Americans are interested in a prepay option for utility services that would work in conjunction with smart meters, according to a new consumer survey.
Marketing group EcoAlign examined customer perceptions and expectations of a voluntary prepay option offered to consumers by local utilities.
"The survey findings point a rapid ripening of prepay as a voluntary option, with a short-term addressable market of approximately 20% and another 25% or so that could enroll after education and targeted marketing," stated Jamie Wimberly, CEO of EcoAlign. "Prepay could be the first customer-facing benefit from smart grid and have a large impact on the utility sector."
Consumers cited the following top three benefits for using a voluntary
prepay option: 1) paying for energy as you use it, 2) eliminating any
surprises at the end of the month; and 3) control over costs. "These
responses highlight the consumer perspective of utility service as a
commodity and thus something to be managed and controlled," EcoAlign said in its analysis.
The top-line survey findings include:
–Prepaid products have gone mainstream with over one-half of all Americans having purchased or used a prepaid product, and even more Americans planning to do so over the next year.
–75% of all Americans are satisfied with their prepaid options and products, with almost one-half who have used prepaid products responding they were “highly satisfied.”
–What are the drivers behind satisfaction? Consumers pointed to “ease” and “convenience.” This implies that prepaid is aligned to consumer preferences in regard to bill pay channels and lifestyle choices. When asked how prepaid products make them feel, many Americans simply responded “happy.”
–Prepaid products may not suit all consumers. There is a generational divide, with younger people much more likely to be satisfied or highly satisfied with prepaid options. Women also tend to like and use prepaid products more than men. Finally, renters may be more apt to use prepaid products than homeowners.
–A core group of consumers (17%) are “extremely interested” or “very interested” in a voluntary prepay option offered by their local utility. For most service industries, this level of interest would signal the need to support prepay products and channels. Another 25% of consumers indicated that they were “interested” or “somewhat interested,” signaling that there is room for growth, once utility prepay options enter the market.
The survey also found that 46% of respondents were “not interested at all” in a voluntary prepay option offered by the local utility. "Americans increasingly use prepay options and like them. Yet, there is a sizeable number of Americans who are not at all interested in a voluntary prepay option offered by their local utility," the group said in a release.
EcoAlign suggested possible reasons for the gap may be:
- Prepay is a new bill paying option for some Americans, so unfamiliarity leads to uncertainty.
- Older Americans are much more likely to stick to traditional bill pay channels, e.g., writing a paper check.
- Distrust and/or skepticism of the utility’s motives.
- Uncertainty with regard to costs vs. benefits, especially if there are fees associated with a utility prepay option.
- Concerns over service disruption and disconnection.
"Smart grid holds a lot of promise in the minds of Americans," Wimberly said. "Yet for this promise to be realized, new products and services will need to be allowed into the utility sector. This EcoPinion clearly points to the fact that some customers will readily embrace new options if offered."
The survey is available for free at the link below.
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