How NOT to sell efficiency of Power Electronics

I’ve recently read “Thinking, fast and slow” by Daniel Kahneman. In this book, the Nobel Prize winning psychologist presents the economy of psychology and the ways our brains make decisions. This got me thinking on how some arguments we as engineers are using to fit our purpose, and how valid or useful they really are.

Over the years, I saw (and sometimes even used) several bad selling points for the technology advancement in power electronics and drive systems in general. Here are the ones that struck me most obvious after my recent read:

X Times less losses than conventional products!

One of the favorite lines used in promoting enhanced efficiency is to compare it to the existing, widely-used technology. This is a trap which we engineers fall for: to believe that everyone is interested in a product that is newer and somewhat better. Although many times favored by me, I see now a three-fold problem of this argument. The first is that it keeps improvements quantitative. Then there is the fact that the sold product is still a loss. And the third is that the actual palpable benefits are not exposed. Let’s go through them one by one…

Quantitative improvements: we are bound to give very little weight to quantitative improvements, compared to qualitative improvements, when it comes to unemotional trades. We see an improvement from 97% to 99% significantly smaller than the improvement from 99% to 100%. This keeps an offer of something slightly better rather unattractive, especially since it requires an actual effort from the potential buyer. The status quo itself is not so disappointing.

Selling losses: selling losses is always a bad idea. People don’t want to buy negative things, whether they’re in small amounts or larger amounts. The fact that the losses you sell are smaller than the ones others have, does not change the fact that you are selling losses. It is never appetizing to choose between negatives and without further information the instinctive choice is to go with the status quo. A loss you know is a loss you can control, while a new one is still to be assessed. And this is also enforced by the dislike of forcing one to choose between negatives, a case which was not present before this argument.

Exposing actual benefits: our rational brain is lazy and trusting, while our instinctive brain is fast to decide and very convincing. If your product is an electronic device with a higher efficiency, a motor which is smaller, or a generator which converts energy better, you have to remember who you’re selling to. I’ll give you a hint: it’s not your customer. While selling “lower losses” can be convincing for engineers, it is challenging to justify to other groups that ensure business success. It’s hard to understand why one would pay more for something they can’t use to increase their own selling price. It is important, when changing the status quo, to help your customers cover not only their expenses and risks, but also increase his ROI. And remember, the rational brain is lazy, and does not like thinking several iterations ahead. If you cannot convince of the actual tangible benefits of the investment, you will not sell. Having the end user in mind will help your customer understand the ROI for your solution, see tangible and intangible benefits they can draw from it, and prepare the correct strategy to sell their product including your technology.

X% More energy converted!

  To me, the fallacy of this argument laid hidden at first. It took some effort to understand its problem. The error here is that, when we use this argument, we implicitly assume the already extracted (or converted) power is not enough. This is rarely the case, and most of the times the situation deems the extra boost unusable. Imagine adding 50Nm on the axle of a Tesla model S – would it really make a sensible difference for most of the payers? Or having a wind turbine that generates 100kW more power at peak wind – how often would it actually do that? And how many times will its’ power be curtailed by the grid operator, and not by the availability in wind? So, while not as poor of an argument as others, relying on it as THE selling point is not a good strategy. It could help close the deal, but don’t use it as the main focus. You wouldn’t start building a house from the roof, would you? The same way you shouldn’t start selling from the nice additional benefits that come over time.

Additional investment damped in only X years!

  I can’t get a grip where exactly you still see this argument, but it was present in early rooftop PV panels’ comparison. While from a purely cold calculation perspective this might look like a strong point, it has an intrinsic problem: this phrase yells out that “more expensive”. And who would like to pay more money, right? Very few people are instinctive rational decision makers. We generally prefer benefits closer in time, and an increased investment damping is not something you can see right away. Ask someone to choose between receiving 100€ right now, or 200€ at the end of the month. Although the economically reasonable choice would be the second, most of us will choose the first option. This is something to keep in mind when trying to sell a superior technology as well. The better yield in time is for most of your audience not convincing enough. And while this selling strategy does not completely undermine your market penetration, it does reduce your initial customer base from all early adopters to only tech-savvy, economically educated early adopters. Why would you want to reduce your customer base?

Lower environmental impact

  Although this problem speaks to our society, especially in the Western World, the reduction your footprint is hard to quantify and this argument is easy to demolish. The carbon footprint of a product goes far beyond its contribution to reduction in emissions due to improved exploitation. So let’s create a hypothetical example. I will use a wind turbine generator as ground, because these are lower voltage systems, in which modern high-efficiency electronics could already be used (or are very close to getting to that market). You have a highly optimized synchronous generator with e.g. permanent magnets and a very optimal rotor cooling circuit, and a wide bandgap based full-scale converter, and reach an electric conversion efficiency of say 95%. You have an improvement compared to a classical technology of i.e. 4%. This is huge! For a normal wind generator, this would mean about 100kW. That’s 50 vacuum cleaners! So that’s nice, but the overall system efficiency would then improve with only ~1.5% in peak wind conditions. The time for a wind turbine to become carbon neutral is about 9 months – how much would a huge jump in efficiency improve this figure?  Clearly not.

These are maybe just a few of the arguments brought for promoting higher efficiency technology, and they’re the ones that I find wrong. They probably struck me as most relevant because in the past I have used them myself. Next week I will touch on the ones that I feel should be the main focus of anyone who wants to sell products for their efficiency, and could actually help the cause!