By Steve Malloy
To secure their future and deliver on their promise for tomorrow, today’s utilities need to do more than restructure physical infrastructure. They need to restructure how they interact with a critical asset and ally: their customers.
Changes in policy, infrastructure, financial models and climate are spurring utilities to reexamine how they do business. Utilities are looking to manage the grid and meet revenue targets by engaging their customer base in new ways, with programs and technology to achieve everything from energy efficiency to grid optimization.
The modern digital customer, whether running a home or a business, now expects a greater degree of personalization from brands. Developing a personalized communicative relationship with customers, particularly with less engaged and more elusive segments, allows utilities to run a more efficient and more reliable grid by working with their customer allies, rather than around them.
Here, we lay out “how to’s” for utilities to foster a more engaged customer.
1. Understand expectations to reach them
The modern customer’s expectations from their utility are being shaped by e-commerce interactions with large corporate brands offering highly personalized digital experiences in other industries (e.g., retail, banking, travel).
Massive tech companies like Amazon, Netflix and Google leverage data analytics, machine learning and multi-channel communications to engage their users. Customers expect brands to make their online experience easier by showing an understanding of their purchasing habits, history and goals, all while updating them in real time throughout the experience (e.g., package has shipped, flight is delayed).
Customers also want to know their power provider recognizes their individual energy needs. Showing this recognition–through digital platforms, personalized communication and even face-to-face interaction with a utility-provided energy consultant–is a foundational step in earning customers’ engagement and trust.
2. Overcome customer knowledge gaps
Energy consumption is necessary in function but complex in concept. The current utility engagement model easily confuses and overwhelms customers with a wide range of program and product offerings. As it is, customers struggle to understand their energy usage and rate plans.
It is important for a utility to share information tailored to each customer individually. Customers don’t care how the utility industry silos programs or groups customers into segments – they want to take advantage of cost-saving opportunities that address their own unique needs.
3. Integrate data and programs to offer customers choices
Utilities can achieve greater satisfaction and participation by integrating programs into a logical, tailored customer journey. Customers would like their utilities to show them “choices that align with their personal priorities,” an August 2018 Smart Energy Consumer Collaborative report found.
Programs should show understanding of individual customers’ needs and then follow up with personalized offerings and recommendations that help address those needs. Digital utility platforms can’t simply leverage the advent of email and the Internet – they need to build from the information they have available from aggregate customer data.
4. Leverage machine learning to offer personalized insights
Taking cues from digital e-commerce companies, utilities can adopt machine learning-backed technology and marketing practices to meet their customers’ needs.
Machine learning can help utilities dramatically enhance the story that resonates with each customer. In the past, utility analysts have tried to understand and appeal to customer motivations by manually analyzing behaviors with techniques that are inherently limited by each human analyst’s own understandings, tools and available information. Machine learning largely eliminates (or at least exponentially reduces) these limitations, taking advantage of the vast amounts of data available today in ways that analysts might find difficult to imagine.
The multitude of benefits are just starting to be tapped into for utility customer experience. Understanding aggregate customer energy data can allow utilities to make better recommendations by identifying preferences and guiding individuals along a path to maximize engagement. As individuals move through a customer journey platform that leverages machine learning, they are offered recommendations that are most relevant and meet their needs at different points in time.
5. Apply greater personalization for customers with low engagement
Personalized offerings become even more essential for winning the trust of what a January SECC report identified as “selectively engaged” customers. A group as high as 40 percent of customers fall into this category and are not organically motivated by economic or environmental factors. To reach this segment, utilities need to remove barriers to entry by demonstrating individual benefits and simplifying opportunities for participation through offerings like instant rebates.
The same principles apply to customer groups that have significant energy footprints but are historically even more challenging than the “selectively engaged” to reach, such as small business customers.
6. Consider going beyond digital through face-to-face interaction
Even in the digital era, some customers will still prefer face-to-face interaction, and utilities should keep it as a tool in the engagement toolbox to reach certain sectors. Recognized in a national review by the American Council for an Energy-Efficient Economy, Michigan utility Consumers Energy found success engaging niche customer groups, including small business customers and agricultural customers, by offering in-person energy audits and walkthroughs with utility-provided consultants as part of its larger energy efficiency programs.
Managers of the Consumers programs identified the in-person consultations as a successful strategy to overcome the lack of trust and historic communication challenges that lead to lower engagement. Combined with consultation-supported rebate opportunities, professionally installed efficiency upgrades and ongoing vendor interactions, the programs saw a 200 percent increase in small business enrollees over two years and 969 energy efficiency projects completed for agricultural customers.
7. Look to success stories for lessons and takeaways
Just as there is no singular profile of a utility customer, there is no singular ideal customer engagement strategy. The best engagement strategies are flexible to accommodate diverse customer preferences and incorporate many different technologies, programs and methods of outreach to compel participation.
Ultimately, utilities need to meaningfully engage with all customer segments to increase participation and achieve savings. Personalized engagement that combines data and customized programming offers utilities opportunities to incorporate historically elusive customers into a strategy for achieving a truly optimized grid.
Steve Malloy is the Chief Innovation Officer for Franklin Energy. With over 20 years of experience in technology services, Steve has done everything from develop software solutions to implement solutions with Fortune 500 clients and serves on boards for several renewable efficiency venture companies. Contact him at: firstname.lastname@example.org