Millennials: Can Utilities Capitalize on Their Potential?
Millennials are growing more influential and not just in spending power. In fact, for energy providers, they are disrupting traditionally held beliefs about consumers’ energy experience. While challenging, this also presents an opportunity for energy providers to engage this demographic group, who likely will drive the most value going forward. Indeed, millennials bring a strong influence on the pervasive trends shaping consumer engagement. But energy providers must pay close attention to their preferences: they are much more demanding and less loyal than other age groups.
First, consider the opportunity millennials represent. More than other demographic groups, they are seeking out new products, services and experiences, and energy providers must build new capabilities to capitalize on this opportunity.
For example, millennials are far more likely to consider distributed energy resources (DER) products and services after receiving related information -- 87 percent compared to 60 percent among those consumers over 55 years of age , according to our latest New Energy Consumer research. Further, they don’t just want these products, they want to be the first to have them, with nearly one quarter self-identified as early adopters.
Masters of personal relevance and self-expression, they are also avid social networkers. When it comes to energy utilities, 41 percent of millennials interact more frequently with their provider using social media, and they would also be more satisfied if they could log into their energy provider’s portal via social media credentials.
Seamless experiences are also key: almost 80 percent said they’d be more likely to consider switching if their energy provider could not provide them with a seamless experience.
Of course, millennials like to engage with service providers, which is an advantage for providers. But minimizing millennials’ time and effort spent managing their energy purchases and consumption will be important. The formula will be: engagement plus convenient, effortless and instant services equals success.
Going further down the digital path, 77 percent of this generation would be interested in an online personalized marketplace for energy-related products and services, and more than a third would be interested in automated home solutions – and willing to pay for them. Adapting to this demographic’s willingness to pay for products and services by tapping into their penchant for personal branding will be key for energy providers’ future growth.
Millennials also value services with information sharing aspects or the ability to benefit collectively. In other words, they like the idea of “me” but like to work it out through the “we.”
The complexity of millennials doesn’t end there. Energy providers should consider a few more facets to capitalize on the opportunity this demographic represents. For example, our latest research revealed, that:
- 82 percent would be more satisfied if offered an in-home system that automatically limits electricity usage at peak periods.
- 79 percent would be more satisfied if offered an in-home device providing energy usage feedback and suggesting customized products and services.
- 61 percent would sign up for an app that can remotely monitor and control home elements.
- And 56 percent are most likely to sign up for solar panels in the next five years, compared with just 28 percent of people over 55 years of age.
These findings reinforce that millennials are the leading consumer group, who seek more from an energy experience – their expectations go far beyond the basics to demanding a high level of personalization.
Too demanding? Most millennials would likely say, no, why not demand meaningful services? For energy providers, understanding what millennials want—and then delivering against those expectations—represents a central challenge and opportunity in the new energy ecosystem.
But there are risks, if millennials’ demands are not fully met. In fact, of all the demographic groups, 79 percent of millennials said they would be more likely to switch to another energy provider in the next 12 months, compared with 64 percent over age 55.
The energy providers that will be winners in the future will place people, and specifically millennials, at the heart of their customer strategy and organizational model.
The desires and expectations of millennials and generation Z’s behind them suggests the need for energy providers to evaluate an “energy optimizer” business model providing a range of products and services to optimize millennials’ energy usage, with tools including energy efficiency programs and rebates, and time of use energy rates.
The bottom line for energy providers – millennial consumer expectations are shifting the imperative from delivering electricity to delivering instant, relevant, engaging and meaningful energy experiences. Successful energy providers are building capacity to grow into entirely new offerings as consumers’ preferences shift and evolve. The power to do so begins -- and remains -- with understanding the new millennial energy consumer.