicles
We are not talking about selling more kilowatt capacity. No, we are referring to rewarding compelling time-of-use (TOU) of electric vehicle rates and stimulating electric use in hybrids, or rewarding reduced emission rates. In this way renewable loyalty positions energy companies as orchestrators of sustainable transportation. It is worth remembering that many (first-time) buyers of electric vehicles are passionate about reducing their carbon travel footprint and off-peak energy use and this will fuel renewable loyalty. These sustainability-minded customers are already taking the environment dimension in deciding what energy company they will be loyal to. You need to be in their evoked set.
4. Gamification can be used to drive renewable loyalty – take a leaf out of Nissan’s book
Nissan promotes non-peak charging of its electric vehicle Leaf through gamification. Drivers who consistently charge their car during non-peak hours rise through the ranks of a badge system. Results of the campaign clearly show that pro-environmental motivations can be driven by smart gamification strategies. However, beyond that, gamification also leads to collaboration and support in online Leaf communities. In these virtual meeting places customers discuss their experiences, share ideas and explore innovations. In socially networked communities, energy should create spaces for social collaboration for their customers, based on gamification techniques and recognition structures. Also, why not explore coalition partnerships with local businesses and municipal governments, to integrate renewable loyalty and gamification with behaviours that impact the environment?
These are just four pieces of the renewable loyalty puzzle. We realize there are still 996 to go. But at Motivforce, we are committed and passionate about piecing together renewable loyalty as a purposeful business strategy. For our clients, for the world in which we live and for future generations.
