A Technology-Enabled Approach to Improving a Longstanding Small Business Program

Jun 29, 2020

Small businesses represent a large portion of a utility’s customer base. Nationally, small businesses spend more than $60 Billion/year on energy (Source: ENERGYSTAR). Yet, despite the fact that energy costs directly impact a small business owner’s bottom line, it can be difficult to encourage participation in energy efficiency rebate programs. Small business owners often don’t have the time to investigate energy efficiency improvements or available utility rebates, they need guidance in evaluating and comparing options, and may feel overwhelmed by confusing or complex rebate application processes. To effectively drive participation in this challenging customer demographic, utilities and program implementers must develop program designs that overcome these common barriers. 

This blog post provides a case study describing how Nexant is taking a technology-enabled approach to overcome barriers, and to evolve and improve a small business program for a large, Southwestern utility. 

Let’s start with a little background…

Program Design

This is a mature small business program that Nexant has administered for ten years. Eligible businesses must have an annual energy usage that is less than 145,000 kWh per year. This targets a pretty small business (typically less than <50kW demand). In addition, the 145,000 kWh threshold applies to the sum total usage of all locations for that customer, which often eliminates businesses that have multiple locations. Because of these requirements, small retail stores (often in strip malls) are the most common participants. The largest buildings/spaces are churches; which despite having a large footprint, often stay under the required energy usage threshold due to their low operating hours.

With regard to the program delivery model, this is a closed-network, trade ally driven program. Because it’s a high-touch program that desires to maintain very high customer satisfaction marks, trade allies are selected via an RFI/application process and receive significant training and oversight. Although the utility performs program marketing, trade allies conduct 100% of the human-to-human program outreach and they are required to provide a no-cost assessment for each interested customer. Trade allies handle the entire application process on behalf of the customer, and perform the installs themselves. All program rebates are ‘instant rebates’, meaning incentives are instantly deducted from the cost of the project and payments go directly to the trade ally. Therefore, the customer pays only the balance, which helps limit up-front cost for completing the upgrade.

The benefits of this trade ally driven approach, in which we arm qualified trade allies with the knowledge and tools that they need to drive program participation, are that we are able to maintain high customer satisfaction while meeting the utility’s cost-effectiveness targets.

If the COVID-19 situation has done one thing, it has shined a light on the fact that small businesses such as these often maintain little in the way of cash reserves -- so pursuing costly energy efficiency improvements can be a challenge. With this in mind, our utility client has elected to offer lucrative rebates that are designed to cover (on average) about 75% of the project cost, resulting in a customer copay that is often less than $500. Even with attractive rebates that require little cash on hand, the customer copay can remain a significant barrier to many of the mom-and-pop businesses looking to participate.

Evolving to Meet Changing Needs

Over the last decade, the program has witnessed major shifts within the marketplace that present both new opportunities and challenges. Program design changes that have occurred in the last 24 months provide a good example of how Nexant works closely with its utility customers to continually improve and evolve program offerings to meet changing needs. The process began with identifying utility-specific goals and developing strategies to achieve them. These goals included: (1) expanding the measure offerings beyond lighting, (2) raising overall customer satisfaction, (3) improving visibility into the project pipeline, and (4) providing a predictable and consistent customer experience, from one trade ally to the next. 

Leveraging Technology to Achieve Goals

To achieve these goals, we used a formula of one part creativity and three parts technology, leveraging our iEnergy platform. The iEnergy platform is Nexant’s cloud-based software as a service (SAAS) solution that was purpose-built to provide customer and trade ally engagement, and comprehensive program management. Users can submit rebate applications, respond to program requests and track projects throughout the various stages. 

As a key component of this small business program, we’re enlisting the full capabilities of iEnergy OnSite. This is a highly-configurable mobile assessment tool that can be run on a tablet or mobile phone for in-field use. It streamlines program participation for trade allies and customers, and reduces application review timelines while providing enhanced quality assurance and centralized version control. It serves as both the assessment tool and the application portal.

Here are some of the ways Nexant applied creative and innovative solutions to help achieve program goals:

Goal Number 1: Expand Beyond Lighting 

For the first decade of its life, the program was a lighting-only program. But as the lighting market evolved, and the utility’s goals and objectives changed, a decision was made to evolve the program toward a more comprehensive, lighting + non-lighting program offering. This was not just as simple as adding non-lighting rebates and then waiting for them to roll in. Because this had been a lighting-only program, the participating trade allies were mainly lighting companies. To make this succeed, we were either going to need to provide training to the lighting contractors, recruit and add HVAC contractors, or encourage and facilitate partnerships between lighting and HVAC companies. We chose to do all three.

The first step in the journey to a more comprehensive program was to introduce a smart thermostat measure, which was designed to ease lighting contractors into basic HVAC upgrades, and to position the customer for potential future participation in a demand response program. The next step was to add additional HVAC measures including rebates for electronically commutated (EC) motors, economizers and AC tune-ups. (Future measure additions under consideration include refrigeration and compressed air measures.)

In addition, we did some creative incentive design to encourage the bundling of lighting and non-lighting measures. Understanding that this program is driven by the lighting contractors, we had to find a way to entice them to pursue non-lighting measures and partnerships; therefore, we designed a customer rebate and contractor bonus structure that increases as non-lighting measures are introduced to a lighting project.

And finally we implemented our iEnergy OnSite mobile assessment tool, which not only serves as a mobile application portal, but also assists lighting contractors in identifying HVAC upgrade opportunities, acting as a checklist that can be shared with partnering vendors. The tool not only guides the assessment process, but also provides estimated energy savings based on a few user inputs making it simple for any salesperson to accurately convey project benefits to a customer.

Goal Number 2: Raise the overall program satisfaction score by increasing the Number of Customer-Initiated Projects

Because this is a trade-ally driven program model, the great majority of projects are initiated when a trade ally makes a sales call to a small business, describes the program, and offers a free assessment. Historically, a much smaller portion of projects are initiated when a customer responding to a utility marketing campaign (such as a newsletter or bill stuffer), inquires about rebate opportunities. The trade ally driven model has kept program admin costs low, and with proper training and administrative oversight, we’ve kept customer satisfaction scores high. Still, we know that customers who initiate participation themselves are generally more likely to have a positive experience, so we felt that we could raise overall customer satisfaction by refocusing our marketing efforts and creating strategies to engage customers first, balancing out our push efforts (via trade ally outreach) and pull efforts (via utility marketing campaigns). In order to do this, we had to make it as easy as possible for a customer to initiate a no-cost assessment.

We leveraged iEnergy’s ability to create an easy-to-use public application portal. We configured it so that small business customers who learned about the program via marketing efforts could go to the rebate center on the utility’s website and, after entering some basic account details, submit a request for a free assessment with just a few clicks. The system, upon receiving the request, automatically sends the project to the rebate processing team for a quick review. Once reviewed the system automatically assigns a lead to a participating contractor who receives an email informing them of the assessment request. The contractor can then log in and view that project from their portal, reviewing any customer notes, preferred assessment date, and any other details about the facility.

Goal Number 3: Improve visibility into project pipeline

One of the challenges of a trade-ally driven model is that you don’t always have full visibility into potential future project pipeline from trade ally sales efforts, until you have a preliminary rebate application in hand. In effect, there could potentially be hundreds of quotes in the marketplace at any given moment with no way to accurately gauge the funds needed to fulfill those potential projects, should they come to fruition. To avoid any unexpected surprises, and to most effectively manage the available funding, we needed a better way to collect information on assessments completed and quotes delivered. 

Prior to implementing the mobile assessment tool, each trade ally conducted the assessment using their own tools and methodologies. They then submitted an excel-based audit/application form to apply for rebate. Submitting the preliminary assessment to the program to reserve rebate funds was optional, so trade allies tended to do so only for the larger or more certain projects. Now, every assessment is conducted using the iEnergy mobile assessment tool which immediately opens a project in the iEnergy program management database. This gives us complete visibility into the number of assessments being performed by trade allies. Although not every assessment performed results in a rebate being paid, we have the information we need to greatly improve the accuracy of participation forecasting.

Goal Number 4: Provide a predictable, consistent customer experience from one trade ally to the next

As mentioned above, a key element of the program’s design is that every potential project starts with a no-cost assessment done by the trade ally. This is an audit of sorts that ends with a proposal showing the customer recommended energy efficiency improvements and the anticipated copay after the instant rebates have been applied. Occasionally, customers request a proposal from more than one participating trade ally. Although the program provided guidelines for the information that should be included in each of the trade ally’s assessment reports, it allowed for some flexibility to accommodate each trade ally’s practice. Over time, we learned that this allowed for enough difference from one trade ally to the next, that it could be difficult for customers to compare apples to apples. We needed a way to ensure a more predictable, consistent customer assessment and enrollment experience.

Every customer assessment is now done using the mobile assessment tool. Collecting the customer signature is done electronically, eliminating paper completely from the application process. After completing the assessment, the trade ally is able to instantly calculate project cost and rebate and share that information with the customer via a standardized assessment report that is attractively formatted and utility-branded. If the trade ally has a mobile printer, they can leave behind a printed copy of the assessment report immediately after completing the assessment, which reduces the required number of customer/trade ally interactions getting from assessment to enrollment much faster. When multiple trade allies are bidding the project, the standardized assessment report allows the customer to easily compare project proposals.

With an eye toward continuous improvement, while leveraging iEnergy solutions to automate, expedite, and add consistency to the customer participation process, we are successfully evolving a mature small business program to grow customer satisfaction and meet the utility’s changing goals. By improving user experience and streamlining the participation process, Nexant is reducing the effort needed for business owners to take advantage of instant rebates.