Utilities will use data and empathy to connect with their customers as an ‘audience-of-one'
- Jan 19, 2021 11:54 pm GMT
This item is part of the State of the Industry 2021 SPECIAL ISSUE, click here for more
Co-Authored by Liza Minor, Senior Staff Writer, E Source
During COVID-19, utilities engaged with their customers in a more personal and proactive way than ever before. The lessons that the industry learned in 2020 will transform how utilities design customer programs and experiences in 2021 and beyond. Utilities will turn to quantitative and qualitative data to understand their customers as distinct individuals – or as an audience-of-one – and predict what actions they’ll take. Not only will this help utilities better serve their customers, but it will also help utilities save on operational costs and reach their clean energy goals.
As our E Source executives described during the 2020 E Source Forum session Tough Questions: Candid Answers: E Source perspectives on a changing utility industry, the utility industry is undergoing major shifts, and COVID-19 has created an environment where utilities can meet the needs of their customers and start to get ahead. Connecting and empathizing with customers are crucial elements to the future of our industry. At the E Source Forum, I spoke with E Source executives who shared their perspectives on the top five biggest trends in the utility industry in 2021.
1. Utilities will use data to more precisely target their customers for utility programs.
Using artificial intelligence and machine learning, utilities will maximize the value of their data for more precise targeting and participation in customer programs. This will help utilities recruit the program participants that can best contribute to their goals.
E Source recently worked with a utility on the west coast that was able to improve its demand response (DR) event impacts by 30% by using artificial intelligence models to evaluate individual DR participants daily based on weather. The Forum session “Turning customer insights into results,” one of the Top 10 sessions from the 2020 E Source Forum, highlighted Portland General Electric’s Peak Time Rebate DR program, which is one of several utility programs using the audience-of-one framework.
Utilities are also applying predictive data science to customers who are new to arrears. The same audience-of-one concept can identify groups of vulnerable customers. In 2020, Evergy Inc started using these models to reach out to at-risk customers and help keep them on track. We expect more utilities to use data science to improve program performance and better serve customers in need in 2021.
2. Utilities will use ethnographic research to better understand customer needs.
Leading utilities are layering in qualitative and quantitative ethnographic research to design intentional and tailored customer experiences. Utilities are starting to have more conversations with their customers to understand what they really care about, and then develop solutions through design thinking. Utilities saw an increase in the number of low-income customers during COVID-19. About one-third of utility customers. Empathy is a necessary first step when interacting with this customer group.
Design thinking uses how-might-we questions to come up with solutions to innovation challenges. Utilities will ask, how might we more effectively communicate what actions low-income customers can take that will make noticeable impacts on their bills? This year we’ll see more utilities pursue the audience-of-one strategy by getting personal customer feedback and combining it with predictive analytics and data science.
The Forum session “Low-income customer panel: What we need from our utilities,” another of the Top 10 sessions from the 2020 E Source Forum, provides insights from interviews with real utility customers about what they’re struggling with and what they want from their utility.
3. Utilities will focus on creating personalized customer experiences for every customer.
Utilities are doing a lot of work to personalize their customer experiences, but most of their solutions have historically been one-size-fits-all. Utilities are starting to move away from this generic approach to meet customers specific needs. Our industry has been trying to keep up with leading consumer brands that have been using the audience-of-one approach to more successfully target and serve their customers for years.
The goal is to keep everyone’s rates low, but we also know that just a small portion of a utility’s customers will provide the most benefit to the grid. This means that utilities will need to understand the differences between their customers in order to treat them equitably, rather than providing the same solution to everyone. To become a trusted energy advisor for all customers, utilities will offer more tailored advice and tools based on the needs of each customer.
This two-minute clip from the 2020 Forum offers ideas on how to frame the utility problem in a customer-focused way and ultimately provide customers with solutions they actually want.
4. Cities and utilities will join forces to pursue economic development and decarbonization.
The relationship between utilities and cities will become increasingly intertwined as they work toward economic recovery, economic development, decarbonization, and clean-energy plan execution in 2021. Utilities will focus on better understanding the intersection points of cities and the constituents they serve as part of the audience-of-one approach. We expect to see utilities engage with the cities and communities where their customers live in order to reach their big sustainability goals.
The city of Ruston, Louisiana recently implemented a smart city initiative to launch new smart technologies to improve transportation, public safety, environmental quality, and utility services. We feature this coordinated city and utility initiative in the E Source webinar Top-notch smart city planning: Ruston’s holistic, inclusive, and digital results.
5. Utilities will incorporate data science into their grid planning to move from reactive to predictive grid management.
Implementing an audience-of-one approach requires that utilities have already met customers’ basic needs for reliable service. Utilities also need to ensure that the grid is resilient and sustainable. Utilities that move from cadence-based operations to a predictive, risk-based decision approach will:
- Reduce the risk of outages
- Drive affordability
- Increase reliability
- Save money
- Change the way we manage the grid
In 2021, utilities have the opportunity to really get to know their customers and provide personalized solutions to help them pay their bills, meet clean-energy targets, and reduce operating costs. The pandemic has created an environment where utilities will innovate within their regulatory frameworks and become a trusted energy advisor for customers.
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