In 2003 Professor Robert Cialdini, OPOWER’s Chief Scientist and one of the nation’s preeminent behavioral psychologists, conducted a seminal study that provided the foundation for a new type of energy-efficiency program, one based on voluntary demand reduction. The study showed that applying normative messaging, i.e. providing people with “peer proof” for an energy-saving action, can lead to large-scale adoption of that action.
This study intrigued OPOWER’s founders, but it also presented them with a challenge: How to convert this finding into a large-scale, cost-effective program that drives improved energy efficiency across millions of homes. They recruited top talent from firms specializing in large-scale consumer marketing (Capital One and Amazon.com) and set out to determine how to engage millions of households. The result is a patent-pending process called AEMS, which leverages cutting-edge behavioral science, customer-segmentation techniques, and statistical analysis to motivate and sustain action on a broad scale.
AEMS Framework
AEMS stands for Analyze, Engage, Measure, and Sustain. While the details are OPOWER intellectual property, you can take a look into some of the inner workings of the AEMS Framework here.
Analyze
Our process begins with an analysis of your customers’ past energy usage data. But this information alone is not enough. To fully understand our audience, we enrich usage data with information from nearly half a dozen other sources, including tax assessor’s offices and third party demographics.
The result is a sophisticated customer segmentation analysis that defines more than 250 distinct segments, each of which is engaged in a slightly different way.
Please see the Insight Engine section to learn more about the customer analytics engine that powers all of our products.
Engage
Next comes highly targeted customer engagement. We connect with customers by taking advantage of all existing communications between a utility and its customers: mail, web and over the phone.
In each instance, we produce a message tailored for each individual household based on everything we know about the customer, from past usage to estimated income. Our approach yields customer engagement rates estimated to be between 60-80%!
Measure
Measuring our impact is the backbone of our process—and the key to our success. We’re constantly measuring the energy savings our efficiency products drive, a practice that involves continuous statistical analysis of billing data as well as periodic customer surveys.
All of our utility partners get regular progress updates on the impact our programs are having, information that enables them to accurately forecast the total likely savings of their energy efficiency portfolios in a given year.
For more details on our M&V approach, please see M&V Approach in the RESULTS section.
Sustain
Finally, our meticulous measurement, verification, and customer-survey process allows us to keep our products and messaging continuously evolving to ensure maximum and sustained customer engagement.
Our software is designed to learn more as more data comes in. If a customer tells us about an energy-saving action they have already taken, we won’t recommend that same action again. If a customer has trouble saving during particularly hot days, we will increase our engagement in the months leading up to the summer.
Every time we interact with them, customers learn something new about their energy use. That’s why, in every utility where our Home Energy Reporting platform has been deployed, the monthly energy savings have continued to increase over time.
Please see our results section for more details on the impact and sustainability of our program.