This special interest group is where customer care professionals share tactics on how utilities are improving interactions with their customers. 

Post

Net-Zero Is About Customer-Centricity

image credit: Prospero Events Group

Switching energy suppliers is very simple today. Utilities must cope with meeting the dynamic demands of their customers. Homeowner wants to save cost and then reduce carbon footprint. On the other hand, utilities need customer engagement to ensure power system stability through flexibility. So how can energy suppliers drive growth through customers today?

Customers Benefits From Breaking Up Monopolies

Customers enjoy a variety of choices in the energy market nowadays.

Your access to Member Features is limited.

Please or apply for membership to continue reading this post.

But utilities didn't appreciate customers consistently in the industry's history.

What we see today is the result of political will and reforms. 15-20 years ago, utilities didn't care much about customer experience (CX) because they were old state-owned monopolies.

Since the early 1990s, one of the European Union's key priorities has been to create a market with cheap, reliable, and low environmental impact energy. E.U. attempted to liberalize the market, which was dominated by monopolies till the mid-1990s. Today energy markets in most of Europe are either liberalized or in the phase of liberalizing.

Losing monopoly status and deregulation forced utilities to adopt a ''hungry'' approach to customers. Nowadays, energy suppliers need to fight for each customer's trust to stay afloat.

Once the regulatory playing field leveled, the firms needed to differentiate to attract the customer.

Energy is a commodity, after all. So how do you differentiate yourself to lure a customer as a commodity supplier? Yes, your key differentiator is CX.

CX and service quality have become the critical factors in growing the business for utilities.

Technological Drive

Technology is driving the change in the energy industry.

If the customer doesn't switch to clean energy or doesn't buy an electric vehicle, then forget about beating net-zero targets that you see in the news feed everyday!

Customers must follow power generation because wind & solar are intermittent sources of energy. That's why energy firms need customer's flexibility to keep the power system reliability.

There is a hope that customer engagement will increase once they get smart devices to their homes. As customers get sophisticated technologically, utilities should get sophisticated too.

Customers are interested in how much their appliances are consuming. The smaller segment wants to know how they are saving the planet also.

You can overcome customer apathy to change from old dirty fuels to clean energy by communicating how much energy each device consumes and the carbon footprint of energy consumed. Utilities should develop business models to offer cost-effective and low/zero-carbon services to break the immunity to change.

Present Megatrends

The combination of liberalization, technological progress, and fighting climate change has brought current megatrends:

  • from centralized to decentralized generation.
  • from asset-centricity to customer-centricity.

So what utilities should prepare for having in mind the megatrends?

Four scenarios of gradual evolution:

  • Omnichannel. Energy suppliers start effective communication by combining various channels and forms: from printed letters to social media and mobile applications.
  • Product differentiation. The utility recognizes the difference among customer segments thanks to data analysis gathered through intelligent metering. Understanding unique buyer personas allow them to personalize product offerings.
  • Virtual customers. Decentralization takes mass scale. The utility firm assists the customer in energy management by offering the platforms such as Virtual Power Plants. Utility becomes an advisor to the customer.
  • Home automation. Once the smart homes become normality, the utility firm combines all three above scenarios to engage with customers at the next qualitative level. The younger generation of digitally adept billpayers is ready to endorse smart meters, thermostats, electric vehicles, smart fridges, etc. The new customer perception allows utilities to deploy big data analysis, A.I. powered chatbots, IoT, in full scale to boost CX.

Different Customer - Different Approach

The energy industry had traditionally low customer engagement. Most people don't care about their energy bills.

A perfect market allows customers to find suppliers who are ready to meet their specific demands.

For example, some customers are demanding clean energy, but they also want specific clean energy. They prefer wind energy but stand against nuclear power.

Wants and needs of residential, commercial & industrial, and small business segments differ significantly.

Every family is different and has a different buyer persona. But it's not only the billpayer utilities should focus on. Every family member's experience counts too. Suppose the husband pays the bill, then the wife and children's experience with energy services will have the ultimate impact on him. So keep an eye on wife and children too.

How do you deal with those different accounts as an energy retailer?

Taking an individual approach to each buying persona is vital for utilities. Advanced smart metering and data analysis will enable utilities to reflect specific needs in real-time mode.

The more personalized the CX will be, the higher engagement. So all technological improvements should be around one customer.

Further considerations to boost CX:

  • Test and learn. Don't assume that you are the customer; go and ask what they are struggling with.  How customers react and how you say they will respond are two different things. Measure the impact of CX actions.
  • Billing communication is vital, especially when you don't have smart meters.
  • Bundling like in telecom is the way forward in energy services.
  • Customers must get energy app experience the same way they get banking app experience today.
  • Create a system when a customer calls, he/she speaks with one agent. Customers want one point of contact when they call instead of being "footballed" between different agents.
  • Share happy customer reviews with employees to boost internal morale. Knowing that customers are so glad will keep employees positive.

Where CX Starts?

First, you need to understand where you are in terms of CX at the moment by making an internal audit to clarify six key points:

  • Do you have a customer vision and strategy in the organization?
  • Do you use customer research to base your decisions?
  • To what extent does your organization have a clear plan around how it designs current CX improvements and reimagination of CX moving forward. Design thinking approach.
  • To what extent it prioritizes investments in CX? You can say whatever you want about customer's importance, but if you don't put money behind your words, it's just "hot air."
  • To what extent does the organization track and measure that it's delivering on CX?  Quantifying and measuring CX is crucial for success.
  • To what extent does it have leadership and culture around being customer-centric?

Without the last point, forget about CX. CEO and board commitment is the key factor to implement CX programs.

P.S.:

Cost aware homeowner wants to reduce energy bills. To save the planet, he/she might even pay a bit more. How will you engage with such a customer in the hyper-competitive market? The energy industry landscape is changing rapidly. Small startups and large new entrants are challenging incumbents today. You will win if you reinvent yourself around evolving needs of your customer.

 

Rauf Fattakh's picture
Thank Rauf for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Discussions

Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Bob Meinetz's picture
Bob Meinetz on Mar 29, 2021

"Customers Benefit From Breaking Up Monopolies"

Are monopoly utilities really being "broken up" when those same utilities, are selling the same electricity, to a third party - which then applies an arbitrary "40% renewable" label to it and charges the customer more for it?

In California, "Community Choice Aggregators" are entirely unregulated entities, and are even protected by law from having to provide records of their sources of electricity. For all a customer knows, his "40% renewable" plan could be delivering electricity from a coal plant in Utah.

After speaking to many customers who have been automatically switched to a CCA without their permission (or even being aware of it), and are now paying substantially more than they were previously, I'm convinced CCAs amount to a scam - with our corrupt Public Utilities Commission accepting backdoor cash to look the other way.

Of course, if someone has evidence they're legit I'd be extremely open and receptive to hearing about it. None has been forthcoming.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »