Safe, reliable, affordable. This multifaceted obligation for utilities to serve is the bedrock of the regulatory compact that still prevails today -- and it is evolving in states like New York, Minnesota, California and Hawaii.
As new regulatory frameworks emerge, utilities are also faced with ever-increasing expectations from consumers. In this context, it is not enough for public utilities to provide energy safely, reliably and affordably. Today’s consumers demand that customer value be added to the equation. Utility customers as modern consumers seek more than just energy. This is where the "no regrets" opportunity lies.
Utility customers seek a modern and digital approach to communication (including email, mobile messaging, online billing and social media outreach) from their resource providers. People flock to alternative sources when their original provider fails to deliver satisfactory, accessible and proactive service.
Utility customers are no longer just “ratepayers.” With web connectivity and mobile technology, energy customers have more information at their fingertips, and a sound customer experience is now an expectation, not a “nice-to-have.”
Indeed, the relationship between customers and utilities has fundamentally shifted, with customers taking more control over the diversifying energy sources they select to power their lives. "Value" has joined the traditional utility service pillars of security, affordability and reliability.
The way in which value is expected to be delivered to customers, however, differs depending on demands from people within utility jurisdictions. Consequently, utilities need to modernize the user experience of their commodity-driven operations to incorporate value in its many forms and succeed in this emerging customer-centric environment. Ultimately, utilities need to link value directly back to their core business and, most importantly, to the energy grid servicing customers.
Here’s where they should start.
Remove cost from programs and initiatives
Utilities should invest time and resources into designing customer-oriented programs, working with third parties to expand customer offerings, deploying relevant technology that connects to consumer devices, and measuring customer engagement successes on a regular basis. The use of strategic, thoughtful metrics, data and partnerships can reduce operational costs while maintaining consistent energy consumption. Utilities need to build upon online bill pay and account management programs to deliver accessible, low-cost programs that use information and technology to better serve people relying on their energy to live.
In practice, this comes down to observing the way residential and commercial customers are interacting with other vendors -- and adopting practices that compel customers to maintain, or expand, their current utility relationship with newly introduced digital, personalized and engaging offerings.
Further, utilities need to follow the lead of companies like Netflix, Amazon and Lyft to meet customers where they already are -- on mobile and digital channels. Using established channels will help utilities catch up. At the base level, they should also connect with people on free platforms they use on a regular basis -- like Twitter and Facebook -- and through interactive, mobile-compatible websites.
Increase focus on customer engagement and satisfaction
Many utilities acknowledge the need for increased customer experience attention, but they’re unsure how to proceed with making necessary changes. Many point to the fact that there is a higher degree of complexity to improving customer experience initiatives in comparison to other, less regulated industries. But modern consumers don’t care about how an industry is regulated. They just want a smooth experience. One thing is certain: Consumer energy is an expected commodity, and there’s inherent customer trust that utilities will guide them through issues and grid inefficiencies.
A few ideas how to maintain and justify this trust: take stock of available consumer information, advanced metering infrastructure (AMI) investments, and data that illustrates the history of consumer interactions with a utility. Use that intelligence to reformat how utilities engage with individual consumers, adapt communications for a tech-savvy consumer base and relay critical information to consumers in the event of an emergency.
Consider deploying informed messaging systems that send timely, targeted emails, texts and push notifications with vital operational information that keeps people informed without inundating them with unnecessary detail. Utilities should also examine the distribution system impacts and the integration of energy efficiency, demand response and distributed energy to capture the locational benefit of customers.
Consumers increasingly seek out, and even prefer, in-home smart products, like Nest, that allow them to personally manage energy use in an affordable way. These smart devices give people control through a smooth interface that clearly displays and communicates energy usage to consumers. Utilities around the U.S. need to embrace these types of partners and figure out ways to build programs around transparent communication and technology.
Improve marketing and customer loyalty
Utilities traditionally have been run by engineers focused on delivering energy resources reliably and consistently to a discrete endpoint. The people who receive this energy in the form of power traditionally have been seen as ratepayers, rather than customers. Essentially, end users have been regarded as data points necessary to monitor the entire grid’s performance. The rise of the on-demand economy, a mobile-first generation and the use of social media to keep businesses and government accountable have all impacted the energy industry as well. Utilities are among the service providers swept up in a consumer-driven wave of change.
Consequently, utilities need to fundamentally change their approach to conveying their value to people and strengthening consumer loyalty. In order to address the awakening of energy consumer demand, utilities should look to bundling services, data-backed consumer targeting, and the expansion of digital channels to modernize their respective customer experience initiatives. They should evaluate competitive opportunities to capitalize on a local energy grid’s reliability through rapid web and mobile technology adoption, newly created services, and revenue-generating programs that deliver clear consumer value.
Utilities need to transform -- or face customer exodus
Every customer interaction, regardless of context and industry, is an opportunity to add value to -- and frankly, improve -- a person’s relationship with a particular service provider. In the energy industry, the power to change the common consumer view of utilities as soulless bill collectors is directly connected to improving customer experience.
Utilities can improve customer perceptions and decrease the risk that they’ll choose alternative solutions by launching initiatives focused on better design, more connected and accessible customer service and the adoption of technology that reflects modern consumer demand. Over the next decade, I see utilities around the world adopting service models that convince regulators of increased efficiency, reduce costs for both the utility and consumer, take consumer usage habits into account, and use data to deliver value to people that extends far beyond the energy commodity.
Jeff Adams is a senior vice president at ICF. He is a member of the Association of Energy Services Professionals as well as a committee member of the Northern Virginia Technology Council. He holds two U.S. patents related to the submission of online applications and the customer experience.