Taking a suggestion from an anonymous rant reader [doesn’t want to get fired], I purchased and have been reading a book called Predictably Irrational. Figuring out peoples’ decision-making process is my job – to win proposals, design programs that people want, and how to attract and keep the best workforce. Process evaluation of EE programs contributes a great deal to this as well.
Now, I ask you to find a calm state of mind, such as lying in bed on Saturday morning. Relax. Hang with me till I explain this. For worse and better, engineers are more rational than non-engineers. Why? Because they like to calculate stuff and put numbers on everything. This can make a lot of sense when putting a major league baseball team together, or determining whether “icing the kicker” with a timeout works – just look at the numbers and statistics and do the math, but numbers don’t do anything for emotional or socially acceptable decisions. There are always discrete exceptions to this. There are always socially clueless people in every crowd.
One of many examples the book explains is selling stuff at any price, even a very low price versus giving it away. Selling stuff involves market forces – supply and demand. Giving stuff away involves social forces – a sense of thinking kindly about your fellow homo sapiens.
Good cookies go for roughly a dollar from a grocer’s bakery (I think – maybe?). Prices are set by market forces, and I suppose they make decent profit selling them at this price. If you purchase these, or make equivalent cookies, and sell them in the lobby of your workplace for some dirt cheap price, but not unbelievably low, say a quarter, some guy may have no compunction and snap them all up to take home to his ravenous kids. “Dude, they’re a buck in the store! What a deal! I bought em fair and square.”
In the second scenario, the cookies are free. Again, there are always discrete social zeros (persons) in the world, but chances are the first person to take a cookie is not going to pull out a grocery bag and swipe them all and walk away. Presumably, he will consider his fellow office dwellers and the fact that they may want a cookie gift as well. There is also the pressure to control oneself to not feel like a cheap stingy ____ in the case of taking them all. Again, there are always exceptions, but people generally weigh these social issues to control their actions. Which reminds me, people who drain the coffee decanter at 9:00 in the morning and don’t set it to brew another pot are kind of socially deficient, wouldn’t you say?
These issues intersect with energy efficiency in interesting ways. One example is the energy audit. Lore says end users must have some skin in the game for an energy audit or they will do nothing – implement nothing. Anything for an investment by the customer – say “$50 is much better than nothing” is the fable.
My conclusion: the only thing $50 does is stops 90% of audits from happening. This isn’t like shelling out a quarter for a cookie, which is easy for an individual. Fifty dollars is a huge barrier because the money has to be approved by bean counters. Consider this: in a big company, everything has a cost associated with it. They know what it costs to process a payment and cut a check, and that is in the $40 range. Really. Suddenly spending $40 to pay a $50 fee while consuming several hundred, if not several, thousand dollars of peoples’ time starts to look ridiculous – even if the fee were $500 rather than $50. But by god, they’ll sure as hell do something since they invested the $50. Not.
The ignorant person may think the customers’ perspective is, “Wow, what a deal. My utility is selling audits at 90% off. I love my utility.” No. The vast majority of cases would sound more like this – “I pay those guys $50,000 a year and they want ME to shell out $50 for an audit. Drop dead.” This is the social consequence, a customer relationship issue, ON TOP of huge time and expense to process payment for a paltry amount of money.
On the flip side, the customer, once the audit is complete, is likely to take action based on market forces and return on investment. They are not likely to think, “My utility paid for this audit so I’d better throw them a bone and implement this thing with the return of a 10 year federal treasury note” – that would be about 1.5% nowadays.
We have found that an excellent approach to “skin in the game” goes like this: We will provide ___ services for free if you, the customer, agree to implement identified measures meeting ___ criteria. Here you have a serious offer; a generous offer; a partnering and low risk offer. I believe the generous and partner aspects add a social commitment, as well as a market commitment to energy efficiency for customers; and that even in this scenario, sticking the customer with even a small portion of the service cost wipes out the social aspects of the contract that push it over the top.
I’m at the word limit but I just want to add a couple more optional takes from this.
First, some customers, huge customers, want everything for free from the utility, and I mean everything, including the entire cost of measure implementation. These customers unfortunately are not worth approaching, other than for show. That’s just the way it is. Don’t shoot the messenger.
Second, if the audits aren’t worth a damn, the program won’t be successful regardless of zero cost. Actually, in some markets for some utilities, paying the 20% has become the accepted market and social norm because of the reputation for the deliverables.
 This can get quite graphic when nerds go on vacation or when they need to determine the best approach for acquiring a power tool. Symptom: spreadsheets. Look out.