What do millennials want from their energy providers?
Millennials are far more willing than non-millennials to pay for renewable energy resources, but also more willing to change providers, if they can get better value and/or better service.
Now that millennials are the largest U.S. generation in terms of population, their needs and wants will be increasingly influential in all areas of the U.S. economy in the coming years. In the energy industry in particular, where many utilities are just beginning to transition to more customer-centric operational cultures, millennials are bringing radically new values and desires to the table, especially when compared to baby boomers, the previous largest generation.
While assumptions about and stereotyping of millennials are prevalent both within and outside of the energy industry, the Smart Energy Consumer Collaborative (SECC, formerly the Smart Grid Consumer Collaborative) recently undertook a meta-analysis of three of its latest consumer surveys to get to the bottom of who millennials are and what they actually think about important energy topics, including energy efficiency, utility customer service, renewable energy sources, the smart grid, electric vehicles, common utility programs and more.
The “Spotlight on Millennials” report developed a vivid picture of who millennials are, insights that are particularly relevant for the more customer-centric energy industry of the future.
Digital natives come of age
As the first generation to come of age with routine access to the internet, millennials demand a seamless digital experience and easy access to information via websites and/or mobile apps. They’re considerably more likely than non-millennials to own four or more digital devices and use apps for three or more purposes. They are technically adept and able to navigate today’s digital ecosystems to extract the value they want from their service providers.
According to SECC’s consumer segmentation framework, millennials are most commonly classified as Green Champions, a tech-savvy cohort of consumers that are more likely to value the environmental benefits of the smart grid and grid-edge products and services. Although a plurality of non-millennial consumers also now falls under the Green Champions segment, nearly 40 percent of millennials are Green Champions, compared to just 28 percent of older generations (Figure 1).
Further, when we look at the older half of the millennial generation (aged 29-34 at the time of publication), we see an even higher proportion of Green Champions, likely due to their relative financial stability compared to younger millennials.
In fact, younger millennials (aged 17-28) are far more represented in the Saving Seekers segment, a group that is primarily concerned with how energy programs and products can save them money, when compared to older millennials and non-millennials. Older millennials, too, are slightly more likely to be Savings Seekers than non-millennials.
(As part of the “Consumer Pulse and Market Segmentation Study — Wave 5”, SECC, then SGCC, defined five unique consumer market segments: Green Champions, Savings Seekers, Status Quo, Technology Cautious and Movers & Shakers. Each segment exhibits distinct levels of awareness, interest and values around smart energy services and technologies, and survey respondents are classified into one of the five segments based on their responses to a sequence of 12 questions. More information on these segments can be found here and here.)
A generation with new values and preferences
Millennials clearly value digital experiences, easy-to-access information, environment-friendly products/services and saving money, and these core generational characteristics are important in determining how millennials prefer to interact with their energy providers, how they view the key energy issues of today and what kinds of energy products and services they’re interested in adopting.
In general, millennials are more engaged with the companies that they choose to do business with and expect top-notch customer service, and when compared with older generations, they tend to want a more active relationship with their energy providers. They’re open to change and are ready to work with energy industry stakeholders to create a cleaner, more efficient energy future – if they will meet their expectations.
Based on the data from three consumer surveys with over 5,000 total respondents, conducted over the course of a year, we’ve determined four things that millennials want from their relationships with their energy providers:
1) Treat me like the individual I am.
While we’ve already mentioned that millennials are more likely to be Green Champions and Savings Seekers, in fact, millennials are well represented in all five of SECC’s customer segments, including, surprisingly, the Technology Cautious, a group that doesn’t really see how technology can help them be more energy efficient and save money.
Despite the many general trends uncovered in this report, keep in mind that millennials are still not a monolith and often bristle at being lumped together as one, according to a Pew survey from 2015. Personalization goes a long way when engaging this cohort.
2) I like you and trust you, but don’t think I won’t jump for a better offer.
In general, millennials see their energy providers as trustworthy sources of accurate information on energy-related products and services. When asked if an endorsement from their energy provider would positively influence their adoption of a product/service, a majority of millennials (52 percent) said that it would, compared with 39 percent of non-millennials.
However, while this is good news for energy providers, it’s important to note that millennials are typically savvy shoppers who are accustomed to more open marketplaces with clearly delineated options that have come with the Internet Age. Raised on e-commerce platforms like Amazon and eBay, they diligently read reviews and compare offers.
If another energy provider offers better value and/or better service, millennials are seemingly more likely to jump ship. They are more likely than non-millennials to express interest in purchasing energy through a solar installer, a telecommunications company or another electric utility (Figure 18).