March 6, 2018

The Rise of the Choice Engine

When it comes to energy, it’s crucial to add fresh, relevant and personalizable information to the consumer experience if we’re to transform the way we all buy.

Written by
Guy Champniss

We’ve written quite a bit about two big topics in the last few weeks.

First, we’ve written about the conceptual differences between choosing and picking. We’ve argued (or rather piggy-backed on others’ arguments) that when it comes to making super-efficient purchases, it’s not due to us as consumers not being willing to make that choice, but rather that we cannot. That’s to say, in the current market, the action of trying to secure the most efficient product in its class is reduced to an act of picking, as there is no way to choose (the energy efficiency information for any specific product is not available). It’s like ending-up with a can of Campbell’s soup: we ultimately have to pick by default.

What’s more, our experimental research and our observational data analysis shows this to be the case; that when we remove the need to pick and give ourselves the option to choose (thanks to the Enervee Score), we as consumers to pick more efficient products — significantly more efficient, and even more efficient than the levels set by offering financial rebates, it turns out.

In other words, it looks as if it’s been a market-created barrier to buying more efficient, rather than us as consumers simply not being bothered to choose well.

Second, we’ve written about our new platform, the IDEAL Customer Platform. The platform focuses on delivering the 21st century energy provider the type of customer they want and need — one that is identifiable, digitally-engaged, energy-centric, actionable and loyal.

The rationale for the IDEAL Customer Platform is that it’s only by developing customers that exhibit these characteristics that energy companies can drive engagement which in turn delivers energy savings and opens-up opportunities for novel new services and products designed to save energy long-term (think demand response, distributed energy resources, electric vehicles etc).

It all starts with the customer, and this — the IDEAL customer — is the customer energy providers need.

To build this customer and to meet its specific objectives and ambitions, the energy provider can pick and choose (or rather just choose, of course) which applications and services of the IDEAL Customer Platform they want to configure and present to their customers (this becomes the utility’s own Ideal Marketplace). Amongst the range of applications within our IDEAL Platform, there’s a bunch called choice engines. It’s this concept of a choice engine that causes everything we’ve written about recently to fit together.

The Importance of Choosing Well

At Enervee we’re committed to ensuring we all make better choices for our homes when it comes to the appliances and products we buy. So that means being able to choose (not pick), and then being motivated to choose the best.

But here’s the issue: we know shoppers tend not to search for new products by efficiency, so providing a search function will neither be sufficient nor appreciative of where and how efficiency plays in the overall consumer decision journey. But it’s more complex still: for efficiency to be salient and relevant for consumers, it has to be relevant, timely and personal. In other words, to affect choices on the scale we want, we have to inject new data, information and decision aids into the customer journey to make energy relevant and personal, and at just the right moment. It’s worth spelling out the paradox again: we as consumes do not search by energy efficiency, but we do choose super-efficient when we have the option to do so.

This means we have to work beyond search and focus on choice. We have to embellish the market, to make the market work. Integrating and the interpreting new data specifically for the individual in question is precisely what Nobel prize winner Richard Thaler and Will Tucker see as a ‘choice engine’. If search serves up the ingredients, choice creates the recipe.

Enervee’s Choice Engines

As choice engines, Enervee’s principal applications (Appliances, Lighting, Home and Cars) all add and make sense of additional, personally relevant data for the consumer at the right moment. These choice engines respect the established search criteria for product shopping (price and reviews) and deliver those results for the user, to then work to seamlessly introduce energy data into the decision mix.

First, there’s the Enervee Score — this product-specific efficiency ranking is a key additional data-point in the product market, which we’ve seen is vital in driving more efficient purchases. Secondly, the Enervee Energy Savings Calculator (with ClearCost and YouSave) takes personal usage rates, ownership timeframes and personal tariffs to show users exactly what they will spend and what they can save. These are data that the market cannot provide anywhere else — we know choices are systematically and significantly poorer without these inputs.

Further still, Enervee Home — as another choice engine within the IDEAL Customer Platform— accepts and processes consumer data with respect to appliances currently running in the consumer’s home. This further personalises the experience — data- and timing-wise — to show potential savings and incentives. It creates the truly energy-centric consumer.

Whilst the various Enervee choice engines focus on different product categories, buying circumstances or decision-styles, they are all similar in that they weave crucial additional data into the decision journey for the consumer.

Some of these data are collected and delivered directly by Enervee (the Enervee Score) and others are a product of consumer interaction with the Ideal Marketplace, yet the result is the same — an experience that ensures energy is visible, relevant and actionable for the individual consumer. This, we believe, is the only way to deliver a better choice, at scale.

At Enervee we’re incredibly excited about the potential of using our choice engines to guide better decisions for us all, and we see bringing together our key applications under this banner as a major step forward in terms of helping both our teams and our customers recognise the potential of more and more sophisticated choice engines. Choice engines vividly capture the potential to combine the logic and magic of data science, behavioral science and digital marketing to deliver better choices. Choices that are personally relevant. Choices that can make all the difference.

Nobel prize winner Richard Thaler and Will Tucker sum it up when they talk about the potential of choice engines in the (near) future:

“The rise of choice engines will do more than create super shoppers. It will make markets more efficient, create new businesses, and improve the way governments serve their citizens. Big stuff.”

So for all energy providers thinking about how best to engage their customers for the long-term, and who are looking to take the services of one of the growing number of vendors that offer a marketplace solution for energy-saving buying, we’d just say is this:

Choose well. Because the future belongs to better choices.

[1] Richard Thaler & Will Tucker, ‘Smarter Information, Smarter Consumers’ Harvard Business Review. January -February 2013 issue.

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