Prosumer engagement will replace Consumer business models (Utilities)

I had some very recent discussions about the new emerging business models, based on storage. Storage will totally change the way we approach consumption and will create new models and services around it.

In my view storage will bring a big revolution into the smart grid space/utility market, identical to the one that RAM (Random Access Memory) brought in the Computer Architecture, back in 70’s. The ability to store and manage capacity in an optimal way, is a great advantage to any multi-variable system (Electricity, Fluid Mechanics, Logistics, Sales, etc)

Storage will give great power to the local users ie. Prosumers (energy producers and consumers at the same time) and various business models will be deployed around them. Still, many moving business parts are around and still Utilities, DSOs and Regulators are trying to position themselves, in terms of pricing, regulations, policies or even to take lead advantage of the first mover. Innovation and especially incremental innovation that has end-users inside, is the one that pushes things forward. And especially in a traditional slow moving industry (utility) where a big digital transformation is about to begin (already present in some countries and local markets).

Prosumers will have power (business and data power, prosumers will own their personal digital data !) to manage/monitor/evaluate capacity and with the addition of current digital technologies (mobile apps, a bit of sharing economy, SaaS platforms, analytics, AI, IoT frameworks, etc) various disruptive business models will be tested. No-one knows exactly right now which one will be the dominant one and which will scale up fast. Pricing, tariffs, regulations, are somehow part of the strategic game and will be used by Utilities and DSOs to position themselves.

A big questions is WHO owns storage ? 1) the consumer ? is it really educated and engaged to use it thoroughly ? 2) The DSOs ? primarily for balancing and frequency regulation but this requires automatic control of the battery (or strong consumer commitment) and new financial models for subsidizing storage installations and 3) the utility ? for supporting new Prosumer DR and DMS functionalities (I call it Prosumer Demand Response -> PDR) and for load shifting… still many questions to be answered

However, the Prosumer will be in the middle (still Home automation has some years ahead). Will be the one that has to be engaged with the local “micro-grid” system and the one that could support some disruptive models. ie to sell its selected capacity on a “on demand” basis to EVs (neighbors) with a charger outside its house and a POS for online payments over Paypal; this can be supported with social apps and sharing platforms (storage marketplace). Of course pricing will be important and will depend on other prices for the grid.

Another model for the utilities would be the use of EVs as a leasing to the utility customers (Uber-like) and by getting credits (by charging the EV to specific spots based on the utility signals) to earn discounts in the home utility bill (provided that the user is a customer of the same utility). It happens that my company works on these specific scenarios (over game mechanics and consumer engagement in a larger sense) and still we think that innovation will pop up from these small human-oriented disruptions…these will push utilities to adopt things, new things…

Hence, Prosumer business models are an important part of the utility digital transformation process and the consumer will soon be a romantic definition in dictionaries. All we need is customer education, awareness and to drive the correct engagement to the correct target groups that will lead disruption (Pareto principle)

“Dark Data” & “Interactive Effects Theory” in Behavioral Science

 How engaged you are ?

In general there is a lot of discussion lately for the term “engagement”. What is actually the core difference with the term “loyalty” ? there are many articles defining the difference and some people point out that engagement is a metric of loyalty or engagement leads to loyalty… I kind of agree with most of them since they are related with revenues, product adoption, etc; however nobody puts the term human behavior in the centre of the whole macro-system: Human – Technology Interaction, HTI

To shape any user’s behavior using any modern digital service (app, online web, social, etc we live in the Digital Transformation era) initially some simple demographic and contextual data is required. However, if we want to approach engagement as it should be, we have to take the analysis one step further, and among the previous ones, we have to merge psychographics, sentiment, training and specific behavioral data that are not visible to the simple eye including their correlations

Basic queries to be answered are “Do users follow a particular pattern in the product/service ?”, “Why they are doing so ? ”, “What interaction they usually do ?”, “How results are determined by their initial actions and what exact actions are these ?” and “What is the impact of their behavior on simple daily actions they do”. In other words, accurate correlated behavioral data tells us not only what is happening, but also how and why it is happening.

Connecting the dots is the key, even with metrics that are not visible or measurable to the naked eye

Based on my research all these years, I refer here to two very important terms that we are lacking in almost all engagement/loyalty or customer experience reports and analytics procedures: Dark Data and Interactive Effects and of course the use of a complete Engagement Framework that will put all functions on a procedural map and orchestrate the whole system to follow the consumer journey, which is a multidimensional random variable

 

Dark Data

What I mean by the term Dark Data ?

Dark Data in Data and Behavioral Science are these KPIs/metrics or even raw data that are not easily measurable directly (via sensors or other devices) and they may exist only if we trigger the human system under specific conditions and for a small period of time

By using an app, I can analyse the clicks, pageviews and other directly measurable indices and derive patterns that will drive my UI, my app functionality or even understand my customer; however I cannot measure the “learning curve” or the “learning speed” of the specific user nor his sentimental reactions during his digital experience or what other friends are telling him that specific time about the digital service…not until I run a quiz, a test, a gamification approach, a survey or apply other innovations and analyze time responses, knowledge curves and other variables…this is Dark Data and they do play an essential role on human decision making that drives a part of engagement

Another example is to discriminate in a class the good students, in terms of grades and good behavior…I cannot measure that until I run a test and check if they will try to cheat…this is a wrong behavior that tells me a lot about his character but do not know until I trigger the system and do not relay only on the final grade

There are ways of measuring or creating on-the-fly additional data and metrics that tune the human behavioral model and reveal Dark Data…

so triggering the system, creating additional metrics and measuring dark data on a human-digital relation, drives better the engagement models

 

Interactive Effects Theory

A human behavior is comprised of actions and reactions. This can me modeled as a chain, or even better as a Markov Chain, where its state is only related to its previous state and in each state human can take only one decision. In modern behavioral science and engagement, we should analyze these Interactive Effects

For example, if I want to shift your energy behavior and make you save energy, then I could educate you and change your cooking habits. To do that, instead of sending you messages and tips, I could propose you a specific diet or I could offer food incentives that could shift your energy, by eating healthy food

This is an example of an interactive effect. To model that, you have to create a connected semantic model, identify the states (action, reaction, result), deploy a Markov chain with many parallel options and start playing with probabilities and then tune the model using the actual data you are getting from the digital service by following the human actions. We do that and it works !!

 

Engagement Framework

All the above points (and many more) should be on a unified map, should work together and should be correlated. Thus, we need a complete Engagement Framework, that will orchestrate the engagement analytics, the behavioral incentive models, the personalization, the dark data sensing, the interactive effects and drive actions and reactions on a timeline, in order to validate the engagement model and to achieve actual, measurable engagement metrics !

 

I will refer to all the above, I will explain how we use these secrets in our Utility Engagement Services with case results (some great numbers) from our DiG SaaS Engagement Platform (http://intelen.com/us/solutions/dig.html) in my upcoming talk about engagement and gamification at the European Utility Week 2015 in Vienna (http://www.european-utility-week.com/).

Join me there ! @ http://programme.european-utility-week.com/hub-sessions/smart-homes-end-user-engagement/session-47-understanding-consumer-journey/impact-game

 

My 1st open Futurology talk @SAP forum 2015

In one of my recent articles about the Theory of the 5th Dimension, I referred to the digital “5th dimension” and how human physics will interact with the social cyberspace in real time; the key is wearable IoT sensors and integrated Social Cyber-Physical systems – CPS

New mathematics and methodologies will be derived and complex equations will be created to describe the digital-physical time-variant interaction over a huge multidimensional feed of various sensor data and correlations with human behaviors

More in my recent futurology presentation @ the SAP Forum 2015

 

Enjoy:

Digital Transformation and the “virtual-physical” world on a 5th Dimension

In some recent discussions I had with friends, the term Digital Transformation (DT) came up. DT refers to the changes associated with the application of digital technology in all aspects of human society. And when we talk about humans this is where a second term enters into the equation: physical world.

Many big vendors refer to this term or have already developed services about transforming digitally old markets or the human society to jump on a higher digital dimension…

If we try to approach the topic from a different perspective, someone can admit that digital and social are becoming the 5th dimension in our life, if of course we accept that we experience all the other four (still without any control on the Time dimension)

Let me get it simple: when Facebook entered into our lives some years ago, a brand new virtual world was born that reminds a bit the super movie “Surrogates“. As this interactive digital human-driven subspace evolves, new technologies arise to make it more interactive and transform it to something more “human-oriented”;

Oculus buy-out from Facebook was not at all a random event, a new 5th dimension is under development, the one where we will be able to control all physical dimensions (our appearance, our status, our profile, our avatar, etc) PLUS time: a fully digital-virtual world with human-driven avatars and emotions. Looks like Matrix

The immediate need then, would be to connect somehow some physical variables from our real-life and upload them into the virtual world; and this is where Internet of Things -IoT- technologies will help to the maximum degree.

IoT still searches for its value proposition…his unique value prop as the technology is there and evolves fast. Various IoT sensors (wearable or not) that will collect emotions, physical interactions, medical data, health and other variables will be uploaded to our social/virtual profile and will start interacting with other virtual characters, forming a digital social world with interactions based on real data, multidimensional and not single-dimensional as Facebook right now

This is the Digital Transformation not of any industry but of the real human physical world, as we humans will be operating on a 5th dimension…the next step will be Transcendence, where a fully physical human model (descriptive data of our body, emotions, experience, memory, life interactions, psychometric, etc) will be digitally uploaded into the cyberspace…;-)

…more on this topic on my upcoming futurology talk @ the SAP Youth Forum pretty soon :-)

Gamification

Amid technological breakthroughs, companies and organizations are striving to get higher on the market’s ladder. In order to keep up, they have to make their customers loyal and engaged to their products and services. This need is amplified on the utility market, where it is not just that profits are high and potential loss of customers is critical, but also the necessity of engaging customers into sustainable behaviors is urgent. Thus, a tangible challenge emerges: How can utilities “nudge” their customers to shift their pro-environmental habits while maximizing their perceived value so as to “lock-in” them in the long term? Intelen’s answer is: Gamification.

Till now, multiple approaches to gamification have been piloted and commercially deployed within the energy sector.  Each leverages different gamification techniques and different core objectives. However, not all gamification recipes can lead to positive outcomes.

Take for example rewards, a core element of gamification. Most of gamified experiences rely on a system of external rewards that is restricted to points and badges. However, research reveals that such rewards have negative impact on users’ engagement. Since rewards and punishments are just two sides of the same coin, joy of the short term could be easily turned into disappointment and dissatisfaction if such elements are seen as incentives. Thus association between rewards and users’ activities should not to be taken lightly.

Intelen has developed such an expertise on gamification that can take engagement one step further. By incorporating points that are redeemable and can be translated into personalized prize as well as badges that are shared between peers or can be shared on social media, utilities customers’ long term interest, motivation, satisfaction and engagement, are ensured.

But Intelen does not stop there. Intelen also integrates in an optimal way other elements like peers’ ranking, levels and leaderboards, and mechanics such as short-term and well-defined goals, positive reinforcement, subtle feedback loops and features’ unlocking mechanism, so as to make sure that triggers directly user’s emotional level and deliver the maximum gamified experience.

At its core, Intelen’s gamification takes into account multiple learning theories that indicate evidence on motivating users perform sustainable behaviors. Among them, task based learning that assumes practice and action as essentials in order for a desired behaviour to be taught, subliminal learning that suggests knowledge to be acquired even in an unconscious way as well as social learning that implies people to learn not only from their own experiences (trials, errors), but also from other social models and other people (ex. family, friends, colleagues and people in the public eye).

Lastly, by utilizing granular and real-time energy data, Intelen provides instantaneous feedback on energy consumption and feed a recommendation system that reverts to users personalized tips on how to achieve energy efficiency and reduce their peak demand.

By turning energy management experience into a game, Intelen promises to deliver engagement boosting, loyalty and behavior changes associated to the inefficient skyrocketed energy consumption.

Source: http://www.utilitydive.com/news/gamification-track-energy-goals-and-engage/343531/