Millennials are becoming the largest demographic and are the largest generation employed in the U.S. workforce and their clout and spending power will only increase until the middle of the century. Over the past five years, they have made up the largest percentage of those applying for home mortgages, making up 36 percent of the market in 2018 National Association of Realtors Home Buyer and Seller Generational Trends study. That means many Millennials are building relationships with utility providers.
Millennials are concerned with environmental sustainability and affordability while being extraordinarily social media and tech savvy – 80 percent of Millennials are on Twitter and 91 percent have a Facebook profile. How can utility companies improve Millennials’ customer satisfaction – and boost their return on equity? By abiding by the three “Cs” in dealing with Millennials: clean, cheap and convenient.
Millennials have been a driving force behind shifting to clean energy sources, with 56 percent saying that utilizing clean energy sources is important, while 86 percent think the government should establish a plan for energy strategy. Socially conscious Millennials spend their money with companies whose values align with their own, and Millennials have been dubbed Green Champions, those concerned with environmentalism.
An Accenture energy consumer survey shows that 56 percent of Millennials want to incorporate solar panels into their energy sources. Additionally, more than 60 percent are willing to pay for a smart grid to easily integrate clean energy sources into the grid, with 30 percent of the opinion that a smart grid’s biggest selling point is the environmental benefits.
Millennials reached adulthood during the Great Recession or shortly thereafter, so their spending habits often are more in tune with Silent Generation – who grew up during the Great Depression. Add to that outsized student debt and stagnant wages that have only recently begun to climb, and many Millennials spent their young adulthoods pinching pennies.
It isn’t surprising to learn that 84 percent of Millennials are confident in their ability to manage their finances – or that they frequently use technology to do so. Millennials also are savers – when they can be – one in six has saved more than $100,000. Those who are able to do so begin to save earlier and with more discipline than older generations.
However, Millennials’ earnings are low in comparison to earlier generations at the same point in their careers – half of what their parents were making at the same point in their careers. Because of the bleak economic picture when many Millennials entered the workforce, nearly 70 percent have nothing saved for retirement. It’s no wonder they look for savings in every aspect of their lives, including energy consumption.
Despite their thriftiness, Millennials are interested in energy-saving, web-based technologies, and 50 percent of them are willing to pay for real-time information. Demand among Millennials for such technology is high, with 61 percent likely to sign up for an app that remotely monitors their energy usage and control home elements by 2021.
Millennials expect a seamless experience across all channels; four-fifths would consider changing providers if not provided one. They interact most frequently with providers using social media, with 41 percent have expressed the desire to log onto their provider’s portal using their social media credentials, and they are twice as likely to use digital channels to contact their utility provider.
This is important, because digitally engaged customers are more likely – by 10 percentage points – to trust their energy providers. In fact, more than 70 percent of digitally engaged customers trust their provider to share their information with third parties. This allows for packaging, or offering multiple products in one place. Utilities have increasingly begun to partner with other businesses to offer expanded services to their customers, serving as a portal for a range of services.
One of those services is a home warranty, which provides speedy and reliable home repair from licensed and insured local contractors for a low monthly cost. HomeServe USA provides service line and interior electric coverage – contact us to learn how you can engage your customers with this value-added service.
Edward Andruskiewicz, a lifelong Luynn resident and a World War II veteran, is very grateful to HomeServe for installing a new boiler at his home.
“I had 3-4 feet of water in my cellar that was caused by flooding from the Nor’easter [in January],” said Andruskiewicz.
That’s when HomeServe, Andruskiewicz’s home service provider who had given him a $500 veterans discount for the first boiler, stepped in and delivered quickly for the River Street Place resident. His customer representative, Roger Boucher, had heard that the 87-year-old veteran was sitting in the cold with another storm bearing down.
“They called me and told me they had heard about my boiler being flooded,” Andruskiewicz, who worked at General Electric for 30 years before his retirement. “They felt real bad about it and my customer rep said he was going to get in touch with HomeServe’s home office and see if anything could done about it.”
One day later, Andruskiewicz received a call from Boucher that HomeServe was going to replace his boiler at no charge.
“Free, zip, zero,” said Andruskiewicz. “I got my heat back again.”
He served his country in the U.S. Army during the latter stages of World War II and rejoined the military in the Korean War. “I was part of an organization that was similar to the Seabees, only we worked for the Air Force and wore army uniforms,” said Andruskiewicz.
Looking back at his entire boiler experience, including his relationship with plumber Leo Paquette and apprentice Rodney Hylton (whom he calls ‘fantastic guys’) and the excellent service and generous gesture provided by HomeServe, Andruskiewicz said, “I’m so grateful to HomeServe, I don’t think are any words to express that. I’ve always known that there are some good people in business out there. It took me a quite a while to really grasp that this company was this good. I would recommend this company to anybody, believe me.”
Utility consumers have more choices, and it’s no longer enough to simply provide reliable electrical service – in fact, that has become a baseline expectation from consumers. With customers’ ability to switch providers and a field full of newcomers offering low rates with razor thin profit margins, some utility providers may be left wondering how to retain their customers.
Customers are looking for more than reliable service – they want honesty, efficiency and good corporate citizenship from the companies and brands they do business with, and there is more information to help them make a decision than ever before. Consumers’ relationships with their utility providers are changing, and providers must change as well or be left behind.
According to a Cohn & Wolfe study, just 3 percent of Americans believe “big businesses are very honest and transparent.” In a Gallup poll, only Congress did worse than large corporations when it came to trust.
While people may not believe large corporations are honest and transparent, they want honesty from the businesses they interact with – more than they want innovation and great products – and information, both positive and negative, on most large corporations is widely available.
Consumers want to deal with a company that has values that align with their own and takes ownership of mistakes with a focus on improvement. More companies are voluntarily offering an annual corporate responsibility report, with eight in ten of the S&P 500 doing so in 2017.
As part of that, consumers want open, easy communications – and, despite the prevalence of “self-service,” they want a customized experience with options, ranging from live agents to web-based platforms to social media presence. Millennials, in particular, are accustomed to a seamless experience across multiple platforms and are tech-savvy enough to seek out information on the corporations they do business with.
The energy industry has made huge strides in efficiency – the average American home uses 40 percent less energy than it did 50 years ago – but consumers want more and they want it in a way that is cost effective and environmentally friendly.
Nielson has found that 71 percent of households see efficiency as important, but only 35 percent think their homes are energy efficient. While 90 percent are willing to change their usage to save costs, a majority – 59 percent – are willing to pay a higher cost for energy if it’s good for the environment.
There is strong support for requiring utilities to help customers reduce consumption through efficiency program and products, with 80 percent in favor, according to a Conservative Energy Network poll, with the same poll showing 64 percent indicating they would be willing to pay higher energy costs if it meant investment in clean energy.
A Deloitte Resources Study shows 90 percent of those polled expected to maintain or reduce the amount of electricity they consumed. The study also showed that affordable energy is the top concern, at 59 percent, followed by moving to clean energy, at 56 percent.
When making decisions about where to spend money, consumers want to engage with companies that make their communities a better place, and, when it comes to energy, they are interested in clean energy and renewables.
Millennials, the oldest of whom are reaching their prime home-buying years, are increasingly classified as Green Champions, interested in environmental benefits and the tech that makes it possible, such as smart and grid-edge products and services. The Smart Grid Consumer Collaborative finds that 44 percent of consumers fall into the Green Champion category and even more – 58 percent – are interested in rooftop solar power for their homes. Furthermore, most support clean energy programs, with 41 percent saying they would pay an additional $15 per month to expand their utility’s clean energy program.
Globally, one-third of consumers are considered Aspirationals, whose purchasing habits and interest in sustainability combine as part of a market shift toward “authenticity, well-being, sustainability and social purpose,” according to a BBMG and GlobeScan report. One in five are considered Advocates, who are even more committed to responsible consumption and will pay more for socially and environmentally responsible products and services. Both are committed to consuming less to preserve the environment with 88 percent of Aspirationals and 90 percent of Advocates in support of environmental preservation.
By incorporating these three traits and focusing on customer satisfaction, utility companies can increase customer retention and ROE. Several studies have shown a link between customer satisfaction and higher rates of return.
Utilities are expanding from providing commodities to offering energy services, including everything from solar panels to high-efficiency LED light bulbs, while reaping clean energy and efficiency incentives. Forward-looking utilities also are engaging more with their customers, reaching out with informational and educational materials, instead of waiting for the consumer to come to them.
Among those energy services being offered are home warranties, providing reliable and convenient repair service for home electric, gas, water and sewer lines. HomeServe USA has an extensive network of licensed and insured contractors who maintain an A Better Business Bureau rating and a 24-hour, 400-seat, award-winning call center. To find out how HomeServe can help expand your offering of energy services, contact us.