In last month's article, I introduced you to coproduction experiencesâ€”a model for how companies form a competitive advantage through customer performance. The four elements of the model are vision, access, incentive, and expertise. In this month's article, I'll explore how vision, specifically customer feedback, helps shape and improve customer performance.
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In the late 1980s, two researchers from the Netherlands teamed with a Dutch power company to change the behavior of the power company's customers. As part of a nationwide effort to conserve energy, the power company wanted to discover the ideal method that would cause customers to independently reduce their energy consumption. Obvious customer education methods such as advertising and flyers included in customers' bills weren't driving the change that the power company desired.
The research team decided to take a different approach. Instead of focusing only on methods that simply told the customer what to do (reduce energy consumption by some amount), they decided to enhance it by providing information about how the customer was doing toward achieving that goal. In other words, the team wanted to provide customers feedback on their energy consumption behaviors.
The team considered several options for providing this kind of feedback to customers. In the end, the team selected three methods. One method was a real-time energy consumption indicator installed in customers' homes; this device would enable customers to observe energy consumption information in real time. A second method was energy consumption information included in the customer's monthly bill. A third method was customer self-monitoring of the electric meter.
In all, 325 homes in the Netherlands took part in the study. The team gave all homes the same goal: reduce energy consumption by 10%. Homes were then randomly assigned to one of four treatment conditions:
- Real-time energy monitor
- Monthly bill energy usage report
- Self-monitoring of the meter
- Control group (which received no feedback regarding energy use)
As shown in the following graph, the treatments that included both goal and feedback resulted in stronger customer performance than the control group. However, only one of the groups exceeded the goal set by the team: Homes that had the real-time indicator experienced the greatest reduction (12.3%), surpassing the researcher's goal by 2.3% percentage points. The monthly statement group experienced a 7.7% reduction, the self-monitoring group experienced a 5.1% reduction, and the control group experienced a 4.3% reduction.
These results show that vision, in the form of clear goals and active, real-time feedback devices, contributes to a coproduction experience that enables customers to deliver sophisticated performance. Customers are able to unlock greater value in the form of reduced energy costs.
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