# Marketing Demand-Side and Time-of-Use Programs to Reluctant Customers
In 2010, Bakersfield, California became a cautionary tale. As Pacific Gas and Electric rolled out smart meters (digital meters that record electricity use hour by hour and send it back to the utility), customers revolted. Bills spiked during a brutal heat wave, and people blamed the new meters. Lawsuits followed. A California Public Utilities Commission investigation found the meters were largely accurate, but the damage was done. The rollout had a technology plan and no marketing plan.
That gap is the whole lesson. The hardware works. The behavior change is what fails.
Utilities push three related products at customers who did not ask for them:
All three ask customers to accept short-term inconvenience or perceived risk for benefits that are delayed, invisible, or uncertain. That is the hardest sale in marketing.
The reluctance is rational. A customer hears "dynamic pricing" and assumes it is a trick to raise their bill. They are not wrong to be suspicious: the framing usually leads with what the utility wants, not what the customer gets.
Before you design incentives, name the barrier. Most resistance falls into four buckets:
1. Loss aversion. People fear a higher bill more than they value an equal saving. A TOU rate that could save money still feels like a threat.
2. Effort and habit. Shifting laundry to 9 pm is a daily chore nobody signed up for.
3. Distrust. Smart meters, "the utility is watching me," privacy fears.
4. Invisibility. Electricity is abstract. Nobody watches kilowatt-hours the way they watch a gas gauge.
Your marketing has to answer the specific objection in front of you. A distrust problem needs a transparency fix, not a bigger rebate.
Behavioral economics is unusually useful here. The core finding, from Daniel Kahneman and Amos Tversky, is that losses hurt roughly twice as much as equivalent gains feel good.
Two design moves follow directly:
Use bill protection on new rates. When customers move to a TOU rate, guarantee that their first year will not cost more than the old flat rate. This removes the downside, so trying the rate stops feeling like a gamble. Several US utilities used this "bill guarantee" approach during default TOU transitions, and it measurably reduced opt-outs.
Frame the peak event as a reward, not a penalty. A "Peak Time Rebate" that pays you for cutting usage during an event outperforms a "Critical Peak Price" that charges you more, even when the math is identical. Same dollars, opposite emotion.
This is the single biggest lever, and it is a marketing decision disguised as a policy one.
Regulators increasingly allow opt-out (default) TOU rates precisely because opt-in adoption is so weak. The lesson: the default is the most powerful nudge you have. Design it deliberately, and pair it with the bill protection above so the default feels fair, not forced.
The classic behavioral framework here is worth internalizing. See the UK Behavioural Insights Team's EAST framework: make the behavior Easy, Attractive, Social, and Timely.
Asking people to change habits daily is a losing strategy. Asking them to enroll once and then automating the change is a winning one.
The smart thermostat is the model. A customer enrolls, and during a peak event the utility nudges the temperature a couple of degrees automatically. The customer can override it, but most do not. You converted a daily decision into a single sign-up.
Marketing implication: sell the device and the autopilot, not the discipline. "Set it once" beats "remember every afternoon."
Social proof moves energy behavior. The best-documented example is Opower (now part of Oracle), which sent home energy reports comparing your usage to similar neighbors. Peer comparison produced small but persistent reductions in energy use across millions of homes. People do not want to be the wasteful house on the block.
Use it carefully. Telling efficient customers they are below average can backfire and nudge them to use more. Pair every comparison with an approving signal (a smiley face, "Great") for the already-efficient so you do not undo your own work.
Timely beats generic. A peak event alert the morning of a hot day, delivered by text, outperforms a brochure mailed in March. ReachReachThe number of unique people exposed to your message in a given period. Unlike impressions, reach counts each person once, no matter how often they see it.Voir la définition complète → people when the decision is live.
If the barrier is trust, no incentive will overcome it. The Bakersfield meltdown was a trust failure.
Concrete moves:
Transparency is not a compliance afterthought. It is the core of the pitch to a skeptical segment.
Do not market TOU the same way to everyone.
Same program, four campaigns.
Vérification des acquis
1. The lesson argues that the Bakersfield smart meter revolt was fundamentally a failure of what?
2. Why does the lesson describe TOU, demand response, and efficiency programs as 'the hardest sale in marketing'?
3. A customer refuses a TOU rate that analysis shows would likely lower their bill, saying 'I don't want to risk my bill going up.' Which barrier best describes this?
4. Select ALL correct answers. According to the lesson, which of the following are reasons customers are rationally reluctant to adopt these programs?
Sélectionnez toutes les réponses correctes.
5. Select ALL correct answers. Which statements reflect the lesson's guidance on diagnosing customer resistance?
Sélectionnez toutes les réponses correctes.
Marketing failures often come from bad sequencing, not bad offers. A defensible order:
1. Educate before you price. Give customers a few months of usage data and insight before the new rate takes effect. Let them see their own peak.
2. Run a "shadow bill." Show what they would have paid on the new rate versus the old one, with no money changing hands yet. This builds trust and lets people self-select.
3. Default them in, with protection. Opt-out enrollment plus the first-year bill guarantee.
4. Automate and remind. Thermostats, app alerts, event notifications.
5. Report and reward. Peer comparisons and visible credits keep people engaged past the novelty phase.
Skipping steps 1 and 2 is how you recreate Bakersfield.
Enrollment is a vanity metric. What you care about:
Run pilots as controlled experiments where possible, with a comparison group, so you can attribute changes to the program rather than the weather. The US Department of Energy publishes evaluation guidance and results through its Smart Grid resources, a solid free starting point.